Talking With The Romers

by: Chris Bowers

Mon Nov 24, 2008 at 14:45


If you are looking for more information on Christina Romer, the newly appointed head of the Council of Economic Advisors, I would recommend an interview she jointly conducted with her husband back in late June. It is accessible to non-economics academics, while still being lengthy enough to provide real insight to her thinking.

Here is a positive passage, showing her commitment to research and keeping an open mind:

We didn't know what we were going to find. One of the stressful things about the type of narrative research we do is that it involves a huge amount of work before the first regression can be run. But in this case, we thought the results would be interesting whichever way they came out.

Here is a less positive passage, praising the economic status quo and the figures who helped engineer it:

Not until the Volcker, Greenspan and now Bernanke era do you get a basically pretty sensible model-the view that inflation is bad, the sustainable rate of unemployment is moderate and inflation will respond to slack.

And where she didn't see the current crisis coming:

So I think the real question is going to be, What's the line we walk from here? Think about the action we saw just today [June 25], where the FOMC didn't keep lowering the federal funds rate. It said, "We're probably through the worst in the financial markets; we had to fight that fire, but now we're going to look at what's happening to inflation. There are benefits to low inflation, and so we're going to have to think about how much we stimulate the real economy and how much we're concerned about inflation." The fact that the FOMC is thinking this way suggests that even if they don't do everything exactly right, they're not going to make the sorts of huge mistakes policymakers made in the 1970s.

My initial impression is that Romer is favorable to the economic policy status quo, but at least she is willing to keep an open mind pending further research and real-world results. Looks to be another "centrist pragmatist" of the sort that we keep hearing so much about in Obama's cabinet. I'm going to walk out onto a limb and predict that Obama keeps appointing these sorts of advisors because that is who he is himself, rather than part of some secret plan to govern to the left.

Oh, and for some additional insight on Christina Romer, it appears that apart from Kerry and Obama, the only two canidates she has given money to were Bill Bradley and Wesley Clark. I won't divine want that means in terms of economic policy, but she does seem to have a habit of backing underdogs for the Democratic nomination. As a lifelong fan of underdogs myself, I find that encouraging.

Chris Bowers :: Talking With The Romers

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Talking With The Romers | 11 comments
Can We Get A (4.00 / 3)
Melody Barnes shout-out?  We have a bona fide progressive in the Obama economic team.  

I am disappointed in the lack of progressives, esp. in foreign policy, but right now I have a president suggesting massive stimulus package that focuses on energy, jobs, and infrastructure, while also preparing to really fight for a big new health care plan.  Somehow I'm not too upset.

You dont get it (0.00 / 1)
we are settling scores here! we need to match bushes ideologues so we can beat them at their game!
[ Parent ]
Not a Progressive (0.00 / 0)
The Center for American Progress want to labor arbitrage US professionals by "increased labor mobility", which is massive guest worker Visas, probably controlled by the WTO.
(see WTO, GATS mode 4 and India especially is demanding this to increase their outsourcing business).  

Also, organized labor (AFL-CIO, IEEE, AFL-CIO DPC, CWA, IBEW, etc.) was against Kennedy's immigration bills, for precisely this reason.  The AFL-CIO worked to defeat those bills because they were not about "amnesty" or this inane rhetoric and they were about labor arbitraging workers, with the #1 target being the Professional career level workers.  

Melody Barnes was a central council in that effort to labor arbitrage US workers a central figure in crafting those bills as part of the Senate judiciary committee.

There is nothing progressive about wage arbitrage, global labor arbitrage here.

Just because a think tanks puts the term Progressive in it's title, does not make the policy agenda behind it Progressive.

This is a major, major multinational corporate agenda as well as India outsourcing companies and China.

They want "unlimited labor mobility" as a way to technology transfer and also flood labor markets, which by the law of supply demand, will repress wages.

That's a major component of labor markets and sure is not Progressive.  Increasing global labor arbitrage or the race to the bottom is just not middle class friendly.

NoSlaves.com  


The Economic Populist

[ Parent ]
I will repeat what I said in QH (1.00 / 4)
Unless they have totally socialist policies and have pics of Hugo Chavez and PLO in their offices they are not progressive enough! glad you are not passing out the purity tests for the picks.
[ Parent ]
you tr for facts? (0.00 / 0)
Sorry to point to real policy agenda but that is the history here on global labor arbitrage agenda.

I suggest you deal with this and not try to repress these facts!

This has nothing to do with Hugo Chavez, PLO and a hell of a lot to do with NASSCOM, ITAA, Compete America and other corporate lobbyists hell bent on controlling global migration flows, domestic labor markets, often through trade agreements and manipulation of domestic immigration policy, target labor market #1, the United States.  target labor market #2, EU and UK.

Do you realize that the #1 way to curtail offshore outsourcing is to not raise the cap on guest worker Visas and pass S.1035 intact?

This is labor economics reality.  Deal with it.

NoSlaves.com  


The Economic Populist

[ Parent ]
Remember Obama is a Socialist. (0.00 / 0)
McCain said so.

Of course, they don't need pics of Chavez nor the entire PLO (that would be a big picture, perhaps a group shot from google satellite view would suffice). They just need to be supportive of them. ("If you go wearing pictures of Chairman Mao, you ain't gonna make it with anyone anyhow.")

So if we take out the pictures from the purity tests can we pass them out? They will still need totally socialist policies to go with Obama's, of course.

Jeff Wegerson

[ Parent ]
but (0.00 / 0)
making upper income professional compete with those overseas reduces income inequality here. Working class people need legal or computer or whatever services, and this reduces wages at the top. How is that bad.  
[ Parent ]
The secret plan (4.00 / 3)
I just did a quick overview on some of her Academic papers and at least I saw real mathematics, real economics, real analysis.  

That's encouraging for getting policy based on the real stats and theory sure would be nice!

That cannot be said of many of these people.  When they talk about Americans needing more Mathematics and Science education, honestly they are having a bad case of psychological projection.  (the United States has the top universities in the world so US college graduates are the highest skilled in the world).  

Not seeing the economic tsunami coming at us, especially in derivatives, I agree with you, that's not a good sign.

NoSlaves.com  


The Economic Populist

Carrot and stick? (4.00 / 2)
Can we acknowledge the counterexamples to the "there are no progressives anywhere in the Obama administration" thesis, e.g. Melody Barnes?

Conduct your own interview of Sarah Palin!
I'd don't understand Chris's complaints here (4.00 / 2)
For the second quote, is Chris saying that he disagrees?  In what way?

Perhaps Chris thinks monetary policy has no effect on inflation?

Perhaps Chris thinks that by increasing inflation we will decrease unemployment?

Perhaps Chris wants a "massively expansionary monetary policy"

Those are the ideas she is disagreeing with. I hope Chris gives us his explanation of what went wrong in the 1970s, if anything, because I don't know what to make of his complaints here.  

Or is this just a matter of wanting her to call Greenspan and the Fed names?

I'm not an economist, I don't pretend to know the answers.  Maybe Robert Oak will explain it.  But I literally don't know what I'm supposed to object to in the interview.


New Jersey politics at Blue Jersey.

Disagreement (0.00 / 0)
Not until the Volcker, Greenspan and now Bernanke era do you get a basically pretty sensible model-the view that inflation is bad, the sustainable rate of unemployment is moderate and inflation will respond to slack.

I'm not sure Greenspan and Bernanke deserve much credit for that at all.  In fact, quite the contrary, they've been expansionists with the money supply.  Bernanke has a little bit of an excuse, given that Greenspan left as the banking system was about the explode, but neither of these keys can be considered inflation hawks by any stretch of the imagination.

Where do you disagree with the theory, though, Chris?  This is pretty standard-issue New Keynesian/Phillips Curve stuff.

Talking With The Romers | 11 comments





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