Cea History
The Council of Economic Advisers has released a history of the CEA on its' 70th anniversary, as Chapter vii of the Economic Report of the President. This slice is rattling interesting for economists interested inwards policy.
It's a prissy reminder on how much economical policy ideas convey changed. In the belatedly 1940s, when the CEA was laid up, financial policy was everything. Solow's increment model had non been invented, allow lonely Romer's. Monetary policy was a twinkle inwards Milton Friedman's eye. Adam Smith had to a greater extent than or less been forgotten. Economic policy was widely thought to consist of only setting the correct degree of financial stimulus, allow multipliers go their magic, to attain "full employment" in addition to economical growth. The slice tracks good the rediscovery of microeconomics in addition to regulation, every bit good every bit the shifts inwards macroeconomic thinking.
It reminds us how much the phase has changed. In the early on years in that place were actually no economists working elsewhere inwards government, in addition to in that place were no hollo back tanks. Now every means has a principal economist in addition to a staff, in addition to the CEA isn't (!) the only game inwards town for producing policy-oriented research. Its usage has changed every bit a consequence.
The CEA has long had many roles, adviser, figurer of numbers, cheerleader for the Administration's policies, spinner for the Lord's Day beak shows, in addition to interagency warrior.
One of its most of import in addition to to the lowest degree appreciated roles is only to halt empty-headed stuff.
Joe Stiglitz:
There has ever been a tension, how much the CEA is in that place to supply disinterested advice, in addition to how much it is in that place to cheerlead the Administration's policies, though many of those are at to the lowest degree express past times political considerations, if non downright driven exclusively past times politics. Just how much fourth dimension should the chair pass on Lord's Day beak shows spinning the latest numbers to demo how swell the Administration's policies are?
H5N1 large lesson is non to acquire an administrative agency:
But inaugurated past times the CEA, in that place has been a much to a greater extent than active participation past times academic economists inwards policy making. I hollo back policy is meliorate for it -- or at to the lowest degree non every bit catastrophically bad every bit it mightiness live otherwise -- in addition to and thus is academia. Academics are also taking over from bankers in addition to politicians at the Fed, amongst positive impact inwards my view. Marty Feldstein's box speaks to this number nicely.
H5N1 prissy summary:
If you lot acquire the chance, go.
An don't worry nigh politics. At the staff level, it's pretty a-political. In fact, working for an direction whose full general philosophy you lot disagree amongst would live goodness for you. (See Martin Feldstein's petty seek on this point. Quite a few of the Reagan-era staff were democrats.)
Update: "On Feb 11, the Hutchins Center on Fiscal in addition to Monetary Policy at Brookings marked this anniversary past times examining the ways the CEA in addition to other economists succeed in addition to neglect when they start out to advise elected politicians in addition to tap the expertise of about of the “exceptionally qualified” economists who convey chaired the Council over the past times 4 decades."
Video in addition to other links here. And hither is their photograph from the event, amongst many past times CEA chairs in addition to economists.
It's a prissy reminder on how much economical policy ideas convey changed. In the belatedly 1940s, when the CEA was laid up, financial policy was everything. Solow's increment model had non been invented, allow lonely Romer's. Monetary policy was a twinkle inwards Milton Friedman's eye. Adam Smith had to a greater extent than or less been forgotten. Economic policy was widely thought to consist of only setting the correct degree of financial stimulus, allow multipliers go their magic, to attain "full employment" in addition to economical growth. The slice tracks good the rediscovery of microeconomics in addition to regulation, every bit good every bit the shifts inwards macroeconomic thinking.
It reminds us how much the phase has changed. In the early on years in that place were actually no economists working elsewhere inwards government, in addition to in that place were no hollo back tanks. Now every means has a principal economist in addition to a staff, in addition to the CEA isn't (!) the only game inwards town for producing policy-oriented research. Its usage has changed every bit a consequence.
The CEA has long had many roles, adviser, figurer of numbers, cheerleader for the Administration's policies, spinner for the Lord's Day beak shows, in addition to interagency warrior.
One of its most of import in addition to to the lowest degree appreciated roles is only to halt empty-headed stuff.
Joe Stiglitz:
the coin saved from only 1 of the many bad projects the CEA had helped halt ... would convey been plenty to supply us amongst a permanent endowmentBen Bernanke, fifty-fifty better:
Economics is a highly sophisticated acre of thought that is superb at explaining to policymakers just why the choices they made inwards the past times were wrong. About the future, non in addition to thus much. However, careful economical analysis does convey 1 of import benefit, which is that it tin assistance kill ideas that are completely logically inconsistent or wildly at variance amongst the data. This insight covers at to the lowest degree ninety pct of proposed economical policies.Some examples
...the Heller Council argued against a proposal during the Kennedy Administration to usage nuclear explosives to widen the Panama Canal. In the Nixon Administration, CEA played a leading usage inwards the analysis that led to the determination that the authorities should non subsidize the evolution of a supersonic carry or SST plane, dubbed the “sure-to-be-subsidized transport” (Schultze 1996). Under President Ronald Reagan, CEA participated inwards a Gold Commission, which investigated the feasibility of returning to the gilded standard, in addition to ultimately advised against doing so.In my brief fourth dimension at CEA spell rattling immature I got to regard this usage upward close. There would live an interagency coming together on something similar tariffs in addition to quotas for goose down. Every other means would demo upward at a coming together all for it -- defense forcefulness wants to brand certain in that place are American suppliers of American goose downwardly from patriotic American Geese, in addition to thus our boys fighting the Russkies inwards Canada someday volition remain warm. The American Goose Down production board is screaming nigh unfair dumping from China. The Goose Feather Plucker's nuptials is all for it, along amongst the merchant marine -- nether the Jones Act, American geese must move on American made in addition to staffed ships. State is all for it too, in addition to thus long every bit nosotros tin carve an exception for special downwardly from Berlin. The Congressional liaison says the Congressman from the 1 county inwards the solid pose down that makes goose downwardly is screaming nigh it in addition to volition campaign all sorts of problem if nosotros don't exercise it. And in addition to thus on in addition to and thus forth. It was the CEAs lonely usage to stick upward for the pitiful consumer who mightiness desire a inexpensive warm jacket. (Note: I'm to a greater extent than ofttimes than non making all this upward every bit a composite of a large number of dissimilar cases.)
There has ever been a tension, how much the CEA is in that place to supply disinterested advice, in addition to how much it is in that place to cheerlead the Administration's policies, though many of those are at to the lowest degree express past times political considerations, if non downright driven exclusively past times politics. Just how much fourth dimension should the chair pass on Lord's Day beak shows spinning the latest numbers to demo how swell the Administration's policies are?
As many commentators in addition to old CEA chairs convey observed, in that place tin live a tension betwixt CEA’s duty to advance the President’s agenda in addition to its responsibleness to supply adept economical advice.Important: You can't live pure in addition to also effective:
CEA chairs in addition to members necessitate to live able to operate effectively within a political surround without it affecting the integrity of their economical advice.The Chapter offers goodness advice, coming from long experience:
Former CEA chairs, members, in addition to staff offering several specific pieces of advice every bit to how to successfully strike this balance: they advise that CEA should non publicly advocate for policies that are non supported past times economical analysis, in addition to that CEA should stick to giving economical advice, non political advice. CEA’s comparative payoff is economics,H5N1 old chair told me a swell story of offering a president political advice, only to live told "you stick to the economics, in addition to allow me exercise the politics."
H5N1 large lesson is non to acquire an administrative agency:
Others advise that the Council should non acquire likewise involved inwards policy coordination. ... One episode that illustrates this lesson occurred during the Johnson Administration, when CEA was responsible for the day-to-day direction of wage-price guideposts to combat inflation.
Stuart Eizenstat, President Carter’s domestic policy adviser, argues that “[t]he CEA cannot supply both detached, Olympian economical advice in addition to acquire enmeshed inwards the daily, inter-agency compromises in addition to political log-rolling” (1992).In 1993, President Clinton created a National Economic Council within the White House. It seemed to me a form of parallel CEA. Governments ofttimes don't cancel an agency, they only create a novel parallel one, in addition to allow the old 1 rot. The study handles this query carefully, but seems to suggest that the organisation is working, amongst the NEC allowing the CEA to exercise less political go in addition to meliorate economical work:
Since 1993, the National Economic Council has been responsible for coordinating economical policymaking. These arrangements convey largely served to augment CEA’s effectiveness past times permitting it to focus on providing economical advice in addition to analysis in addition to giving the Council greater exposure to the PresidentThe CEA is, rather unabashedly, the representative of the economic science profession inwards the government. The chapter covers it well.
The lastly usage of CEA is to engage amongst the economic science community, past times staying abreast of the latest academic enquiry in addition to past times sharing novel insights amongst policymakers, in addition to inwards turn, past times communicating the administration’s actions in addition to plans to the economic science community. This usage helps to back upward the administration’s efforts to develop economical policies in addition to to articulate in addition to advance the President’s agenda. While the academic grapheme of CEA may non convey been originally intended past times Congress when it created CEA, this engagement has arguably made the Council a to a greater extent than effective in addition to durable institution.I'm a petty leery of this paragraph. I hollo back the distance from enquiry to policy mightiness productively live a petty greater -- let's brand certain the latest enquiry is venture first. And the vision that the CEA is in that place to sell a political agenda to economists is a scrap frightening.
But inaugurated past times the CEA, in that place has been a much to a greater extent than active participation past times academic economists inwards policy making. I hollo back policy is meliorate for it -- or at to the lowest degree non every bit catastrophically bad every bit it mightiness live otherwise -- in addition to and thus is academia. Academics are also taking over from bankers in addition to politicians at the Fed, amongst positive impact inwards my view. Marty Feldstein's box speaks to this number nicely.
H5N1 prissy summary:
Many of CEA’s contributions are due to its unique institutional structure: that it is a modest organisation amongst no regulatory authorisation of its own, few instantly operational responsibilities, in addition to populated past times academic economists. Yet its contributions are also subject on the powerfulness of its staff to residual operating effectively inwards a necessarily political surround without existence overly influenced past times politics, in addition to to live effective inwards advocating for their positions spell providing objective economical advice. All inwards all, given the divergent objectives reflected inwards the Employment Act of 1946, CEA’s turbulent early on years, in addition to its odd institutional structure, CEA has proven to live a durable in addition to effective advocate for the world interest.H5N1 modest personal note: I got the lucky remove a opportunity to live a junior staff economist -- basically an RA -- spell I was inwards graduate school. It was a swell experience. I worked on a novel projection every ii weeks, largely nether Bill Poole. Unlike my academic training, nosotros speedily went from idea, to data, to study or memo in addition to on to the next. Bill taught me a lot. I saw quite a scrap of how policy is made. I learned that most of the people inwards Washington are actually smart, difficult working, informed, in addition to world spirited. It cured a lot of cynicism. And it got me to go on much meliorate ideas for my research, to pause out of the literature-driven the world 3d twelvemonth graduate students alive in, in addition to to brand certain my enquiry ideas thing to the larger world.
If you lot acquire the chance, go.
An don't worry nigh politics. At the staff level, it's pretty a-political. In fact, working for an direction whose full general philosophy you lot disagree amongst would live goodness for you. (See Martin Feldstein's petty seek on this point. Quite a few of the Reagan-era staff were democrats.)
Update: "On Feb 11, the Hutchins Center on Fiscal in addition to Monetary Policy at Brookings marked this anniversary past times examining the ways the CEA in addition to other economists succeed in addition to neglect when they start out to advise elected politicians in addition to tap the expertise of about of the “exceptionally qualified” economists who convey chaired the Council over the past times 4 decades."
Video in addition to other links here. And hither is their photograph from the event, amongst many past times CEA chairs in addition to economists.
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| Source: Brookings institution. |
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