Posted on 05/13/2003 11:38:16 AM PDT by Pubbie
Exile on G Street: Economists Play Peripheral Role for Bush
WASHINGTON -- Someone needs to stand up for the eggheads -- those academic economists who've descended from their ivory towers to serve for a few years on the White House Council of Economic Advisers.
As Dana Milbank of the Washington Post reported last week, the eggheads have been banished to Bratislava. Well, OK, not Bratislava, but 1800 G St., which is almost as bad. Power in the executive branch diminishes geometrically as you move away from the Oval Office. That is why smart staffers would rather have a cupboard in the West Wing than a coffered-ceilinged suite in the Eisenhower Executive Office Building. And it is why they would rather slit their wrists than leave the Eisenhower building for 1800 G St., which is what the CEA has been asked to do.
White House spokeswoman Claire Buchan insists the CEA's move isn't meant to "dis" the eggheads -- it's simply an accident of time and place. The council once occupied a beautiful suite of offices along 17th Street, next door to the White House. After Sept. 11, 2001, those street-side offices were abandoned for security reasons, forcing it to take up temporary residence in the basement.
But this is about more than office space. The Bush administration, starting at the top, is anti-intellectual. The folks at the CEA are the kids who stayed in the dorm room studying differential equations while George W. Bush was playing bladder ball and Karl Rove was striving for global domination of the College Republicans. President Bush prefers to get his advice on the economy from people who've been successful in the business world. Come to think of it, he seems to prefer even people who have been unsuccessful in the business world. The eggheads, for the most part, never met a payroll.
But relying on capitalists to keep a capitalist system humming is a mistake. Businessmen, by and large, don't like free and open markets. From John D. Rockefeller on, they have found markets to be messy, chaotic and insufficiently profitable. Whether it's oil companies seeking special tax preferences, steel companies seeking trade protection or pharmaceuticals companies seeking excessive patent protection, businessmen -- particularly when working hand in glove with government -- are among the greatest enemies of a free-market economy.
In a new book, "Saving Capitalism from the Capitalists," two eggheads from the University of Chicago -- Raghuram G. Rajan and Luigi Zingales -- puncture the notion that free markets operate best when government is absent. Touring developing nations around the globe, they argue persuasively that free markets "cannot flourish without the very visible hand of government." The real challenge is to ensure that the government acts to protect the marketplace, rather than protecting those who wish to dominate the marketplace (the greater risk in Republican administrations) or those who lost out in the marketplace (the greater risk in Democratic administrations).
That's where the Council of Economic Advisers comes in -- or should come in. These are folks who have spent their lives studying markets. Sure, they are often excruciatingly naive about the ways of Washington, but so are many of the businessmen who serve in government. Furthermore, no one is suggesting letting the eggheads run things. If they do their job right, they can be -- and should be -- a critical part of any administration devoted to free markets.
Republican-leaning economists are quick to point out that the Clinton administration was as dismissive of the council as the Bush administration is. That's partly because to better coordinate economic policy, President Clinton created the National Economic Council, which became a rival to the CEA and its influence. It's also because Mr. Clinton allowed academic economists to occupy higher positions in his government. Harvard University economist Lawrence Summers, who was blocked by Al Gore from becoming chairman of the council because of his not-so-green views on the environment, got a job at the Treasury Department as a consolation prize. He went on to become Treasury secretary. And he and other Clinton eggheads, including those at the CEA, saved that administration from many of its own worst impulses -- fighting against excessive environmental regulation, for instance, and for fiscal restraint.
With the departure of Lawrence Lindsey, there are no such high-ranking economists in the Bush administration. But there is plenty of need. The government is preparing to tackle the devilishly complex issue of creating a functioning market for health care to control costs. If it allows drug companies and insurance companies and hospitals to guide its policies, it surely will fail. Those companies are all in search of more power in the marketplace -- not a marketplace that forces them to charge lower prices...
(Excerpt) Read more at online.wsj.com ...
Also sending John Harwood and Alan Hunt out into the unemployment office, would help the journal out too...
Kind of says it all.
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