Goolsbee sets populist tone
By: Ben Smith
March 30, 2009 04:31 AM EST
dyn.politico.com
As the Obama administration struggled to conjure up outrage at corporate America this month, it was a senior economic aide, Austan Goolsbee, who was first to channel the populist tone.
“I don’t see why these guys can order dinner in a restaurant,” Goolsbee ranted on “Hardball,” “much less be getting these bonuses!”
Later, on CNN, he suggested AIG executives be awarded a “Nobel Prize — for evil.”
Goolsbee, an economic adviser since Barack Obama’s 2004 Senate campaign, has emerged as a ubiquitous spokesman for the president’s economic policy. In an administration that brags about ignoring “cable chatter,” he’s a world-class jaw-boner, named National Extemporaneous Speaking Champion (yes, there is such a thing) in high school and college, before going on to a chair at the University of Chicago.
Goolsbee, 39, was confirmed this month to Obama’s three-person Council of Economic Advisers — and graduated to front man in selling his recovery plan.
“I like defending the president’s policies — he’s on the right track, and there’s a certain level of combativeness from an old debate guy, especially on cable, where they’re into that,” Goolsbee said in an interview in his bare office in the Eisenhower Executive Office Building.
Reminded of Obama’s dismissals of the cable news cycle, he shrugged.
“He’s a bigger man than I am,” he said of the president.
Goolsbee’s emergence has come at the right time for Obama, whose own pronouncements on the AIG bonuses and Wall Street meltdown have been bloodless at times, more professorial than podium-pounding. Goolsbee helps counterbalance the instinct of the front-line financial hands, Treasury Secretary Timothy Geithner and National Economic Council Director Lawrence Summers, to use public appearances to soothe the markets, not the public.
Increasingly, Summers and Geithner talk to Wall Street and to Congress, while three other economists talk to the American people: the distinguished, plainspoken CEA Chairwoman Christina Romer; Vice President Joe Biden’s aide Jared Bernstein, who is the most left-leaning senior economist in the administration; and the Chicago debate champ, who has ranged from daytime cable to “Face the Nation” since being confirmed.
Those three hail from different worlds within economics than Summers, Geithner and their aides, who all belong to the House of Rubin, the Clinton Treasury Secretary and Citibank director who advised Bill Clinton to keep deficits down and the bond market happy.
“I’m not a bond-market guy, that’s for sure,” Goolsbee said.
Goolsbee was once thought likely to head the CEA, the job that went to Romer; he now doubles as the chief economist of an advisory commission led by former Fed chief Paul Volcker. “He’s very articulate spokesman for the president, which makes him important in the White House,” said Volcker, adding that Goolsbee persuaded him last year to make a rare public endorsement of Obama. “I think they need him.”
Goolsbee also was a central figure in designing the housing plan released in mid-February.
CNBC’s Rick Santelli and others attacked the White House for allegedly helping reckless borrowers, something Goolsbee said the program was actually designed to avoid.
“The fact that I was not yet confirmed and I could not go on TV and confront Rick Santelli drives me crazy,” Goolsbee said.
Though he enjoys the stand-ups on the South Lawn, Goolsbee hasn’t spent his career gunning for a White House job. He first met Obama after the Illinois state senator’s aides had found their pleas for advice rejected by economists at institutions like Harvard and MIT.
“A Senate campaign is like a presidential campaign in that there’s all these national issues, but it’s totally unlike a national campaign in that no one will help you,” Goolsbee recalled.
The economist — who had vaguely known Obama as “Michelle’s husband” and his state senator — started e-mailing over memos, and calculating the costs of unusual economic proposals from Obama rival Alan Keyes.
He recalls, cackling, calculating the cost of one plan to exempt the descendants of slaves from income taxes for two generations and another to replace the income tax entirely with a sales tax.
When he finally met Obama, the candidate pronounced himself shocked that “Professor Goolsbee” lacked a pipe, beard, and smoking jacket. Goolsbee replied that Obama “stole my bit” by describing himself as a “skinny guy with a funny name.”
Goolsbee, who was one of two economists who began working with Obama before his campaign launched, is left wing only by University of Chicago standards, though has relatively little connection to the troubled world of high finance. Obama’s platform reflected his preoccupation with practicality and research as well as a centrist thrust that put Obama to the right of John Edwards and even Hillary Clinton on issues including health care.
But Goolsbee vanished from the public campaign in the heat of the primary, when a Canadian government report emerged saying that, in a meeting with the Canadian consulate, he’d indicated that Obama’s anti-NAFTA rhetoric was “more about political positioning.”
Goolsbee continues to deny that he said anything of the sort, though the president recently reassured Canada and Mexico that he won’t take the sort of dramatic, unilateral steps he suggested on the campaign trail.
Goolsbee re-emerged in the fall in a series of cable debates with McCain economic adviser Douglas Holtz-Eakin that made him a bit of a cult figure to Obama’s backers. The left-leaning news site TalkingPointsMemo produced a video titled “Austan Goolsbee: Master of the One-Liner.”
“There is more information on the back of a box of Fruit Loops” than in McCain’s economic plan — he told Holtz-Eakin in one appearance, and the former McCain aide doesn’t like to dwell on the memory.
“I did not relish the 136,256 rounds I went with him,” said Holtz-Eakin, “because he was a very good debater.”
It was a confrontation for which Goolsbee had been preparing a long time. Born in Waco, Texas, and a bit of a child prodigy, he made his way to the Milton Academy outside Boston for high school, where he lugged around catalog boxes full of newspaper clippings as preparation for “extemp” competitions, in which debaters are given just minutes to debate a current topic.
At Yale, he was again a national champion, a drawling kid who “seemed like he had just walked out of a Western movie” on a debate team better known for bow-tie-wearing preppies, recalled Slate writer Dahlia Lithwick, a debate partner. “You know how every year there’s somebody in college that everybody knows who they are within the first week? He was that guy,” she said.
Goolsbee hails from “the pragmatic, policy-oriented part of economics,” said economist James Poterba, who supervised his dissertation at Massachusetts Institute of Technology.
For Obama, he’s set to be a key player on a taxation task force that he said will consider — among other things — his own particularly dramatic tax proposal: the “simple return.” Under the proposal, which was part of Obama’s platform, 40 percent of Americans whose income is all reported by their employers anyway would receive pre-printed tax returns and simply sign off and return them, skipping the time and expense of tax preparation.
At the moment, though, there’s little focus beyond the ongoing economic crisis, and Obama’s toughest economic challenge, Goolsbee said, remains the dramatic, continuing loss of jobs.
“The jobs crisis is the hardest to fix in the immediate term because job growth is a lagging indicator,” he said. “Even once we have laid the groundwork for financial recovery, economic recovery, housing recovery — all of those things — it still takes time to turn the job market around because ultimately that’s a slow-moving process. That’s the big boat to turn around.”
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