The White House announced late this afternoon that Presidential economic advisor, Austan Goolsbee, would leave his White House position to resume his tenured faculty position at the University of Chicago. From the New York Times Caucus:
Austan Goolsbee, a longtime adviser to President Obama and the only economist left on his core economic team, plans to leave as chairman of the Council of Economic Advisers by September after a year in the job to return to the University of Chicago.
With the recovery flagging, the White House is eager to name a successor to Mr. Goolsbee this summer and is considering several academic economists, an administration official said on Monday. The job requires Senate confirmation.
This shouldn’t surprise anyone. The reason may be as simple as the need to retain a tenured position at one of the most
discredited respected economics departments in the country. And like all academics, Goolsbee joined with the understanding he would return to Chicago. But a quick look at recent headlines offers other reasons.
In recent weeks, after a near stagnant first quarter, we’ve seen one forecaster after another lower their forecasts of economic growth from about 4 percent this year to under 3 and perhaps as low as 2.5 percent. This quarter is expected to grow at an annual 2.8 percent rate or less. Last week, we got confirmation of the slowdown via disappointing jobs numbers, with the unemployment rising to 9.1 percent. While that followed more hopeful March and April numbers, the trend level is clearly unlikely to make a significant dent in the overall unemployment rates before 2013. In fact, at that rate, it would take about ten years to get back to normal.
And yet, there are no signs the President or the White House see these numbers as a reason to refocus on economic growth and jobs creation. Instead, they remain publicly fixated on cutting intermediate to long-run deficits and striking a foolish and economically damaging deal with faux deficit hysterics as ransom to allow an unavoidable rise in the debt ceiling. It’s hard to imagine a process so disconnected from the economy’s needs. [cont’d.]
With reputable economists starting to use the word “panic” and “depression” to describe where they see the economy heading, it was left on Sunday to Austan Goolsbee to tell the country that the White House was stuck on stupid, unwilling to change course or even concede that the recovery was in serious danger. Meanwhile, the nation’s unemployment is back above 9 percent, extended unemployment insurance is running out, and states are continuing to slash their budgets and payrolls, offsetting what little stimulus might have come from last December’s tax cut deal. We’re going the wrong way.
Ignoring the crisis in unemployment, the central debate in Washington and many states remains over how drastic austerity measures ought to be, when every sensible person knows this austerity can only make matters worse. The record of austerity in Europe follows economic theory: it’s hurting growth, throwing millions out of work, and the citizens are in the streets demanding a change in their governments. What more evidence do we need?
Faced with this insanity, even a Chicago economist should have the good sense to get out before the worst is (rightly) blamed on him. And following his, uh, strange performance on Sunday’s shows, he got a clear signal from those who might be inclined to be more charitable about motives and predicaments. When a former Democratic Administration economist like Brad DeLong linked favorably to Mark Thoma questioning how the Administration could continue to have it’s head in the sand and not see the need to pivot towards job creation, Goolsbee may just have seen it as a sign it’s time to announce his departure.
The White House announcement tells us that the next poor sap to take that job will face exactly the same dilemma Goolsbee did. It ought to be a great job, it looks terrific on one’s resume, but why would anyone want to take the position of economic adviser when the man in the Oval Office and his political advisers have no intention of following any sound economic advice?
Why become the front for a team that remains committed to failed policies that may very likely take the economy down with them? And when a Nobel laureate has to tell the White House via the New York Times that he’s withdrawing his nomination to the Federal Reserve because Washington, including the White House, has become dysfunctional, it’s pretty clear the communication between the President and the economic team is not what it should be.
So it’s easy to see why Goolsbee might believe there was no point in staying.