Obama's Centrist Economic Team
Pro-free trade and pro-Wal-Mart are not enough.
Aug 4, 2008, Vol. 13, No. 44 • By CESAR CONDA
With such fans, it's not surprising that Furman and Goolsbee's roles on the Obama campaign are generating quite a bit of angst on the left. Lori Wallach of Public Citizen told the Los Angeles Times: "Furman seems like a liability, given his anti-worker writings and statements about Wal-Mart, fair trade and other middle-class issues." In that same article, Marco Trbovich of the United Steelworkers said: "[Furman] is a very bright fellow, but he is an unalloyed cheerleader for the trade policies that have been very destructive to manufacturing jobs in this country." In an article in the Nation about both Furman and Goolsbee, entitled "Obama's Chicago Boys," Naomi Klein wrote: "But before Obama can purge Washington of the scourge of Friedmanism, he has some ideological housecleaning of his own to do."
But how much comfort can conservatives take from Obama having such "reasonable" economic advisers? There is certainly no question that an Obama administration is a frightening prospect for free-market advocates. This self-described "free market guy" has said he opposes the Central American Free Trade Agreement (CAFTA) and will reopen the North American Free Trade Agreement (NAFTA). He would sign legislation raising the minimum wage and ending secret balloting for workers deciding on unionization. He would require employers to pay for health insurance for their workers, mandate coverage for all children, and expand Medicaid and other government programs. He wants higher fuel-economy standards for new cars and trucks, power companies to produce some of their electricity from solar and renewable sources, and federal ethanol mandates.
Furman and Goolsbee are obviously in agreement with much of this agenda, and both have been strong advocates of progressive taxation. Goolsbee, in particular, has taken direct aim at the conservative movement's biggest economic policy achievement of the past three decades: the sharp reduction in marginal tax rates, especially the top personal income tax rate. He is a leader in the liberal onslaught against the Laffer Curve, producing research to show that income tax cuts "for high-income taxpayers likely gave windfalls to those whose incomes were already sharply rising because of broader market forces."
And, while both Furman and Goolsbee purport to believe in free trade, they seem to have no trouble working for a candidate with a pronounced and public protectionist bent. Obama's promise to reopen NAFTA alone should cause any degree of free-market economist pause. The facts about NAFTA's benefits are unassailable: Since its enactment in 1993 through 2001, U.S. employment increased from 120 million to 135 million. Jason Furman should certainly know the benefits of NAFTA inside and out; he served as a special economic assistant to President Bill Clinton, for whom the passage of NAFTA was a major political victory in 1993. That Furman and Goolsbee have suspended their belief in free trade does not bode well for how hard they would fight protectionism in an Obama White House.
The next president and his economic team will face enormous challenges--from managing the decline in the housing market to stabilizing the U.S. dollar and reducing energy prices. Furman and Goolsbee will be at the elbow of a President Obama, if there is one. To date, they have shown little appetite for fighting for free-market views and appear perfectly comfortable working for a candidate who is running on a statist platform of protectionism and bigger government.
Cesar Conda was an assistant for domestic policy to Vice President Cheney and a senior policy adviser to Mitt Romney during his presidential bid.