Great Recession

Goolsbee Late Hit: Great Liberaltarian Hope Did Big Nothing

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Hot and not.

Kremlinology is a waste of time whether you're trying to read the White House, the Syrian president's palace or in fact the Kremlin

So I don't blame L.A. Times D.C. correspondent Peter Nicholas for the credulity he shows in this farewell to Austan Goolsbee, the Obama Administration economic advisor who announced his resignation Monday. Separated by only a paragraph are two sharply contrasting claims: that Goolsbee is leaving because he didn't want to lose his position at the University of Chicago by overstaying his leave; and that Goolsbee took the job of chairman of the Council of Economic Advisors just nine months ago, when he replaced the morally bankrupt Christina A. Romer. Was the president's top economic advisor incapable of planning any of this stuff ahead? 

Nicholas chooses not to reconcile the tension here. One Michael Hirsh is more ambitious in this National Journal piece on Goolsbee's resignation. We learn from Hirsh that Goolsbee had initially been "marginalized by Larry Summers" and now is cut down just as he's coming into his own as the administration's "chief economic voice." In Hirsh's telling the administration killed the finest hopes of this popular intellectual:  

But therein lay a deeper problem: the chief voice of what? Of policies that, frankly, no economist worth his Ph.D. would want to tout, occurring in an intellectual vacuum in which good economic thinking was no longer welcome.

Brrrr! But that's just Hirsh opening the fridge. Dig this gust of Arctic wind: 

The inmates have taken over the asylum, in other words, and Mr. Goolsbee is simply ducking out the back door for his own safety. The numbers on jobs, housing, and manufacturing are scary, as are the "headwinds" from abroad, particularly Europe and Japan. But there simply is no room left for a real economic discussion about remedies. The Treasury and Fed both have had their day. The economy, limping along with 9.1 percent unemployment, will have to fend for itself.

But here's the interesting part: Hirsh says Goolsbee was not the voice of less irrational spending policies, market-clearance, exit strategies, or any other free-market-aware solutions. If you were one of the many libertarians who believed that version of events, Hirsh (and it's not clear whether he's citing factoids or engaging in the same kind of identification/projection cosmotarians went through a few years ago) stands athwart history shouting Spend

Goolsbee's precise role in those early debates was not clear. What is known is that Goolsbee, an empiricist, had usually aligned himself with more progressive voices despite his tenure at the University of Chicago. He is believed to have sided with Volcker on the tougher regulation of Wall Street and economist Joseph Stiglitz and others on the need for much more stimulus. But "I didn't have much influence and neither did Austan," Volcker told National Journal on Tuesday.

Today, all those hopes are gone with the wind of the tea-party movement. The GOP is in charge of the House and the tea partiers, despite being a minority faction of a minority party, are effectively dictating Washington's economic agenda, which is focused only on cutting spending despite the wavering recovery.

Ah, that damn spending-cut agenda again! It's why they have to keep raising the debt ceiling. 

It's no secret that I welcome any and all firings of the Obama economic team. But the big fish is still out there:

They're coming to get you, Timmeh!