Obama's economic advisers are brainy academics

Part of a continuing series on economic issues in campaign 2008

McClatchy NewspapersApril 4, 2008 

Sen. Barack Obama speaks April 1 at Wilkes University in Wilkes-Barre, Pa.

SARAH J. GLOVER / PHILADELPHIA INQUIRER / MCT

WASHINGTON — Barack Obama is surrounded by bright but untested academic economists who are on the cutting edge of research on health care policy, social insurance, technology and taxes.

A lawyer and former community organizer, Obama has no economic expertise himself.

His chief economic adviser, Austan Goolsbee, is a professor at the University of Chicago Graduate School of Business. He's young, quirky and a rising star in academia. He's written extensively, both as an academic researcher and as the author of a monthly "Economic Scene" column for The New York Times and a "Dismal Science" column for Slate.com.

Goolsbee's media columns touch on a range of topics, including China's weak banking system and high fees charged by administrators of some state savings plans for college, called 529s. He even penned an economic defense in March 2007 of the sub-prime loans that have helped trigger the nationwide housing crisis.

Goolsbee's a member of the prestigious National Bureau of Economic Research, but while the University of Chicago is identified with free-market economics, he doesn't have an identifiable ideological bent.

"I would describe him as nonideological. Whether this is good or bad for political reasons, I don't know, but he is somebody you could easily imagine being a Democrat or a Republican — whatever he is, he is near the center," said Peter Klenow, a Stanford University economist who's published two research papers on technology with Goolsbee.

"I've known Austan since he was graduate student at MIT. He's a smart guy, a sensible guy, and I think it is a good thing that Obama has a chance to hear from Austan," said Martin Feldstein, who served Ronald Reagan and now advises the presumptive Republican presidential nominee, John McCain. Feldstein also teaches at Harvard University and heads the National Bureau of Economic Research.

Several of Feldstein's Harvard colleagues also counsel Obama. They include health economist David Cutler, who was on President Clinton's Council of Economic Advisers.

Another is Jeffrey Leibman, a professor at Harvard's Kennedy School of Government and an expert on social welfare programs and Social Security. He's studied how tax policies favor the very poor and very rich at the expense of the middle class.

Klenow taught with Goolsbee at the University of Chicago and described him as "a bread-and-butter applied micro-economist who is very creative and a very good communicator."

Microeconomics is the study of how and why businesses and consumers make economic decisions in specific markets, for example automobiles. One measure of his passion for communicating economics is clear on Goolsbee's Web site: He posted a picture of himself in a tuxedo delivering an economics lecture hours before his wedding in 1997.

One innovative proposal from Goolsbee comes in a 2006 research paper done for The Brookings Institution, a center-left Washington research center. He concluded that the IRS could save some 40 percent of taxpayers — those who have no tax deductions or freelance income — about $2 billion that they'd spend on tax help, as well as countless man-hours. The IRS could send them tax returns already filled out based on the W-2 forms sent in by their employers, and they could verify them and send them back without doing anything more.

Goolsbee, who earned a Ph.D from the Massachusetts Institute of Technology in 1995, didn't respond to requests for comment.

He's been out of public view since a campaign controversy in which a Canadian government memo leaked to the press days before the March 4 Ohio primary. The document said that Goolsbee had given a Canadian diplomat the impression that Obama's campaign threats to renegotiate the North American Free Trade Agreement were political posturing, and not to be taken seriously.

The incident was an indictment of Goolsbee's political skills, but few question his economic acumen.

If Obama were to win the presidency, he'd also be likely to fill economic posts with Clinton's more experienced advisers from her husband's administration, since the two Democratic hopefuls support similar economic policies. They agree on the need for universal health care coverage, and both want to roll back parts of President Bush's tax cuts in 2001 and 2003 to force the rich to pay more.

"Many of them will be the same people. If they're asked — but they are now advising Clinton — you better believe they'd be there," said Chris Varvares, the president of Macroeconomic Advisers of St. Louis, Mo., one of the nation's top economic forecasters.

ON THE WEB

Goolsbee's Simple Tax Return.

Goolsbee defends now unpopular sub-prime mortgages.

Goolsbee on China's weak banks.

Goolsbee on ethnicity and Iraq's bleak economic outlook.

Goolsbee on behavioral effects of high gas prices.

McClatchy Newspapers 2008

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