Saturday, November 29, 2008

Harvard Dissed Obama Choice to Head CEA

President-elect Barack Obama filled the last of the four top economic positions Monday, announcing that his Council of Economic Advisers will be chaired by University of California at Berkeley economist Christina D. Romer, who, according to the Harvard Crimson, "was a subject of national indignation earlier this year when Harvard did not offer her a tenured professorship."

Romer appears to be the most sane economist of all Obama's selections, which is not saying a lot given the other selections. But, she clearly understands that money supply plays a role in the business cycle and she appears to be in favor of tax cuts and government spending cuts.

There are some problems with her anti-tax stance though, in that she reaches the conclusion based on some pretty wacky econometric voodoo conclusions that Kevin Drum discusses and she leaves a loophole in her thinking to occasionally raise taxes, as Drum points out:
One of the Romers' conclusions, by the way, is that tax increases designed to reduce an inherited deficit have a positive impact on economic growth. So if Obama ever does raise taxes, expect this to be the reason he gives for it.

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