Why Trump Could Use More Economists

Better, Mick Mulvaney said, for opponents of legislation to supply their studies and advocates to supply their own. “And if it works, they would get re-elected and if it doesn’t, they don’t.”

 Mr. Mulvaney’s critique would be more convincing if the administration had in fact put forth its own estimates of the economic effects of its proposals. It hasn’t. Its failure to account for the trade-offs of tax cuts (bigger deficits) or reduced subsidies for health care (more uninsured) are one reason Mr. Trump’s agenda is moving so slowly.
.. Forecasts will be wrong more often than right. But they provide a benchmark against which to test proposals based on theory and evidence rather than instinct or unproven ideological priors.
..That discipline has been lacking in Mr. Trump’s administration. When Mr. Trump announced last week he was pulling out of the Paris climate accord, he cited not internal research on the economic harms of the deal, but a private study commissioned by two groups critical of greenhouse gas regulation. His budget two weeks ago was noteworthy for both forecasting 3% growth, much faster than what independent analysts think plausible, and the absence of any detailed analysis of how it will be achieved. Administration officials then contradicted each other on whether tax cuts would be financed with other tax increases.
.. This may reflect the absence of economists in its hallways, a result of Mr. Trump’s apparent early disdain for experts in general.
.. “I sleep better knowing James Mattis is defense secretary and I will sleep better if Kevin Hassett is confirmed as CEA chair.”

Economists Have Been Demoted in Washington. That’s a Bad Idea.

Academic economists have received a demotion. The Trump administration has been filling out its cabinet and, unlike in the Obama administration, the chairman of the Council of Economic Advisers will not be part of it.

.. Instead, they arise from a belief that this move will rob the policy-making process of a particular kind of expertise and, worse, contribute to insularity and bias.

.. But don’t confuse business acumen with economic analytics. You surely wouldn’t conflate the two in one direction: Would you ask an academic economist without business experience to run a company?

.. What would the reduced job opportunities do to people who have made the military their profession? What would happen to the economies of the towns that surround Army bases? What would the fiscal consequences be, such as the cost of early retirement or severance packages that might need to be paid as part of a downsizing?

.. Critics of Mr. Feldstein complained. Lawrence A. Kudlow, who had been chief economist of Office of Management and Budget earlier in the Reagan administration, said of Mr. Feldstein: “There’s always been the suspicion that he’s playing to Harvard, the Charles River crowd, that he’s more interested in protecting his academic integrity than the president’s programs.”

Yes, academics fret about what their peers think, just as other people do. In this case, it’s a good thing. It is important to have someone in the cabinet who is more interested in protecting academic integrity than in protecting business interests or the president’s image.

Trump’s Economic Cabinet Is Mostly Bare. This Man Fills the Void.

During that sit-down, on Nov. 29, Mr. Cohn briefed Mr. Trump on what he regarded as the chief hurdle to expanding the economy, according to people who were briefed on the discussion: a stronger dollar, which would undermine efforts to create jobs.

 .. They have also generated outrage in some quarters. “The way I see this, there was a devastating financial crisis just over eight years ago,” Senator Elizabeth Warren, Democrat of Massachusetts, said. “Goldman Sachs was at the heart of that crisis. The idea that the president is now going to turn over the country’s economic policy to a senior Goldman executive turns my stomach.”

.. Along with Mr. Kushner and his wife, Ivanka Trump, Mr. Cohn recently helped persuade the president not to pursue an executive order that would have rolled back rights for gay, lesbian, bisexual and transgender people.

.. Still, Mr. Cohn’s 26-year career at Goldman, where he performed an array of jobs, including trading commodities, running mortgages and eventually overseeing day-to-day operations, ended with a remarkable windfall: cash and stock valued at $285 million.