Political rhetoric tends to be overwhelmingly simple while economic analysis is often needlessly complex.
This is not news. But it does make for a big disconnect between what politicians say and what they hope to do — because if they publicly said what their economic advisers told them, voters would either riot or fall asleep.
That said, after spending some time at the Republican National Convention this week, and hearing John McCain‘s multi-faceted energy proposal (the Lexington Project) reduced on the convention floor to the simple chant “Drill, Baby, Drill!”, I came to wonder if indeed McCain hates economists.
Consider what he said about economists at a New York town hall meeting in June during the frenzied days of the “gas-tax holiday” debate:
They’re the same ones, I guess, that didn’t tell us about the housing subprime lending crisis. They’re the ones that didn’t tell us about the dot-com meltdown. And they’re the ones that didn’t warn us about inflation that’s coming up. I have to fall back on the old adage that if you took all the economists in the world and put them end to end, they still wouldn’t reach a conclusion. So I trust the people, not the so-called economists. … to give the American people a little relief.
Q: John McCain doesn’t really hate economists, does he? As his economic adviser, how did you feel about his “so-called economists” comment?
A: No, he doesn’t hate economists and I laughed when he said it. And I agree: you should not simply “listen to economists.” My well-meaning colleagues (and me) can be out of touch with conditions on the ground (if too reliant on data). And by focusing too much on differences, we as a profession often do not convey clearly the things about which we disagree.
Q: In our earlier blog quorum, you wrote that an economic adviser’s hardest job is fighting bad economic ideas. Can you give an example or two of bad ideas that you’ve helped quash?
A: Require that all oil extracted in the U.S. be sold in the U.S. — silly because it is a world market, etc.
Q: With energy such a prominent issue in this campaign, how are you helping your candidate communicate an effective political message about such a complex subject?
A: Break it into pieces. Problems: national security, economic security, environmental security. Solutions: change the way we drive (hybrids, electrics, biofuels); use the abundant resources (coal, nuclear); and break the political deadlock (moratorium, nuke storage, cap-trade).
Q: Can the sort of populism Sen. McCain appealed to in the “so-called economists” quote possibly be reconciled with the economic realities of the real world?
A: Sure. You listen to the people. You also listen to the political constraints. You listen to the research. That is the reality of economic policymaking and the reason it is not a textbook activity.
At first blush, McCain would seem to be the sort of candidate well-suited to appreciate economic advice. He, like many economists, is a rationalist — blunt, and not always politically correct. On the other hand, he publicly professed that “the issue of economics is not something I’ve understood as well as I should.”
In the new book The Leaders We Deserved (and a Few We Didn’t), Alvin Felzenberg attempts an unideological ranking of U.S. presidents, using more specific criteria than are usually used by people who rank presidents.
In judging the presidents’ economic successes, he breaks the issue down into a few categories: overall economic performance during their tenures; improving the country’s economic infrastructure; and expanding economic opportunities for all Americans.
According to Felzenberg, there have been four excellent economic presidents in U.S. history: George Washington, Abraham Lincoln, Theodore Roosevelt, and Ronald Reagan. Seven more did quite well: James K. Polk, William McKinley, Woodrow Wilson, Calvin Coolidge, Dwight D. Eisenhower, John F. Kennedy, and Bill Clinton. The worst economic presidents according to Felzenberg’s methodology were James Madison, James Monroe, Andrew Jackson, Herbert Hoover, Richard Nixon, Martin Van Buren, and Jimmy Carter.
So what is it that makes a president a good economic president? Here’s what Felzenberg says:
Most economically successful presidents were genuinely interested in business and economics. They availed themselves of multiples sources of information both inside and outside their administrations and selected good advisers and competent department heads … Nor did they resort to short-term gimmicks … While often reacting to short-term challenges, these presidents developed coherent policies designed to boost long-term economic performance. … None of [the failed] presidents, save for Carter and Hoover, showed much interest in business or economics.
Assuming that Felzenberg’s theory is mostly right, and given what we know so far of McCain’s appetite for economics, what sort of economic president do you think McCain would be?
[Note: you can hear a discussion related to this topic of The Takeaway.]