Help Wanted: Economic Advisors for President

The Bush administration will soon have a couple of positions open for economists. Bush’s chair of the CEA and director of the NEC will both be stepping down in the next couple of months:

Stephen Friedman, who left Wall Street to assume one of the top economic posts in the White House, will return to the private sector Dec. 31 after two quiet years in Washington, White House officials announced yesterday. Friedman’s departure as director of the National Economic Council will open a key economic policy position just as President Bush begins his ambitious push to overhaul Social Security and the tax code.

…N. Gregory Mankiw, chairman of the White House Council of Economic Advisers, is also expected to leave early next year. Administration officials are sounding out Massachusetts Institute of Technology professor James Poterba — an expert on Social Security and tax matters — to take Mankiw’s slot.

…Friedman’s slot [is] open for a heavyweight who could bump heads in Congress and forcefully advocate efforts to introduce private investment accounts to Social Security and to simplify the tax code while shifting taxation from savings and investment.

…Conservatives are pushing former senator Phil Gramm (R-Tex.), publisher Steve Forbes or a top business leader, such as Fred Smith, chairman of FedEx Corp. Also under consideration is investment banker Gerald Parsky, who served on Bush’s Social Security commission, and Indiana businessman Al Hubbard, a longtime friend of the Bush family.

Poterba is a highly skilled and respected economist with impeccable academic credentials. The main question that I have regarding his possible appointment to the CEA would be why he would even consider jeopardizing his reputation by being reduced to mouthing the words given him by the political operatives in the White House.

The NEC position, on the other hand, is the spot where the administration’s top economic policy salesman typically resides. As the article suggests, Friedman has been the most invisible NEC director ever, virtually never contributing his voice to public policy debates in Washington. So rather than good credentials as an economist, Bush is probably looking for someone with some force of personality, and even better if they also have connections on Capitol Hill. But most importantly, based on Bush’s second term appointments to date, the candidate must also have unquestioning loyalty to Bush himself — the best (perhaps only) qualification needed for a position in the Bush administration.