While many in this community have been caught up in Anthony Weiner’s sophomoric escapades, which may end up costing him his job, (results from a WCBS-TV New York online poll, released here late yesterday, notes that 76% of respondents believe Weiner should resign immediately), a much more important political story played out in Washington, D.C., on Monday: Austan Goolsbee, Chairman of the President’s Council of Economic Advisors, announced his resignation.
In the past couple of hours, give or take, Huffington Post has published an exceptional, incisive analysis by Peter Goodman, William Alden and Zach Carter (with Janell Ross, Shahien Nasiripour, Sam Stein, Ryan Grim, and Nate Hindman contributing) on this developing story, entitled, “Austan Goolsbee Exit: Obama Advisor Leaves Behind Frustration, Political Dysfunction.”
More about HuffPo’s must-read (IMHO) coverage of this in a moment.
Based upon my limited knowledge of Goolsbee, I believe–contrary to some in this community that opt to provide a downright shallow, two-dimensional report of this matter based solely upon a White House press release, which we're told is the beginning and end of this story–this event is, indeed, as the folks at HuffPo used the words in their title of tonight’s analysis, a harbinger of increasing Democratic "frustration" caused by Washington’s (and, yes, the administration’s) "dysfunctional" approach, in general, to managing our economy.
Ironically, I covered much of this in a post just over nine hours ago, entitled: “You don’t need a degree in economics to grasp the logic of that.” I posted this before I was aware of today’s Goolsbee story. (You’ll just have to take my word for it.)
I’m virtually certain that Austan Goolsbee is–and will be recorded as such when the history of this administration is memorialized–one of the most loyal members of the Obama Administration. I’m also virtually certain that (based upon what I know about Goolsbee, given his “New Keynesian” beliefs and his support of the sentiments of Joseph Stiglitz; and even his public comments as I noted them in my earlier diary on Monday) Austan Goolsbee’s level of frustration with just about everything that’s going on in D.C. right now concerning our economy, as the folks over at HuffPo have noted in their analysis in the past few hours (see farther down, below), must be at a veritable boiling point.
In a diary that I posted here on March 6, 2009, which is one I’ve referenced many times since, we learned that–all along–Austan Goolsbee, despite his public talking points over the past 2-1/2 years to the contrary, knows that our nation’s jobless numbers are, easily, a point or two higher than those published by the Bureau of Labor Statistics each month.
And, as I noted in my DKos post on June 6, 2009, “Stiglitz: ‘We let banks’ political pressure, fear-mongering win,’” Goolsbee is a solid fan of none other than Nobel Prize-winning economist Joseph Stiglitz.
A few days prior to Austan Goolsbie's formal confirmation for his post as a member of President Obama's Council on Economic Advisors, and shortly after he read a diary of mine which quoted him, right here on DKos, I received a two-sentence email from him suggesting I checkout this Newsweek article: "Chasing Stiglitz."
by Michael Hirsh
December 4, 2008
...In a spate of books, essays and speeches dating from the early '90s, Stiglitz denounced Rubin's support for repeal of the Glass-Steagall Act, which separated commercial from investment banking for precisely the reasons we are now witnessing on Wall Street: new "full-service" banks would seek to hype companies that their stock-market side underwrote and issue loans to them even if they were not credit-worthy.
"The ideas behind Glass-Steagall went back even further [than the 1929 crash] to Teddy Roosevelt and his efforts to break up the big trusts," he wrote presciently in "The Roaring Nineties" (2003). "When enterprises become too big, and interconnections too tight, there is a risk that the quality of economic decisions deteriorates, and the 'too big to fail' problem rears its ugly head." Unfortunately, Stiglitz wrote, his worries "were quickly shunted aside"' by the Clinton Treasury team. Earlier, in his book "Globalization and its Discontents" (2002), Stiglitz became the most prominent voice in Washington to say plainly that free-market absolutism, which began with the Reagan revolution and continued under Clinton (who upon being elected declared the era of "big government" was over), was ill-founded theoretically and disastrous practically. "In 1997 the IMF decided to change its charter to push capital market liberalization," he wrote. "And I said, where is the evidence this is going to be good for developing countries? Why haven't you produced some research showing it was going to be good? They said: we don't need research; we know it's true. They didn't say it in precisely those words, but clearly they took it as religion."
As far back as 1990, Stiglitz argued in a paper (it can be found on The Economist's Voice Web site at www.bppress.com) against securitizing mortgages and selling them because "when banks retained the mortgages which they issued, they had greater incentives to screen loan applicants." He asked, again with startling prescience: "Has securitization been a result of more efficient transactions technologies, or an unfounded reduction in concern about the importance of screening loan applicants?" None other than Milton Friedman, the founding father of the free-market era, told me in an interview before he died that Stiglitz also had been more correct than everyone else about how to transform Russia into a market economy when he argued that institution-building and creating regulatory authorities were an important preliminary step. "In the immediate aftermath of the fall of the Soviet Union, I kept being asked what the Russians should do," Friedman told me in 2002. "I said, 'Privatize, privatize, privatize. I was wrong. Joe was right. What we want is privatization, and the rule of law...”
In the past couple of hours, the folks over at HuffPo have expounded–and then some–on the themes I mentioned and provided links to, above, in: “Austan Goolsbee Exit: Obama Advisor Leaves Behind Frustration, Political Dysfunction.”
IMHO, it is spot-on. And, it may be not just tonight’s “must-read,” but this month’s must-read.
Austan Goolsbee Exit: Obama Advisor Leaves Behind Frustration, Political Dysfunction
By Peter Goodman, William Alden and Zach Carter with
Janell Ross, Shahien Nasiripour, Sam Stein, Ryan Grim, and Nate Hindman contributing
June 7, 2011 1:24AM
Austan Goolsbee, one of President Barack Obama's longest serving policy advisers and the chairman of his Council of Economic Advisers, leaves his post pretty much as he inherited it: with the economy moribund, no clear path to vigor in sight and the unemployment rate stubbornly elevated.
More than ever, the atmosphere in Washington seem so laced with toxicity that policymakers have largely given up merely debating how to spur the economy, cognizant that any approach will be deemed politically impossible.
This, suggest policy-watchers, appears to have played at least some role in prompting Goolsbee to finally throw it in and head back to the University of Chicago to resume his academic career. He felt frustrated and tired of seeing what he viewed as necessary policies sacrificed to the imperatives of political positioning and compromise.
So runs the narrative among those inclined to accuse the administration of failing to marshal an adequate response to the strains of the Great Recession, setting aside plans to put Americans back to work via government-financed projects in favor of scrimping to shrink budget deficits…
"There's no question that the administration has made the deficit a top priority for much of the year," Dean Baker, co-director for the liberal Center for Economic and Policy Research, told the Huffington Post. "That's led the administration to abandon any idea of any kind of stimulus or effort to stimulate the economy and I think that may be somewhat frustrating or at least troubling for a wide range of economists. Goolsbee may not be an exception."
The HuffPo piece continues on to mention Goolsbee’s progressive and Keynesian leanings. And, how, “In the Obama administration, it seems, satisfying the rules of tenure has apparently become the new version of "spending more time with the family."
Of course, we’re also told that “…a senior administration official told HuffPost that ‘going back to teach in the fall’ was always Goolsbee's plan, dismissing any suggestion of drama around the announcement. “
And, as I note above, the bottom line is that, as HuffPo also notes, this evening, “…a survey of Goolsbee's pronouncements and positions suggests that he chafed against the perpetual compromises implicit in governing -- surely a source of frustration in any era, and especially so for an economist serving in the current moment, amid warnings that a failure to act risks a lasting period of painful economic stagnation.”
There’s much more to HuffPo’s exceptional analysis of this situation, with the overriding theme being (which former Obama auto czar Steven Rattner also noted in his book, “Overhaul”) that “…Goolsbee is among those inside the administration who bear scars from their scrapes with Summers, whose take-charge mentality does not always leave room for polite differences of opinion.”
Among many interesting comments and anecdotes which I don’t reference herein (again, this article is well worth your time), the folks at HuffPo quote progressive economist Dean Baker towards the end of the piece…
"I am worried that there are no economists that have any obvious standing with Obama left in the administration," said Baker, the Center for Economic and Policy Research co-director. "Geithner has a totally Wall Street perspective, as does Daley. Obama desperately needs someone to represent the rest of the country."
In recent weeks, Goolsbee has sounded -- at least in retrospect -- like a man who could not wait to depart Washington for any other place…
For progressive Democrats everywhere, Austan Goolsbee’s departure cannot be a good sign of things to come.