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.
Why Most Economists Are So Worried About Trump
at the annual conference of economists last weekend in Chicago, the major theme was a sense of anxiety about the incoming Trump administration. This foreboding was evident in roughly equal measure among conservative and liberal economists. But it is in direct contrast with the feelings of small-business owners and Wall Street traders.
.. And partly this reflects Mr. Trump’s appointments. Few of his key economic advisers have any economics training, and the only official who identifies as an economist — Peter Navarro, who earned a Harvard Ph.D. in economics and will head up the newly formed National Trade Council — stands so far outside the mainstream that he endorses few of the key tenets of the profession.
.. Over three days of intense discussions, I didn’t encounter a single economist who expressed optimism that Mr. Trump’s administration would be good for the economy. The optimists were those who thought Mr. Trump would not have the energy to actually implement his agenda; the pessimists’ thoughts veered toward disaster.
.. It also puts economists at odds with the judgments of small-business owners.
.. One possibility is that Mr. Trump remains something of an unknown, and each group is filling in the blanks differently. Small businesses, pleased to see a businessman in the White House, might be tempted to believe the best.
.. Mr. Trump’s anti-regulatory zeal may help businesses but hurt workers; his anti-trade agenda could help sellers but hurt buyers; and his instincts to protect existing jobs may advantage existing businesses at the expense of the next generation of entrepreneurs.
.. Or perhaps the optimism of small-business owners is about what they think is most likely to happen, particularly in the short run. My conversations with economists revealed them to be more focused on the long run, particularly on the risk of really bad outcomes. By this view, the short-term optimism may be well placed, but should be juxtaposed with the possibility of a trade war, a catastrophic economic decision like defaulting on the national debt or a foreign policy disaster.
.. Mr. Trump’s populist pose assigns less value to economic expertise, while also creating the conditions under which it’s most likely to be needed.
Michael Novak Crafted a Moral Defense of Democratic Capitalism
Philosopher served as ambassador under Reagan and impressed Thatcher
His philosophical heroes included Reinhold Niebuhr, Gabriel Marcel and Albert Camus... Recruited to teach at Stanford University in the mid-1960s, he joined protests against the Vietnam War, though he wavered over the years on whether U.S. involvement was justified. “I came out of it feeling that I had not been as steady in my thinking as I would have liked,” he wrote... So he took up a chance to write speeches for Sargent Shriver as the politician stumped for Democrats across the U.S. in 1970... Yet he believed the party was neglecting a large part of its base, including Irish, Italian and Slavic Catholic immigrants.Such voters, he wrote, “did not want their kids taking acid. They did not want their daughters sleeping around, or having abortions.”.. His 1972 book “The Rise of the Unmeltable Ethnics” described people who would become Reagan Democrats, as Mr. Novak himself became.
.. socialism was “the residue of Judeo-Christian faith, without religion. It is a belief in the goodness of the human race and paradise on earth.” Capitalism, he added, was “a system built on belief in human selfishness; given checks and balances, it is nearly always a smashing, scandalous success.”
.. In his book “The Joy of Sports,” he dismissed the idea that sports were a waste of an intellectual’s time. “The basic reality of all human life is play, games, sport; these are the realities from which the basic metaphors for all that is important in the rest of life are drawn,” he wrote.
Kenneth Arrow Won Nobel in Economics and Dazzled Colleagues
Stanford economist examined group decision-making and medical-care market
When he started a question with the phrase “I don’t understand,” he was being polite, said John Shoven, a Stanford economist: “He usually could have started the question with ‘You don’t understand.’”.. He presented mathematical proof “that when there are numerous options and a diversity of opinions no voting system can be completely fair,”.. he examined the problem of “asymmetric information” in the market for medical services and insurance... Dr. Arrow’s family tree was decked with eminent economists. His nephew Lawrence Summers is a former Treasury Secretary and president of Harvard. A relative by marriage, Paul A. Samuelson, also won a Nobel in economics, while his sister Anita and her husband, Robert Summers, were economists and both taught at the University of Pennsylvania.