Steve Clemons professes himself surprised at Barack Obama's appointment of Jason Furman as economic policy director. As I wrote yesterday, I think this is a good move for Obama. Jason has the political skills and policy contacts to run an effective economic shop. But if the question is why Obama didn't hire a more progressive economist like Dean Baker or Jared Bernstein or Joseph Stiglitz, the answer seems pretty simple: Despite some primary pandering in Ohio, Obama isn't that progressive on economic issues. It's not, after all, an accident that Goolsbee and Furman came out of the same center-left school of thought (a school of thought also associated with Clinton's team). Obama spent a fair number of his formative intellectual years at the University of Chicago, the humming epicenter of America's market-driven consensus, and he clearly imbibed a bit of the outlook. His hires reflect his beliefs. That said, these disputes mean a bit less than they once did. There aren't many huge trade deals on the horizon. The question is how to compensate the losers of trade, not whether trade can be rolled back. Meanwhile, relations between leftie and sorta-leftie economists are rather collegial lately, as most of them agree on the problems facing the country.* The big economic issues for the next administration are probably tax rates, deficit reduction, health care, inequality, and the credit/housing/financial crisis. Left-of-center economists almost universally agree that taxes should be higher, health care should be universal (means differ here, of course), and inequality is a problem. There's a lot of dispute as to the proper response on the financial crisis. Insofar as there is what to worry about with Obama's team, it's where they come down on deficit reduction versus social investment. Edwards was extremely clear that health care is the priority, and though no one wanted to worsen the deficit, fixing it would not take precedence over guaranteeing medical coverage to all Americans. The big question is where Obama and his team fall on that question -- the same question that split Clinton's economic team in 1992. But insofar as folks are wondering why Obama keeps hiring these center-left types to formulate his economic program, it's because he agrees with them. *I'd really like to link to Jon Chait's great article Freakoutonomics that tracks the Cliniton economic teams increasing drift towards the left, but because The New Republic's redesign flushed their archives down the toilet, I can't. You can find some excerpts over at Mark Thoma's place, however, and William Greider has written on the same topic.
