I’ve lived in America now for 23 years, and in that time I don’t recall so many economists who are usually sympathetic to a sitting president’s ideology being so critical of that president’s policies like some prominent left-leaning economists are now being of President Biden’s policies. I may be wrong, of course.
Either way, it is striking to me how many left-of-center economists such as Jason Furman, Lawrence Summers, Marc Goldwein, and others have been going to town, in highly critical tones, on some of Biden’s policy positions or talking points. I am thinking in particular of their disapproval of the American Rescue plan‘s size because of its impact on inflation, the debunking of greedflation as the cause of inflation, their opposition to price controls as a mean of controlling inflation, and now the announcement of student-debt forgiveness.
There are different possibilities for this family infighting. One of them could be that the Biden administration doesn’t care as much about what “traditional” economists think, and that is reflected in his policies and these economists’ criticisms. If that is the case, he isn’t alone. Baron did a survey of who were the super influencers on the issue of antitrust these days, and it wasn’t the economists.
Matt Yglesias takes notice too over at his Slow Boring substack. He writes:
Back in April of 2021, Ezra Klein wrote what I think is one of the most important columns of the Biden era explaining that economists and “thinking like an economist” had a reduced role in the Biden administration relative to the administrations of Barack Obama and Bill Clinton.
You can see that in a literal sense where the heads of the NEC and OMB don’t have degrees in economics. Or in a looser sense that economists Heather Boushey and Jared Bernstein on the Council of Economic Advisors are D.C. policy hands, not academic economists on loan to Washington. But you also see it in the policy approach. If you ask former Obama staffers with economics PhDs, they are very down on student loan cancellation. If you ask non-economists who work in Democratic Party politics, they’re way more enthusiastic. It’s not like there are no economists working for Biden or that Janet Yellen and Cecilia Rouse have no influence. But, as detailed in recent books by Elizabeth Popp Berman and Binyamin Appelbaum, there’s an economics style of reasoning that was very influential under Biden’s predecessors that has been less influential under Biden.
Yglesias thinks that, though it’s not his preferred approach to policy, there are some benefits to caring less about economics and more about politics because you might get more things done in the short run. The risk, he notes, is that the strategy will have decreasing returns in the longer run.
In my opinion, this is only true if you only care about getting spending out the door without caring much about the outcomes of policies. For instance, I think that Biden is more likely to be remembered as the inflation and high-debt president (there is a lot of blame to go around for these two things, of course) than as the president who helped us turn a corner on climate change. The reason being that the IRA legislation that everyone on the left is praising as the biggest investment in climate policy will, in fact, deliver little on the climate front as it supercharges cronyism. Also, unlike its name suggests, the legislation will likely not reduce inflation anytime soon, if ever, which voters may notice faster than the president hopes, and it will increase the debt.
That being said, I recommend Yglesias’s piece, which, as always, is an interesting read.