Council of Economic Advisors

In a New York Times op-ed, Christina Romer, the former chair of President Obama’s Council of Economic Advisors, argues--contra her former boss--that there is no compelling justification for policies aimed at supporting U.S. manufacturing. She lays out and rejects a few theoretical justifications for supporting manufacturing, including the idea that there are large positive externalities--large social benefits relative to what private companies can capture--tied to the sector. Her arguments are unconvincing.

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Dear Mr. President, I write as a supporter who understands how full your plate is right now. Three foreign wars, a fragile recovery from the deepest recession in many decades, and stubbornly high unemployment would be enough for any president. Regrettably, some issues present themselves, unbidden and unwelcome, and refuse to go away, leaving presidents no choice but to address them. In my judgment, which is increasingly widely shared—in the U.S.

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American Enterprise Institute economist Alan Viard, former member of George W. Bush's Council of Economic Advisors, laments the end of the upper-income Bush tax cuts. It happened, Viard argues, because Bush failed to properly sell the upper-income tax cuts: [T]he high-income rate reductions provide much greater incentive for investment and other economic activity, relative to revenue loss, than the middle-class tax cuts.

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The first-day stories on Peter Orszag’s looming departure from OMB highlighted a number of possible successors.

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Ezra Klein has a good column this weekend pointing out that the discussion of federal deficits and the stimulus misses the fact that the federal stimulus has, at best, merely counteracted the anti-stimulus from the states. State governments must balance their budgets, which means that during recessions they cut spending and raise taxes, which in turn deepens the recession.

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Glenn Hubbard, the former Chairman of the Council of Economic Advisors under George W. Bush, has an op-ed on the budget in today's Wall Street Journal. The good news is that, in addition to demanding spending cuts, Hubbard sorta-hypothetically concedes that tax increases might be needed. The bad news is that, like any good movement conservative, he insists such tax hikes must be regressive: Our present income tax already relies very heavily on revenue from high earners; the top 1% pay well over one-third of federal income taxes. Mr. Obama's budget increases the reliance.

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Where's health care reform? "Inside the five yard line," says Robert Gibbs. On the two yard-line, says President Obama. If the administration isn't sure what this tells them about how to proceed, I suggest they read this paper by the husband of the head of their Council of Economic Advisors.

Greg Mankiw, chairman of the Council of Economic Advisors under George W.

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While Congress slogs through the final months of the health reform debate, the American people remain focused on the economy. With good reason: We’re in a very deep hole, and it’s not clear how we’re going to get out.  As Christina Romer, chair of the president’s Council of Economic Advisors, pointed out in her recent testimony before the Joint Economic Committee, “The shocks that hit the U.S. economy last fall were, by almost any measure, larger than those that precipitated the Great Depression.” And despite unprecedented government action, the labor market has reflected these shocks.

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So the first tranche of quarterly data tracking where federal stimulus dollars are going and how they are being used is out and the answer is… well, it’s pretty hard to say. Here are the straight numbers: Roughly, 5,200 federal contractors received around 9,100 contracts worth about $16 billion that created or saved a little over 30,000 jobs. But what do those really mean? Sure, it’s an admirable presentation, with the official Recovery.gov website heralding all sorts of new maps and tables listing places, names, projects, and job counts.

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