Obamanomics

Tyler Cowen posted an article about his initial impressions of Obama's economic policies, written when Obama was still a candidate for President.

My view of Obama’s economics is a simple and straightforward one and it is consistent with his public pronouncements. I view him as an economic pragmatist who is willing to borrow good ideas from many sources. He stands further to the left than do most Americans (myself included) but he has lined up the very best economic talent to advise him.

KRM here: I agree that Obama is a pragmatist, but I disagree with his assessment that he's surrounded himself with the best talent to advise him. Tim Geithner is undeniably intelligent and charismatic, but I wouldn't classify him as the best talent available. Robert Schiller would have been better. He predicted the crisis, rather than participated in its creation, as Geithner did. Similarly, Ben Bernanke is extraordinary, but he was fatuous in the face of all signs that a housing crisis was blowing up around him. Similarly, Austan Goolsbee, current head of economic advisers, has more talent and personality than you'd ever need. But he was an apologist for the garbage loans that lead to the crisis. None of these men have been held accountable, which means that they're unlikely to change their practices.

Ultimately, the question is how do you pick the best talent. Obama chose conventionally. Perhaps pragmatically. He chose a lukewarm path and a continualist regime. It's no surprise that we should get a lukewarm recovery spurred on by continuing the same risky practices that got us into this mess (extend credit, repackage losses, change the balance sheet location of losses, reposition private losses onto public balance sheet).

Another compelling point by Cowen:

Obama is also famously detached and it seems he never loses his cool. He does not drink up ideology like a drug but instead is focused on creating his own personal success. That implies a very strong ego but also again a economic and also a foreign policy pragmatism, in the good sense. If Obama is elected, I expect the major economic storyline to be Obama pushing policies in the national interest (as he perceives it) and Congress pushing back with earmarked expenditures and special privileges for interest groups.

KRM here: I think Cowen got this one exactly right. Obama's administration has been one of him presenting new policy ideas and getting blasted for it. Obama has spent a lifetime of energy cultivating a record and image of near perfection. He wasn't willing to go out and put himself on the line and take any one risk that was going to endanger that. It's hard to blame him for that, I suppose. But I can't say that I really feel inclined to praise him for it, either.