Barack Obama v. His Economic Advisers
It bears remembering that prior to hitching their stars to the Obama wagon, the economic advisers the President-elect chose took direct issue with many of the items in the expected stimulus package the incoming Administration is going to try to pass through Congress:
For example, giving more federal aid to states, one of Obama’s proposals, falls in the “medium” range of cost-effectiveness and carries much uncertainty about its impact on the economy, Peter R. Orszag told Congress a year ago. He headed the nonpartisan Congressional Budget Office then, and now is Obama’s pick to direct the Office of Budget and Management.
Other Obama proposals such as giving businesses more leeway to write off losses from 2008 and 2009 “have little effect by themselves,” Orszag testified at the time. “The historical record on the effectiveness of efforts to provide discretionary fiscal stimulus is mixed,” he concluded.
Christina Romer, who will head Obama’s Council of Economic Advisers, held a similar view in 1994, when she co-wrote an essay, “What Ends Recessions?”
“Our estimates suggest that fiscal actions,” which are what Obama is proposing, “have contributed only moderately to recoveries,” she and her husband, David, wrote. “Economists seem strangely unsure about what to tell policy makers to do to end recessions.”
There is a whole lot more in the story concerning differences between Obama and his advisers. Peter Orszag, the OMB Director-designate, has left a massive paper trail in which he disagrees with the ideas that have ended up in Obama’s stimulus proposal.
Maybe it would be a good idea to bring up all of these differences when Orszag comes up for his confirmation hearings. For myself, I would like to see how both Orszag and Romer try to backtrack their way out of their previous positions and into singing from the same policy songsheet as the one from which the President-elect sings. It should be amusing. But even as they try to do that, Senators in confirmation hearings ought to be calling Orszag on the inconsistencies between his stances in the past and the stance he will be expected to take as a loyal member of the incoming Obama Administration.
Let’s show that the ideas in the Obama stimulus package are so controversial that they were once denounced by Obama’s own appointees. It should make for a good debate, but even more importantly, it might make for better policy in the long run.