New hires involving mere mortals handling the nation’s money problems emerged today; the one you didn’t hear of was Kathleen Weiss Hanley, who was named to the deputy post over at the SEC’s moderately shiny RiskFin division. It is both less important and shiny than that other announcement, wherein President Obama named Alan Krueger as his pick to chair the White House Council of Economic Advisors. Who is he, and what will he do?
The (far-less-excitingly-named-than-RiskFin) CEA are a group of three sentient human beings whose job it is to advise the President on economic matters. They don’t execute policy so much as suggest things for it, but these things can often have dramatic effects on how Presidents handle our money (modest claim to pop culture fame: the notorious “guns or butter“ argument and West Wing episode title emerged from it a long time ago).
Why Alan Krueger? Well, as the New York Times’ Catherine Rampell noted, former assistant Treasury Secretary Krueger is a microeconomist, which differentiates him from the usual pick of macroeconomists to the position. They think it sends a strong signal about the administration’s intentions regarding job creation. Also, seeing as how he’s “data-driven and relatively nonideological” and already been through the gauntlet that is a Senate confirmation, they probably won’t have too many issues confirming him to the post. Probably. Maybe.
As the Wall Street Journal noted, former Reagan CEA chair Martin Feldstein gave Mr. Krueger his endorsement, and one of the choice ways lately to bash President Obama is to align our current economic situation with that of the one President Reagan walked into when taking office, which most people know is silly but is an argument trotted out often anyway. Maybe this will get them to shut up, though that’s not likely. He’s also a Springsteen fan, for what that’s worth.
It’s a gig with a lot of turnover: In the short time that President Obama has been in office, they’ve been through two CEA chairs, Edward Lazear and Christina Romer, but to be fair, since 1999, including Mr. Krueger, there have been eight chairs, one of whom barely lasted a year (Harvey S. Rosen, ’05). Sometimes they just freak out and return to teaching, like the last two did. Sometimes they end up in positions to do things with those thoughts later on in their careers, for better or worse. Mostly worse.
For example: Other previous WHCEA chairs include current Federal Reserve chair Ben S. Bernanke (’05-’06), past Fed chair Alan Greenspan (’74-’77) and maybe our personal favorite, Michael Boskin (’89-’93), whose modestly-named Boskin Commission substantially changed the face of inflation as the world knows it in 1995, allowing America to underreport just how inflated the dollar is, which—long story short—we still feel the mostly negative effects of to this day, like the price of your steak lying to you and a bunch of hedge funds buying up farmland.
If confirmed, history will ideally be kinder to Mr. Krueger’s legacy, though whether or not he makes it through again may depend on how everyone spins that whole Cash for Clunkers deal, which was his idea when he was Deputy Treasury Secretary not two years ago. Outlook on this? If memory serves anyone correctly, not great! This will be greatly assisted if he does not come up with some new alliterative way to endorse giving people jobs; Pennies for Positions just doesn’t seem like it will—pun unintended—get the job done this time.
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