I feel sorry for Kevin Hassett. Of course he made a complete fool of himself two decades ago with his book on Dow 36,000 (still some ways away) with James Glassman, but he has had a good amount of time to get over that embarrassment. When he was appointed CEA Chair for Trump, he was of the few appointments Trump made that received praise, especially in the area of economics. Pretty much everybody else appointed was some combination of corrupt (a bunch of those), incompetent (see abysmal forecasting record of Lawrence Kudlow, NEC Chair), or just plain insane (see warmongering Peter Navarro). A longtime economist at the AEI and a former adviser of earlier GOP presidential candidates, Hassett had a conservative but mostly pretty respectable record, as well as being known as a nice guy. Even many people on the left said nice things about him at the time of his appointment. Indeed, he was not obviously corrupt, incompetent, or insane, despite some mistakes here and there (see Dow 36,000in particular).
Anyway, after getting appointed and Trump becoming president, Hassett has largely disappeared. Near as I can tell, the main time he surfaces was when the CEA put out the Economic Report of the President, the main ongoing official function of the CEA. For decades the CEA was viewed as the main body providing economic policy advice to presidents, and often the CEA Chair actually was the top individual economic adviser to the president, although who that is at any point in time has always ultimately been a matter of personalities. But then for reasons that remain mysterious to me, Bill Clinton created this new body when he came in, the NEC. It (and especially its Chair) was supposed to communicate to the media and Congress, it apparently being viewed that CEA Chairs were too abstract or in the clouds or whatever to engage in such communications. But the question became which of these would have the presidential ear, and more often than not these NEC Chairs have been closer to presidents than CEA Chairs, even though more often than not the case has been that the CEA Chairs have known more about economics than the NEC Chairs. This is ceetainly the case now, with the incompetent Kudlow regularly identified as being Trump’s “top economic adviser,” while the much more competent Hassett has been largely invisible.
Before getting into more recent events, let me note that the Economic Report of the President Hassett and his CEA staff put out avoided making actually incorrect statements, at least that I am aware of. Of course data favorable to the administration was emphasized and arguably overly optimistic projections were made regarding the future impacts of policies, especially the tax cut. But then this is normal CEA behavior in most administrations, putting as positive spin on actual data and making optimistic, but not off-the-wall projections of policies. So far so good, or at least not too bad.
Since Barkley has already said what needs to be said about Hassett, let me discuss this:
‘For decades the CEA was viewed as the main body providing economic policy advice to presidents, and often the CEA Chair actually was the top individual economic adviser to the president, although who that is at any point in time has always ultimately been a matter of personalities. But then for reasons that remain mysterious to me, Bill Clinton created this new body when he came in, the NEC. It (and especially its Chair) was supposed to communicate to the media and Congress, it apparently being viewed that CEA Chairs were too abstract or in the clouds or whatever to engage in such communications.’
About 40 years ago, I had the pleasure of listening to Walter Heller talk about his role as CEA chair for Kennedy and LBJ. He told us about the importance of both access to the White House as well as effective communication. In his day there was no NEC as Barkley notes. There were memos coming to LBJ from the Treasury and Heller wanted to elevate the role of the CEA.
LBJ has an aversion for reading any memo with a staple in it as he was a CEO type who expected memos to be no longer than a single page. Treasury tended to write long memos which the Chief of Staff decided had to be edited down. He knew Heller could do that and kept asking the CEA to rewrite these Treasury memos. Heller at first felt insulted but then realized it he obliged, the CEA controlled all economic advise heading to the President.
We never really needed a NEC. We need more economists like Walter Heller!
Agreed, but presumably most people vote based on their experience not the spin put on that experience by politicians and their lying allies. At the end of the day the farmers who are losing their farms because of the tariffs may still support Trump and the GOP because of racism or tribalism or abortion or whatever, but it will not be because they believe they will gain in the long run. Similarly the blue collar worker who has seen her real wages fall under Trump may still vote for Trump and the GOP but it will not be because of the awesome tax cuts for corporations and the very wealthy. It is irritating to hear the constant lies out of the Trump administration but at the end of the day I do not think it has much effect on voters. Even the “witch hunt” will be vindicated if Mueller comes up with the goods on Trump. That does not mean Trump’s base will desert him, but they have been living in an alternate universe for years. At the end of the day, reality based Americans, even those who may have doubts about the Mueller probe, the FBI and the Steele dossier, will view the final results with an open mind. I certainly do not think the GOP is going to garner a lot of African American votes in 2018 because of Hassett’s lies.
pgl,
I really do not know what inspired Clinton to make his stupid innovation. Heller was hardly the only influential and competent CEA Chair. While I have varyng degrees of respect for them, the following CEA Chairs for GOP prezzes were very influential: Herbert Stein for Nixon, Donald Greenspan for Ford, Martin Feldstein for Reagan, and Michael Boskin for G.W.H. Bush, the latter in charge immediately prior to Clinton coming to power. But I think Robet Rubin was the first to hold that position, who was clearly his lead economic adviser, and continued to be when he moved over to be Treasury Secretary, and clearly dominated Laura Tyson as CEA Chair, possibly a matter of sexism.
I agree that Hasset seems to be a genuinely nice person, and I think also well-intentioned, but having read his columns on Bloomberg over many years, I’m a little surprised to hear of him described as a “respected” economist in the professional, as opposed to personal context. I put him in the same class as Art Laffer, who also seems to be a very charming guy. They are both complete ideologues, whose economic analysis isn’t really analysis anymore.
maynard,
Welcome to AB….first time comments are help in moderation to check for spam and such.
Wikipedia lists out all the CEA chairs as well as members:
https://en.wikipedia.org/wiki/Council_of_Economic_Advisers#List_of_chairmen
Tyson had a couple of giants working with her on the CEA from 1993-95. Who did Rubin have? Gene Sperling is OK but he is not Blinder or Stiglitz.
MK,
Welcome to AB.
Regarding Hassett and Laffer I would say that Hassett is more respectable than Laffer. In particular he has avoided making silly Laffer-like forecasts that tax cuts will lead to higher revenues, even if he has participated in making forecasts about such matters that must be labeled “overoptimistic.”
BR,
I think you are being way too nice to Hassett. He is a total hack, has been his entire life. No better example than his housing bubble fantasy concocted out of bs.
“Sept. 22 (Bloomberg) — The financial crisis of the past year has provided a number of surprising twists and turns, and from Bear Stearns Cos. to American International Group Inc., ambiguity has been a big part of the story.
Why did Bear Stearns fail, and how does that relate to AIG? It all seems so complex.
But really, it isn’t. Enough cards on this table have been turned over that the story is now clear. The economic history books will describe this episode in simple and understandable terms: Fannie Mae and Freddie Mac exploded, and many bystanders were injured in the blast, some fatally.
Fannie and Freddie did this by becoming a key enabler of the mortgage crisis. They fueled Wall Street’s efforts to securitize subprime loans by becoming the primary customer of all AAA-rated subprime-mortgage pools. In addition, they held an enormous portfolio of mortgages themselves.
In the times that Fannie and Freddie couldn’t make the market, they became the market. Over the years, it added up to an enormous obligation. As of last June, Fannie alone owned or guaranteed more than $388 billion in high-risk mortgage investments. Their large presence created an environment within which even mortgage-backed securities assembled by others could find a ready home.
The problem was that the trillions of dollars in play were only low-risk investments if real estate prices continued to rise. Once they began to fall, the entire house of cards came down with them.”
https://www.elitetrader.com/et/threads/how-the-democrats-created-the-financial-crisis-kevin-hassett.137825/
Cannot be more wrong than he was, is, and will always be.
EM,
Perhaps I have been too kind to Hassett, but compared to the other denizens of the Trump admin, he still looks better than most of them. After all, Kudlow was even mofre wrong about the events of a decade ago than Hassett, although it is a close contest.