Why Washington Should Miss Austan Goolsbee

Goolsbee: Back to school.
Alex Wong/Getty Images
Megan Mcardle, The Atlantic
Add to Briefcase
See more stories about...
Megan McArdle, The Atlantic
Aug. 11, 2011, 6:43 a.m.

Latest Polit­ics Posts:
Load­ing feed…

If you had known Aus­tan Gools­bee way back when, you might not have ex­pec­ted him to ever chair Pres­id­ent Obama’s Coun­cil of Eco­nom­ic Ad­visers. Even now, at 41, he still looks more like one of his M.B.A. stu­dents than like a pro­fess­or.

That ef­fect was even more pro­nounced at 35, when he first met Barack Obama, who was then a state le­gis­lat­or run­ning against Alan Keyes for a U.S. Sen­ate seat from Illinois. A mu­tu­al friend had sug­ges­ted that Gools­bee write some is­sue memos for Obama, but the two had nev­er met. When Gools­bee had a lengthy lunch with me re­cently at Found­ing Farm­ers, an eco-con­scious res­taur­ant in the headquar­ters of the In­ter­na­tion­al Mon­et­ary Fund, he re­called their first meet­ing, at a 2004 de­bate with Keyes. “You look noth­ing like a pro­fess­or,” said Obama, startled. “Where’s the beard and the tweed jack­et? And what’s with Gools­bee?”

Gools­bee chuckled. “”˜Hey, you’re not the only skinny guy with a funny name — as far as I’m con­cerned, you stole my bit.’”

By all ac­counts, this sort of thing has en­deared him to the pres­id­ent. Non­ethe­less, when he joined the Obama cam­paign, I had a shocked and faintly amused con­ver­sa­tion with an­oth­er eco­nom­ics journ­al­ist who knew the pro­fess­or fairly well. “Can you ima­gine Aus­tan in the White House? Aus­tan?“

It’s not that we thought he’d give bad ad­vice: rather the op­pos­ite, in fact. I’d known Gools­bee since 2001, first as my pro­fess­or at the Uni­versity of Chica­go, and then as an eco­nom­ist whom I in­ter­viewed. He was a sound eco­nom­ist, re­fresh­ingly in­de­pend­ent, and in­tel­lec­tu­ally hon­est. But those qual­it­ies seemed more like li­ab­il­it­ies than as­sets in Wash­ing­ton.

Our sus­pi­cions seemed to be con­firmed in Feb­ru­ary 2008, when a Ca­na­dian tele­vi­sion net­work re­por­ted that an Obama ad­viser, whom ABC later iden­ti­fied as Gools­bee, had told Ca­na­dian dip­lo­mats that Obama was step­ping up the rhet­or­ic on NAF­TA, and said, “It’s just cam­paign rhet­or­ic.”¦ It’s not ser­i­ous.” Every­one had already sus­pec­ted as much, of course, but Gools­bee seemed to have made the un-Wash­ing­to­ni­an mis­take of say­ing out loud what every­one else was un­com­fort­ably think­ing.

Gools­bee’s de­cision to step down in Au­gust after 11 months as head of the coun­cil (after join­ing it in March 2009) and re­turn to his pro­fess­or­ship in Chica­go was greeted by snip­ing and sniffs. One Fox on­line head­line crowed, “Obama’s Top Eco­nom­ic Ad­viser Jumps the Sink­ing Ship.” The Huff­ing­ton Post ar­gued that Gools­bee “has of­ten taken po­s­i­tions that have failed to carry the day, or he has rat­cheted down his pre­scrip­tions from the out­set.” Even The Eco­nom­ist, gen­er­ally a fan, ad­mit­ted: “Gools­bee’s ten­ure as chair­man has been a thank­less one.”

Thank­less, per­haps — but Gools­bee’s stature as Obama’s longest-serving eco­nom­ics ad­viser is in fact a fairly re­mark­able test­a­ment to him, and to his pres­id­ent. Christina Romer, the first per­son to chair Obama’s Coun­cil of Eco­nom­ic Ad­visers, had done ma­jor work on eco­nom­ic stim­u­lus and oth­er ques­tions that be­came very im­port­ant at the height of the crisis. Gools­bee’s con­tri­bu­tions are less ob­vi­ous — but that doesn’t mean they have been less im­port­ant. Pun­dits on the out­side may ask what spe­cif­ic ini­ti­at­ives he pushed, but that is not how Gools­bee de­scribes his po­s­i­tion. “I al­ways felt my role was like the pit crew in a Nas­car race and Pres­id­ent Obama was Dale Jr. — he’s driv­ing, and my job is to change the tires and get him back on the road.”

People who have worked with Gools­bee do not talk about the fierce policy battles that he waged; they praise his flair for ask­ing ques­tions that get at the heart of the mat­ter, his self-de­prec­at­ing hu­mor, his tal­ent for “dis­agree­ing without be­ing dis­agree­able,” and his com­mit­ment to mak­ing sure that the pres­id­ent un­der­stood all pos­sible angles be­fore he made a de­cision. “He’s got no agenda,” said Valer­ie Jar­rett, a seni­or ad­viser to Obama. “He’s re­spect­ful, but he tells the pres­id­ent ex­actly what he thinks, and he’s not shy about telling the oth­er mem­bers of the eco­nom­ic team what he thinks.” Of course, ad­visers are al­ways nice about oth­er ad­visers — on the re­cord. Then again, no one has ever tried to con­vince me, on the re­cord or off, that Larry Sum­mers didn’t have an agenda.

Wash­ing­ton wor­ships the policy war­ri­ors, the bril­liant mac­roe­co­nom­ic ma­nip­u­lat­ors who push through their agenda, us­ing canny ne­go­ti­ation or the sheer force of fiery will. But Wash­ing­ton also very much needs its policy mech­an­ics, the people who make sure that no mat­ter what de­cision the pres­id­ent makes, the wheels won’t come off.

“What you like about Aus­tan,” said Jeff Im­melt, the CEO of Gen­er­al Elec­tric, “is that he’s curi­ous; he asks good ques­tions; he listens. He also re­cog­nizes the lim­it­a­tions of what policy can do.” Im­melt worked with Gools­bee on the Pres­id­ent’s Eco­nom­ic Re­cov­ery Ad­vis­ory Board. “He’s “¦ a bril­liant guy who’s also dis­arm­ing. He’s su­per­smart but he doesn’t make you think he’s su­per­smart — he’s stealthy.” Dav­id Axel­rod, an­oth­er of Obama’s close ad­visers, also called Gools­bee “bril­liant,” but put it more vividly: “He al­ways sounds to me like the voice-over guy on a beer com­mer­cial.”

Blunt­ness, self-de­prec­a­tion, and a knack for ask­ing dif­fi­cult ques­tions: These are not ne­ces­sar­ily the weapons you need to win policy battles. But in an ad­viser, they can be stra­tegic as­sets that help a pres­id­ent win the policy war. The last ad­min­is­tra­tion had lots of policy war­ri­ors; it also had lots and lots of ter­rible mis­takes made by people who didn’t ask enough ques­tions. Pres­id­ent Obama cer­tainly knew Gools­bee well enough to un­der­stand what he was do­ing in el­ev­at­ing him to the coun­cil chair at the tender age of 41, mak­ing him the second-young­est per­son ever to hold the job. (The young­est was Ar­thur Ok­un, who served dur­ing the last year of the John­son ad­min­is­tra­tion, and was just 39 when he took the job.)

But per­haps I am pre­ju­diced, be­cause I have ex­per­i­enced Gools­bee’s stealthy bril­liance firsthand. In the winter of 2001, Gools­bee opened my tech­no­logy-strategy class by ask­ing, “Okay, now who likes the AOL—Time Warner mer­ger?” We all raised our hands. The $165 bil­lion megamer­ger had just closed, and the top-tier banks and con­sultan­cies we’d been in­ter­view­ing with had got­ten a piece of the deal. We’d be­come ex­pert at gen­er­at­ing nov­el reas­ons to love that messy ag­glom­er­a­tion of old me­dia and new.

Gools­bee was nod­ding, which made us feel smart. “Okay, why?”

Even the nor­mally shy stu­dents bubbled over with jus­ti­fic­a­tions, and for some minutes Gools­bee listened in­tently and wrote our an­swers on the white­board. By the time he was done, the list spanned sev­er­al columns, and AOL—Time Warner was be­gin­ning to sound like the best idea since the joint-stock com­pany. And then he sys­tem­at­ic­ally de­mol­ished every one of those reas­ons.

The carnage went on for an hour, un­til his bar­rage of calm and deadly ques­tions had de­flated dozens of M.B.A. egos suf­fi­ciently to make room for learn­ing. And then, gently, he star­ted show­ing us when mer­gers do work — deals that re­quire spe­cial­ized in­vest­ments, vari­ous sources of syn­ergy, in­dus­tries with large eco­nom­ies of scale. But the list of suc­cess­ful-mer­ger con­di­tions was short, and noth­ing on it soun­ded re­motely like AOL.

On May 28, 2009, Time Warner an­nounced that it was spin­ning off AOL after nearly a dec­ade of dis­mal per­form­ance, dur­ing which the com­bined com­pany’s stock had dropped from $161.40 a share a week after the deal closed to $23.55.

Gools­bee’s gift for ques­tion­ing the things that sound smart seems like an es­pe­cially help­ful qual­ity when you’re try­ing to ne­go­ti­ate the worst fin­an­cial crisis since the Great De­pres­sion and half of mac­roe­co­nom­ic the­ory is melt­ing down. Ac­cord­ing to Axel­rod, even when Romer was still at the helm, Gools­bee was “more than a mem­ber of the CEA, be­cause of his re­la­tion­ship with the pres­id­ent. The pres­id­ent would fre­quently ask for Aus­tan to be present at meet­ings, be­cause he wanted his judg­ment.”

A seni­or eco­nom­ic ad­viser for George W. Bush once told me a rather haunt­ing story about the ad­min­is­tra­tion’s de­cision to sign the 2002 farm bill, one that il­lus­trates why Obama might have liked hav­ing Gools­bee around. Like vir­tu­ally all sound eco­nom­ists, Bush’s ad­visers dis­liked the bill, a sub­sidy-laden mon­stros­ity that was con­sid­er­ably worse than the farm bill that had pre­ceded it in 1996 — but they re­luct­antly al­lowed it to go for­ward, be­cause they thought passing the farm bill would buy le­gis­lat­ive sup­port for something they con­sidered even more im­port­ant: the au­thor­ity the pres­id­ent needed to ad­vance the next round of treaty ne­go­ti­ations at the World Trade Or­gan­iz­a­tion.

As com­prom­ises go, this one didn’t seem too bad, so Bush’s ad­visers put on their game faces as the pres­id­ent signed it in­to law on May 13, 2002, with a touch­ing speech about provid­ing a safety net for farm­ers. All went well un­til later, when someone cracked a joke about how “we don’t need an­oth­er farm bill.” The pres­id­ent, shocked, de­man­ded an ex­plan­a­tion. “What’s wrong with the farm bill? No one told me to veto the farm bill.” The ad­viser wasn’t try­ing to hide the foot­ball, but had just as­sumed that Bush knew. So had every­one else. It was so ob­vi­ous to eco­nom­ists, no one thought to tell the pres­id­ent.

Herb Stein, who was head of the CEA when Nix­on im­posed far-reach­ing wage and price con­trols in 1971, once re­flec­ted on the blind­ness that can af­flict ad­visers — and hence, their pres­id­ents.

Even now, I am amazed to think of how little we looked ahead dur­ing that ex­cit­ing week­end at Camp Dav­id when we (the pres­id­ent, really) made those big de­cisions.”¦ Some people at Camp Dav­id had a the­ory of what we were do­ing with the ninety-day freeze.”¦ It was a rather flaky the­ory, and we were not pre­pared for the strong pos­sib­il­ity that it was wrong.

Nor was Nix­on. When the “tem­por­ary” 90-day con­trols had to be re­newed, Nix­on told Stein and George Shultz, “If this baby gets too strong we can strangle it in its cradle.” They couldn’t. Wage and price con­trols las­ted nearly three years, and much longer for oil and nat­ur­al gas. The oil and gas short­ages las­ted much longer too, in­to the early 1980s.

Gools­bee ap­par­ently al­ways re­membered to tell the pres­id­ent — even when do­ing so brought him in­to con­flict with oth­er mem­bers of the ad­min­is­tra­tion. Steve Rattner, the former “car czar,” de­scribes in his book a brief­ing where Sum­mers told the pres­id­ent that they’d de­cided to provide $5 bil­lion to sup­port auto sup­pli­ers while they made up their minds about a plan for the auto­makers. Sur­prised, Gools­bee im­me­di­ately broke in, even though he’d agreed he was just there to listen and not to speak:

“Mr. Pres­id­ent,” he in­ter­rup­ted, “just be aware that the second we an­nounce we’re go­ing to save the sup­pli­ers, every­body is go­ing to as­sume we’re sav­ing the auto com­pan­ies too. Have we really de­cided that?”

As soon as the meet­ing broke up, a furi­ous Sum­mers cornered Gools­bee in the hall­way and “ex­ploded”:

“You do not rel­it­ig­ate in front of the Pres­id­ent!”

“I was not lit­ig­at­ing in front of the pres­id­ent,” Aus­tan shot back. “He hasn’t seen that pro­gram and it has noth­ing to do with the fin­an­cial res­cue.”

In­side the White House, Gools­bee may voice his dis­agree­ments, but out­side he is loy­ally reti­cent, ac­know­ledging the dis­putes only ob­liquely even though they’ve been widely re­por­ted. “I al­ways think it is im­port­ant that the pres­id­ent hear the un­var­nished truth, as seen by the vari­ous po­s­i­tions,” he told me. “His­tory is not kind to ad­min­is­tra­tions where all any­one says is “˜Good idea, boss.’ So there were al­ways de­bates, but that was a sign of health.”

And though in private coun­cils he may have been dev­il’s ad­voc­ate in chief, in pub­lic he was simply ad­voc­ate in chief. Early on, he star­ted de­ploy­ing his for­mid­able ped­ago­gic tal­ents as the ad­min­is­tra­tion’s chief eco­nom­ic evan­gel­ist, in ven­ues ran­ging from the Sunday-morn­ing talk shows to You­Tube videos. He is ex­traordin­ar­ily per­suas­ive, on is­sues from small-busi­ness in­vest­ment to tax policy.

He was also very con­vin­cing when he was telling me dur­ing the cam­paign that the ad­min­is­tra­tion didn’t need an in­di­vidu­al man­date in its health-care plan — the op­pos­ite of what it is now ar­guing in court as it de­fends the 2010 health-care act from leg­al chal­lenges. “My goal in life is to be 80 per­cent Paul Vol­ck­er and 20 per­cent Muhammad Ali,” he told me. I’ve heard Re­pub­lic­ans privately com­plain that his present­a­tions are un­fair and one-sided, and the com­plaint is not en­tirely off-base. I have nev­er heard him say any­thing un­true, but like all ad­visers, he paints his ad­min­is­tra­tion’s policies in the best pos­sible light.

But really, people place ab­surd de­mands on aca­dem­ics who be­come polit­ic­al ad­visers: They want former pro­fess­ors to pub­licly cri­ti­cize their boss’s policies as if in an aca­dem­ic sem­in­ar. And they grouse if the politi­cians don’t make policy as if they, too, were liv­ing in­side a the­or­et­ic­al mod­el. This is not reas­on­able — and cri­ti­ciz­ing people who can’t meet this im­possible goal seems likely to di­min­ish the qual­ity of the ad­vice, not im­prove the qual­ity of the policy.

“There’s a cer­tain kind of aca­dem­ic that comes to Wash­ing­ton and can’t sur­vive,” Gools­bee said. “They’re the ones start­ing each sen­tence with “˜The eco­nom­ic mod­el says.”¦’ They are prone to sil­ver-bul­let-style an­swers, which demon­strate very soph­ist­ic­ated think­ing about the mod­el but very un­soph­ist­ic­ated think­ing about the real world.” The mod­el may be miss­ing a few things that are found in the real world — not least, the in­sti­tu­tion­al and polit­ic­al obstacles that make some prob­lems sil­ver-bul­let-proof. “If you’re go­ing to be an aca­dem­ic who’s in­volved in the world of policy, you have to be in­volved in the world that ex­ists,” Gools­bee told me. “I was al­ways a data guy, not a the­or­ist. The­or­ists can main­tain total pur­ity. The data are al­ways messy.”

Gools­bee ex­pects to take some heat for his ad­min­is­tra­tion’s ac­tions, and for his loy­alty, es­pe­cially be­cause he’s go­ing back to the Uni­versity of Chica­go — where a gradu­ate-school ap­plic­ant once said dur­ing an in­ter­view that he wanted to do pub­lic fin­ance and was told, “At Chica­go, we don’t con­sider that a field.” Gools­bee seems un­fazed by the pro­spect. “I have no doubt that there will be some heated ar­gu­ments in the sem­in­ar rooms and in the hall­ways. But in some sense, that’s why I want to get back to Chica­go. If you want to be re­peatedly told by your own al­lies, “˜Oh, yes, we are 100 per­cent right; those oth­er guys are crazy,’ then Wash­ing­ton is more for you.”

What We're Following See More »
Trump Places N. Korea Back on Terrorism List
0 minute ago

"President Trump plans to designate North Korea as a state sponsor of terrorism on Monday, years after the hermit nation was removed from the list during the George W. Bush administration. Speaking to members of his Cabinet, Trump said the designation "should have happened a long time ago." The White House expects the move to put further pressure on North Korean leader Kim Jong Un to abandon his nuclear and ballistic missile programs." Under the designation, North Korea will be subject to further penalties and sanctions.

Charles Manson Dead
6 hours ago

Manson "died Sunday of natural causes, according to the California Department of Corrections. He was 83. ...Manson served nine life terms in California prisons and was denied parole 12 times."

Mueller Seeks Documents from DOJ
15 hours ago

Special counsel Robert Mueller "is now demanding documents from the department overseeing his investigation." A source tells ABC News that "Mueller's investigators are keen to obtain emails related to the firing of FBI Director James Comey and the earlier decision of Attorney General Jeff Sessions to recuse himself from the entire matter."

Trump May Be OK with Dropping Mandate Repeal
16 hours ago

"President Donald Trump would not insist on including repeal of an Obama-era health insurance mandate in a bill intended to enact the biggest overhaul of the tax code since the 1980s, a senior White House aide said on Sunday. The version of tax legislation put forward by Senate Republican leaders would remove a requirement in former President Barack Obama’s signature healthcare law that taxes Americans who decline to buy health insurance."

Media Devoting More Resources to Lawmakers’ Sexual Misconduct
16 hours ago

"Members of Congress with histories of mistreating women should be extremely nervous. Major outlets, including CNN, are dedicating substantial newsroom resources to investigating sexual harassment allegations against numerous lawmakers. A Republican source told me he's gotten calls from well-known D.C. reporters who are gathering stories about sleazy members."


Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.