Your Future Depends More On This Man Than You May Think

Austan Goolsbee

Since the economy is obviously on everybody’s mind right now, I thought it appropriate to dedicate my first blog entry to the financial brains behind the man we just elected President. University of Chicago economist Austan Goolsbee has been President-elect Barack Obama’s head economic advisor for about 5 years now and was his senior economic policy advisor during the campaign. Due to his age (39) and relative lack of private sector experience, it is doubtful Goolsbee will end up as Secretary of the Treasury, but Barack has this guy on speed dial, trust me.

He was summa cum laude at Yale, is a Fullbright Scholar, and has won a full shelf’s worth of competitive public speaking awards, so we know he’s got the mental chops. But we’ve obvisouly been fooled more than once or twice by guys with fancy degrees and awards who have no bearing on policy realities, so what does Goolsbee (and by implication, Obama) really believe on the economy?

I’ve done a little research and so far things look promising. Some of Goolsbee’s stances:

Free trade is GOOD, although some agreements need to be amended to reflect labor and environmental concerns.

Free trade agreements should not be 2,000 pages long (i.e., 3 pages that open markets, and 1,997 pages of loopholes and exemptions)

Relatively small tax increases on the highest earners = Necessary; Big tax increases = BAD

Supply-siders misinterpret the behavior of high earners. I.e., you take $25,000 more in taxes from a high earner, they are going to downgrade from a 7-series to a 5-series and buy a few less Louis Vuitton bags. They aren’t going to fire a woker.

Education leads to higher wages and is the main element to jump-start stagnant middle class wages (it sounds like commonsense, but you’d be amazed how many economists and politicians don’t quite get the message on this)

A tax cut without a spending cut is not really a tax cut (or in the words of the father of conservative economic theory, Milton Friedman, “to spend is to tax”), an idea that was so repugnant to the Bush administration that they probably threw crosses and garlic at anyone who mentioned it

Personal retirement accounts for Social Security = BAD

We need to get tough with China (through the WTO) and not let them annihilate the economy of every other developing nation

How much of this does Obama agree with? From his stated policies during the campaign and deep-rooted relationship with Goolsbee, we can assume, a lot, if not all. It certainly belies the absurd argument that Obama was a “socialist”. Particularly being that the majority of the yokels who called Obama a socialist wouldn’t be able to give you a coherent definition of socialism if you put one of their guns to their head.

We’ll have to see how President-elect Obama’s economic team plays out and see if he sticks by his campaign promises to make the tough economic decisions which may be harsh in the short run, but lucrative in the long run, but I think that we can all agree with conservative columnist George Will that Goolsbee “seems to be the sort of person you would want at the elbow of a Democratic President.”

Here are some more links on Goolsbee, including Will’s column. In particular check out the column Goolsbee wrote on supply-side economics in the New York Times, he is speaking my language.

Will: http://www.washingtonpost.com/wp-dyn/content/article/2007/10/03/AR2007100302003.html

Supply-side: http://www.nytimes.com/2008/01/20/business/20view.html?scp=1&sq=goolsbee

Goolsbee w/ Kudlow: http://www.cnbc.com/id/26441455