Friday, October 17, 2008

Obama's Corporatist Economic Advisors

Obama's Corporatist Economic Advisors
Hopefully, they'll leave us with some change

Barack Obama's economic advisors include some youngish Democratic centrists, genuinely bright economists like Austan Goolsbee and Jason Furman. Their pedigrees include Yale, MIT, Harvard and the University of Chicago, an historically free-market bastion. In many instances, these individuals display a surprising sensitivity to recognizing the spontaneous order brought about by millions of actors in the marketplace. However, the few relatively sane positions they hold will likely be drowned out by the converging cavalcade of interest groups that will accompany a potential Obama victory.

In spite of Obama's anti-trade campaign rhetoric, the members of his economic brain trust are friendly to trade and globalization - so much so that the far left has screamed bloody murder, accusing Furman and Goolsbee of having "Wall Street viewpoints" and being "crypto-Bushies." Furman authored a notable paper lauding the salutary effects of Wal-Mart's low prices. Speaking of the net benefits that Wal-Mart's cost savings gave the working poor -- an estimated $263 billion dollars -- Furman declared "there are very few public policies that I’ve advocated in my life that would make as big a difference as that." His estimates of wage suppression ran about $5 billion. "It's just an enormous differential." The Nation's Naomi Klein almost summons the lynch mob, and then concludes their saving grace might just be their paeans to Keynesianism and John Kenneth Galbraith.

Obama's Democratic "Chicago Boys" recognize the value of lower corporate tax rates in principle. Goolsbee determined in a study that taxing Internet transactions could reduce sales by up to a third and stunt e-commerce significantly. Furman has called for lowering tax rates generally and broadening the tax base by limiting special exemptions, calling incentives to invest in tax-favored activities (as opposed to economically productive activities) perverse. In a July 24 interview with NPR, Furman rattled off an astonishing litany of potential budget savings, including ending some subsidies and overpayments to Medicare, banks that make student loans (!), and wealthy farmers.

On the other hand, these things are now de rigueur in any intelligent discussion of political economics today. Only the truly unlettered deny that confiscatory tax rates, complicated tax codes and protectionism are detrimental to a country's economic well-being.

One would hope such bright young minds would find their own voice and not serve as servile executors of viagrafied interest groups, from longshoremen to Lehman Brothers. Will they just go along with the most noxious proposals the Obama team brings to the table? One particularly ominous piece of legislation is the so-called Employee Free Choice Act, a labor-backed step towards coerced unionization on a national level that portends to do away with secret ballots at the workplace.

The Pelsoi/Reid Congress are already clamoring for billions in new spending, as if current levels weren't bilious enough. With an Obama presidency, expect every imaginable Democrat constituency (and then some) to have their eager hands out; after all, Barack Obama has presented himself as all things to all people, people with not all that much in common.

Given their Keynesian roots, and looking at the rest of their policy proposals, it could be argued that these guys are not truly free marketeers, but pragmatic corporatists and utilitarians hired to keep Wall Street and tax-eaters happy (these days it seems those two are converging). Furman was groomed by high-powered Democratic pro-business luminaries such as Robert Rubin and Joe Stiglitz, who successfully steered Bill Clinton towards deficit reduction while only marginally increasing top tax rates.

Goolsbee cheer-led subprime lending in his March 2007 NYT column "‘Irresponsible’ Mortgages Have Opened Doors to Many of the Excluded", pooh-poohing predictions of economic bust. This seems to make clear under what kind of paradigm the Obama economic team operates; we know how well Wall Street lenders love the easy credit gravy train. As Justin Raimondo documented, Obama's campaign has received huge support from Lehman Brothers, Goldman Sachs and other top execs of the nation's financial giants, all beneficiaries of the shameful bailout scheme.

Jason Furman himself comes from an entrenched Democratic Party establishment background. Furman's mother, Gail, a Manhattan child psychologist, is the matriarch of the Furman Foundation, a fund that deals cash to Soros-backed groups like the Tides Center, People for the American Way, left-leaning NGOs, and Media Matters, David Brock's left-wing journalist team. Conspiracy nuts will love the fact that the Furmans have bestowed thousands to the Council on Foreign Relations on an annual basis. Furman grants mirror those of Soros and Herb and Marion Sandler, the controversial pair implicated as major players in the subprime lending debacle and Wachovia collapse. Furman herself is an effusive donor to the DNC and Democratic candidates across the country. There is little doubt she'll grab Jason by the ear and have him march her in to the Oval Office so she can have her say with Barack. If momma ain't happy, ain't no one happy.

Those of us who tend to favor markets and choice over state domination hope these centrist advisors will keep Obama from embarking on too many asinine shenanigans if he is elected. They would serve him well to mute the traditional Democrat constituencies, whose scoreboard lights up with every new tax, regulation and Federal bureaucracy. In the 1990s, a reinvigorated GOP Congress helped contain the Clinton Administration's more ambitious targets, and as a result it left a relatively fiscally conservative record. Obama's market-friendly centrists may try to bring a level of reasonableness to a potential Obama administration, but with Democratic trifecta in place, we can only doubt this.

Tom Walls is a travel consultant and translator in Lake Worth, Fla. He has a long history of activism in libertarian organizations, from the National Libertarian Party to the RLC. He supported Ron Paul in the GOP primaries and is voting for Bob Barr in the general election.