Thursday, August 21, 2008

Leonhardt Article on Obamanomics

David Leonhardt has a lengthy and very good New York Times Magazine piece on Obama's views on economics. (Leonhardt should be required to write every NYT article on economic issues.) The piece includes many new and interesting nuggets on "Obamanomics" from Obama's friends/advisers and from Obama himself. The most interesting and illuminating part is this quote from Obama:

"I think I can tell a pretty simple story. Ronald Reagan ushered in an era that reasserted the marketplace and freedom. He made people aware of the cost involved of government regulation or at least a command-and-control-style regulation regime. Bill Clinton to some extent continued that pattern, although he may have smoothed out the edges of it. And George Bush took Ronald Reagan's insight and ran it over a cliff. And so I think the simple way of telling the story is that when Bill Clinton said the era of big government is over, he wasn't arguing for an era of no government. So what we need to bring about is the end of the era of unresponsive and inefficient government and short-term thinking in government, so that the government is laying the groundwork, the framework, the foundation for the market to operate effectively and for every single individual to be able to be connected with that market and to succeed in that market. And it's now a global marketplace. "Now, that's the story. Now, telling it elegantly — 'low taxes, smaller government' — the way the Republicans have, I think is more of a challenge."
That's quite a revealing quote, and probably indicates what an Obama administration's economic policies would look like better than anything. Most people want to know what Obama's personal economic ideology is, not just the economic story his campaign is trying to tell. But Obama's inner-most feelings on economics couldn't matter less—what actually matters is the story he's trying to sell. Big legislative packages are crafted to win the same public support as campaign messages. So if this is the economic story Obama is selling to win over the majority of voters, then his economic policies will reflect that story. We've heard this before, but this aspect of Obama continues to be very encouraging:
As anyone who has spent time with Obama knows, he likes experts, and his choice of advisers stems in part from his interest in empirical research. (James Heckman, a Nobel laureate who critiqued the campaign's education plan at Goolsbee's request, said, "I've never worked with a campaign that was more interested in what the research shows.")
Also, I really hope the "University of Chicago Democrat" label for Obamanomics that Cass Sunstein suggests in the article doesn't stick. Too many Democrats, especially on the far-left, will take that to mean that Obama subscribes to the Chicago School of economics (which he obviously does not), and the ensuing stupidity on the blogs and op-ed pages will be mind-numbing. Why can't people just say that Obama subscribes to the MIT School of economics? It happens to be true, and it's not as misleading or needlessly confusing as "University of Chicago Democrat." Contrary to popular belief, the University of Chicago isn't the only place where economists "respect the power of markets."


Sean said...

You mention Democrats on the "far left"... Could you be more specific about who those Democrats are? I'm trying to establish that leftist Democrats exist.


Economics of Contempt said...

Sure. I meant "far left" Democrats like John Sweeney, Barbara Ehrenreich, Naomi Klein, et al. In other words, hard-core labor, Village Voice-reading '60s wannabes like these people, etc.

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