Angry Bear » Jim Tankersley

My Audacious Wish: Uwe Reinhardt for Secretary of Labor.

Beverly Mann | February 6, 2013 1:58 pm

Law

When it comes to the most important economic challenges facing the nation, President Obama offers soaring rhetoric. He campaigned vigorously against the decline of the middle class. He launched his new term this past week with a speech declaring widespread prosperity to be a deeply American virtue — and a threatened one.

“We are true to our creed when a little girl born into the bleakest poverty knows that she has the same chance to succeed as anybody else,” Obama said in his second inaugural address, “because she is an American; she is free, and she is equal, not just in the eyes of God but also in our own.”

Then he talked a little about tax reform.

Of course, cleaning up and simplifying a complicated tax code is important. But it is not, by any stretch of the imagination, a cure for widening inequality and declining economic mobility. This is the problem with the president’s approach to America’s big economic problems: His rhetoric seems way ahead of his policy proposals.

There are several reasons for that, including the complexity of the challenges at hand, the polarized political climate and the difficulty of crafting comprehensive solutions (let alone poll-tested ones). But the simplest explanation is that Obama’s economic team is built to tackle a totally different set of issues than the ones the president loves to talk about. It is built largely to address the problems of the federal budget deficit.

— Obama wants to tackle poverty and inequality. So why is his economic team so focused on the deficit?, Jim Tankersley, Washington Post, Jan. 25

One of my great disappointments, and a cause of utter dismay at times, of Obama’s first term was his near-total failure to bring into his administration really brilliant academics, and (apparently) to actually listen to the ones he did bring in. I remember back in early 2009 how happy I was that Obama was going to pursue major healthcare insurance reform, right at the outset, and I assumed that he would enlist the assistance of two or three of the most prominent academics who had extensive background related to healthcare financing. Which, in my opinion, meant, first and foremost, Uwe Reinhardt, the James Madison Professor of Political Economy at Princeton’s Economics and Public Affairs departments.

I sort of had this vision of Reinhardt and Gail Wilensky, the moderate Republican healthcare economist who had served as George H. W. Bush’s Medicare director, joining together at Obama’s request to draft a potential healthcare insurance bill.

Instead, of course, Obama left it up to Max Baucus and a few other members of Congress to draft a bill from scratch, and then failed to aggressively explain its contents and refute the massive campaign of disinformation about it. Sort of like his method of handling the stimulus legislation. Thus, the 2010 election results.

But healthcare costs and related issues are deeply entwined with economic and labor issues, and Reinhardt’s expertise is not limited to healthcare costs and delivery. He is not per se a labor economist, but he is per se brilliant and possessed of the ability to explain complex facts to the economics-and-healthcare-finance-challenged crowd. (Trust me on this.)

A huge difference between now and any time during the past four years is that, finally, suddenly, some mainstream journalists and pundits are joining Paul Krugman in awakening to the facts highlighted in the above indented excerpt by Jim Tankersley. In mainstream print journalism, it may still be just the editorial writers at the New York Times and economics correspondents at the Washington Post, but I’m betting that it’s about to gain real steam.

The Times editorial I’m referring to is in today’s paper, and argues:

In recent years, the administration and Congress have been consumed with deficit reduction, which is antithetical to job creation because it curbs government spending when the economy is weak. Unless Mr. Obama can shift policy away from premature austerity and toward ways to bolster demand and foster investment, job growth will remain sluggish and unemployment high.

What has been missing for years is a forceful labor agenda — one that calls for more jobs, but also has as its goal rising wages coupled with robust hiring.

Mr. Obama can take an important step in that direction by placing his next labor secretary at the center of his economic team. The first-term labor secretary, Hilda Solis, was largely sidelined, a reflection of the administration’s focus on the recovery of Wall Street, not Main Street. Some of the names that have been floated for the job — including Jennifer Granholm, the former governor of Michigan — show that Mr. Obama is seeking someone of high stature, but any secretary’s ability to be a transformative force will depend on the president’s support.

I agree that if Obama limits his options for this post to past or present politicians and people already, or recently, in government, then Granholm is an excellent choice. But I think it’s past time now for him to look elsewhere, to academia, to fill a post that has the potential to make a defining contribution to critical economic and labor policy.

I fear, of course, that Reinhardt is the wrong gender. Obama needs to place women in prominent positions in his administration, after all. And there may well be a terrific labor economist who is female; I wouldn’t know. But even more than placing women in prominent positions in his administration, he needs to place someone with a deep understanding of national and international labor and economics dynamics in a position of real influence and public exposure.