Obama Consults a “Wide Variety of Economists” – Just Not Those Who Got it Right

By William K. Black

In a PR effort that aptly illustrates his approach to governance, President Obama has revealed that he is meeting with a “wide variety of economists” to try to figure out what economic policies he should follow.  “Obama Seeks Advice From Wide Variety of Economists.”

Obama is already well into the lame duck phase of his presidency, so this is simply a PR exercise.  The message Obama wants to send is the same one he has sounded throughout his presidency.  He is open to economic views from the parts of the political spectrum that range from the hard right to the mild left.

Obama is not open to hearing the economic views of anyone who got the crisis correct or anyone his advisors consider to the left of Paul Krugman (who is mildly left in economic terms).  James Galbraith captured the first point brilliantly in an essay about a Krugman column.  Krugman was making the correct point that conservative economists had gotten the crisis wrong and, in passing, mentioned less than a handful of economists he considered to have gotten it right.  Galbraith stressed Krugman’s lack of interest in what economists got the crisis right and Krugman’s failure to list the economists who had actually gotten it right and had theoretical explanations for the causes of the crisis that had proved accurate in multiple crises.

Obama infamously ignored Krugman’s advice at a meeting early in his term.  Indeed, Obama eventually ignored his own team of economists and increasingly relied on Treasury Secretary Timothy Geithner (who lacks any expertise in economics) for his economic advice.  Geithner’s pro-austerity views, his devotion to the interests of the largest banks engaging in the most devastating frauds, and his indifference to the citizens of the U.S. led to Obama taking a series of acts that increasingly embraced moderate austerity and greatly weakened the recovery.  Obama is culpable for increasingly ignoring his economic team and agreeing with Geithner’s bad advice.

Obama’s current set of luncheon meetings with economists includes economists that range from the hard right to Krugman on the “responsible” left.  The article portrays this as “tapping a broad array of ideological views.”  It fails to “tap,” however, anyone who actually got the crisis correct and anyone remotely as far left as the economists Obama chose to speak with on the hard right.  Economists such as James Galbraith were once on the fringes of Obama’s economic team (pre-inauguration).  Galbraith is a bit to the left of Krugman, but he is nowhere near as far from the center as are several of the hard right economists Obama chose to talk with about economic policy.  The same is true of Dean Baker, Randy Wray, and Stephanie Kelton.  Our friends at U. Mass. – Amherst are about as far to the left as folks like Kevin Hassett are to the right.  The real difference, the thing sure to exclude Galbraith, Baker, Wray, and Kelton from Obama’s luncheon list, is that they have committed the unforgivable sin of having been proved correct (again) about big finance and the crisis.  There is, of course, no chance that Obama will ever invite any of us, much less our friends at Amherst, to lunch to discuss economic policy.

The good news for Americans, which I will explain in my next column, is that Obama is not remotely as bad as the European troika’s leaders and economists that set the EU’s catastrophic economic policies.

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