Saturday, April 8, 2017

Serious Problem: What You Need to Know About Trump's Just Named Pick as the White House’s Chief Economist

President Donald Trump has announced he will nominate Kevin Hassett to serve as the chairman of the Council of Economic Advisers.

From 1992 to 1997, Hassett was an economist in the Division of Research and Statistics at the Federal Reserve Board of Governors. He served as a policy consultant to the United States Treasury Department during the George H. W. Bush and Bill Clinton administrations.

He will be promoted as a "free market" economist but as can be observed by his government career he is really a technocrat for the state.

His idea for "solving" the Great Recession was for government to hire workers directly. From a 2010 piece in The Atlantic:
His problem with the stimulus wasn't that government spending inherently fails to grow jobs and the economy. The problem, he said, was that Obama's stimulus was not direct enough.

With the Recovery Act, the White House eschewed direct hiring and aimed instead to raise overall economic output in the hope that more activity would lead to more demand, which would lead to more hires. "Look at the stimulus and the number of jobs we've actually created, and it comes out to a couple million bucks per job created," Hassett told me.

"My idea is simpler. Find the unemployed and hire them."

If the government had spent the stimulus hiring people directly, we could have supported 23 million jobs, Hassett claimed. Hiring millions of unemployed workers directly into government organizations that already exist -- such as the military and the Army Corps of Engineers -- would be a much more efficient use of government funds.

Hassett defended direct government hiring, which the federal government used en masse during the Great Depression, in a conversation about the nature of our unemployment crisis...
"Since the economy has created this class of long-term jobless, the arguments for government hiring become stronger," he said.
This is a serious sign that a major league government interventionist apologist will be in the White House who doesn't understand even the basics of supply and demand and that supply and demand actually applies to labor markets---and that it is plain horrific to be hiring workers for government make work projects.

He's also considered an expert on taxes, which in the current environment means he is an expert on shifting the point of taxation but never really cutting taxes on net.

In short, he is an ideal mechanic for an interventionist administration looking for cover that wants to promote that it is being conservative.

This is the worst possible type of economist you want advising a president who is himself clueless about economics. He'll spin any crazed Trump idea in an attempt to support it on bizarre technocratic grounds. He won't challenge wacko Trump ideas.

As The Wall Street Journal put it:
Mr. Hassett has never been a polemicist...

1 comment:

  1. He is also co-author of the infamous and hilarious Dow 36,000.