Economic Advisors to the President

University of Chicago economists have a reputation for being outspoken, libertarian, and conservative. My good friend and Chicago colleague Austan Goolsbee, who has been advising Barack Obama on economic policy since his Senate campaign, is only the first of these.

There is an article about economists advising presidential candidates that features Goolsbee in today’s New York Times. My guess is that this story exaggerates the influence of these economists on eventual policy outcomes. I may just be a skeptic when it comes to influence, though. I believe, for instance, that the Chairman of the Federal Reserve has a much smaller impact on the economy than most lay people believe.

Prior to Goolsbee’s new fame as an advisor to presidential candidates, I would have to rank his most impressive accomplishment as winning the M.I.T. economics department fantasy baseball championship two years in a row. What makes it so impressive is that I was his co-owner, and in 15 years of playing fantasy baseball without him as a co-owner, I have never even come close to winning.


Schubie

I just want to plug Professor Goolsbee as an amazing professor. I just took his class Econ and Policy in the Telecom, Media, and Technology Industries and it's one of the 2 or 3 best classes I've ever taken at the University of Chicago. Having Goolsbee on board makes me even more of an Obama fan than I already was.

egretman

University of Chicago economists have a reputation for being outspoken, libertarian, and conservative.

There's that funny word again. libertarian Used to be relatively rare. Now it often pops up almost as a descriptive adjective modifying the word conservative. To be an economist and to say you are conservative is no longer enough.

Can anyone explain this? Is it code words for saying that they are “conservative” on economic issues and “liberal” on social issues? Or is it an extra stress on being a “laissez faire capitalist”?

Or is it simply separating themselves from religious nuts who dominate the Republican party now days?

ajkrik

"Liberal" "conservative" "libertarian" are just social constructions that make political and sociological discourse venal and meaningless.
People do not fit into simple categories like "protein" "fat" and "carbohydrates". I struggle to explain this viewpoint to my wife and parents regularly. I could list four beliefs I had on issues and people would have me fit into one of those silly categories before the fourth example left my lips. I could pick four more and be considered the opposite by someone else. When I list four and four it's fun to watch their eyes glaze over and go all "tilt" . . . "that does not compute. . ."
We'd be more accurate to label people as "I need to control you" and "leave me alone". Good luck.

DSarna

I think the Fed has greater negative potential (for screwing up the economy by excessive interference)than it has potential for helping the economy by doing benign things.

Ckuchy

I have always found that a Libertarian is one who, essentially, follows Pierre Trudeau's doctrine of 'the government has no place in the bedroom' which is a just a glib way of saying that the government should not be in the business of regulating things it has no business regulating in the first place.

egretman

Ok Ckuchy, but isn't that just the "classical liberal"? Keep the governent out of social issues?

But I doubt that Levitt meant that. He's an economist talking about other economists. He probably meant a more "laissez faire" attitude to regulation. But doesn't his next word "conservative" already cover that?

I just find it so fascinating that many people who formerly would have been happy to be labeled conservative now must qualify it with "libertarian". And maybe it's just that the recent out-of-control republican congress was so not fiscally conservative that they have given the word "conservative" a bad name.

But by taking the word "libertarian", you also accept a lot of baggage that may not be wanted. Or maybe the word is evolving to mean a return to "old" conservatism of only 10 years ago before Bush.

mathking

On the topic of the advisors, who's got a good one? Who doesn't? I will confess to not knowing much about any of them except Hubbard, Boskin and Holtz-Eakin.

BRKelley

Eeegad! Are we really now defining libertarianism according to a French-Canadian socialist weenie like Pierre Trudeau? If that's the case we've digressed further than previously imagined.

editorguy

I can't help but try to envision draft night at the MIT economics department fantasy baseball league. What kind of beer would be served? I'll guess Sam Adams.

egretman

Eeegad! Are we really now defining libertarianism according to a French-Canadian socialist weenie like Pierre Trudeau?

Exactly! Libertarian has so many meanings that we could actually believe that Dr. Levitt is saying that U of C economists are limp-wristed socialist layabouts from Montreal. Now we know why Levitt and Dubner refused to give that good anglo-saxon RandyfromCanada his free signed book that he won. Free Quebec!

That word, libertarian, what does it mean? Please lord, what does it mean? Anybody?

msp

Goolsbee ends his 2000 Chicago MBA Commencement addresss with: "never commit the sunk cost fallacy."

Is President Bush's "surge" strategy in Iraq a sunk cost fallacy?

egretman

God, this is a great blog. Sunk cost fallacy! So I go to the source that all red-blooded good Americans go to look up these things, Wikipedia. Yep, there it is "sunk cost fallacy".

But right in the middle of the explanation of the "fallacy", is the statement "The factual accuracy of this section is disputed". Well, that's ok, I think it explained it enough for people like me to understand what msp is asking.

But then reading a little further, I see that there is a notion called “sunk cost dilemma” that we must really really worry about. This one sounds really serious because you can actually fail by “making a number of good decisions that lead to one big disaster”!

So between the “fallacy” and the “dilemma”, I suppose we are all doomed.

But to answer msp's question,

YES!

mathking

The president's current surge strategy does seem to be a sunk cost mistake. It violates the military rule: "Never reinforce failure." Which itself seems to be a rule for avoiding the sunk cost fallacy.

Princess Leia

Austan is not as old I thought!

trikyguy

My friend and I are confused (disagree) about the meaning of "only the first one of these" at the end of the first paragraph. If you don't mind, please clarify.

trikyguy

Correction: "only the first of these"

samuel

How bizarre that an economist would believe that the 'Federal' Reserve wields less power than commonly believed. That could only be the perception of someone without an adjustable rate mortgage.

Schubie

I just want to plug Professor Goolsbee as an amazing professor. I just took his class Econ and Policy in the Telecom, Media, and Technology Industries and it's one of the 2 or 3 best classes I've ever taken at the University of Chicago. Having Goolsbee on board makes me even more of an Obama fan than I already was.

egretman

University of Chicago economists have a reputation for being outspoken, libertarian, and conservative.

There's that funny word again. libertarian Used to be relatively rare. Now it often pops up almost as a descriptive adjective modifying the word conservative. To be an economist and to say you are conservative is no longer enough.

Can anyone explain this? Is it code words for saying that they are "conservative" on economic issues and "liberal" on social issues? Or is it an extra stress on being a "laissez faire capitalist"?

Or is it simply separating themselves from religious nuts who dominate the Republican party now days?

ajkrik

"Liberal" "conservative" "libertarian" are just social constructions that make political and sociological discourse venal and meaningless.
People do not fit into simple categories like "protein" "fat" and "carbohydrates". I struggle to explain this viewpoint to my wife and parents regularly. I could list four beliefs I had on issues and people would have me fit into one of those silly categories before the fourth example left my lips. I could pick four more and be considered the opposite by someone else. When I list four and four it's fun to watch their eyes glaze over and go all "tilt" . . . "that does not compute. . ."
We'd be more accurate to label people as "I need to control you" and "leave me alone". Good luck.