(photo by Annie Leibovitz for Vanity Fair)
The Washington Post invited me (and other economists) last week to “grade” the departing members of President Obama’s economic team. I tried to be dispassionate about it and anyway didn’t have the space to rag about the Bush/Obama tax cuts for the umpteenth time–which are more a forward-looking issue anyway (and we can’t change the past, after all). Here’s my about-200-words perspective on how the “team” did over the first two years, and why the next two will be different:
DIANE LIM ROGERS
Chief economist at the Concord Coalition and blogger at EconomistMom.com
President Obama’s inaugural economic team did about the best it could, given the terrible economic circumstances it inherited and the challenges it faced in Congress. Its individual members would have preferred policies more effective in dampening the recession and in improving the long-term budget outlook. The stimulus might have been structured to provide greater short-term “bang per buck” with elements better reflecting Larry Summers’s own “three Ts” — timely, targeted, and temporary. And the health-care reform could have been heavier on long-term cost-saving measures to “bend the health cost curve” more to Peter Orszag’s liking. But given the political constraints, the policies enacted were decent successes.
The departing members of the economic team were chosen for their pure intelligence and their well-tested policy instincts — exactly what was needed to perform triage on a failing economy. Over the next two years, however, there will be more time to develop a fiscal policy strategy that will best transition our economy from a “stimulate demand” mode (throw the money out there fast) to an “increase supply” (start living within our means) mode. Because this will necessitate many difficult policy choices that can only be achieved by working with Congress in a bipartisan manner, it is crucial that the new members of the Obama economic team have unusual people skills — not just book smarts.
Some may interpret my reference to the need for more “people skills” on the economic team as my call for more women on the team, but I’m not necessarily saying that (although it is a shame we are “down one” in losing Christina Romer). I just mean people who have very good communication and diplomacy skills, whether they be women or men. The hardest part about fiscal policy right now and going forward is getting everyone to talk about the tough choices and tradeoffs, and their own preferences on them, in an straightforward, open, honest and respectful (with ears as well as mouths open) way.
Maybe we need some “economist therapists” on the new team.