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Krueger's resume: VATs, clunkers, minimum wages. AP View Enlarged Image
Economics: Just a week before he unveils a new, improved jobs plan, President Obama has named a new person to be his top economic adviser, Princeton University's Alan Krueger. This doesn't bode well for job creation.
Krueger, a labor economist, is no obscure academic. Though youngish at 50, he's been around for decades, most recently spending two years in Obama's Treasury Department. And in the 1990s, he served a stint as Bill Clinton's chief labor economist.
By naming him to the chairmanship of the president's Council of Economic Advisers, replacing the departed Austan Goolsbee, Obama is sending a strong signal to the business world, Wall Street and the rest of America: expect little in the way of major economic policy shifts.
Or in other words: if you don't like the White House status quo, tough.
Krueger's a known quantity. While serving as Treasury's chief economist in 2009 and 2010, he analyzed several programs, including giving employers tax incentives to hire, "Cash for Clunkers," the Small Business Lending Fund and "Build America" muni bonds.
The economy is still a shambles. None of these programs has worked very well. Was Krueger at Treasury telling the White House these were bad ideas? Nothing we know of suggests that's the case.
Going further back, Krueger was co-author of a major 1992 study that posited rises in minimum wage could lead to more hiring. Try telling that to black youth, who suffer a 40% unemployment rate largely because the minimum wage has priced them out of the job market.
Common sense should tell you that when you tax something, you get less of it — not more. Krueger's study was roundly criticized and debunked.
As such, with joblessness remaining stubbornly above 9%, we're not optimistic about Krueger's input into Obama's coming Jobs Program.
Still more recently, Krueger popped up as an advocate for a value-added tax (VAT) or, as some call it, a consumption tax. Nothing wrong with that, per se, unless you're pushing it not as a replacement for our current dysfunctional income-tax code, but as an addition to it.
But that's exactly what Krueger did, although to his credit he did write in a January 2009 New York Times piece that "the main downside of this proposal is that taxes reduce economic activity."
Darn right. Not only that, but unless you get rid of the income tax entirely when you impose a consumption tax, you end up with an overtaxed, stagnant mess. Don't think so? Look at Europe, where citizens are hit with both income tax and a VAT, and the two just keep marching higher.
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Posted By: Fargo Vortac(1335) on 8/30/2011 | 1:37 AM ET
@Ellman - I disagree; these "intellectuals" need to be taught in schools, as failed. We need to learn from history to avoid repeating it. Unfortunately, some people seem to miss the point, like the 0.
Posted By: Ellman(1510) on 8/30/2011 | 12:14 AM ET
Two giant intellectuals that have had a deletirious influence on economic growth and political freedom are Karl Marx and A. Keynes. Marx's legacy is millions of dead people and Keynes' is wrecked or stagnant economies. The teachings of these two intellectuals should be banned from all schools. Then we'd make some genuine progress.
Posted By: cupcake(160) on 8/29/2011 | 10:43 PM ET
Well, this is disappointing news, but not surprising Tsk, such a pity so many voted for Oblamer in the first place but this is just a slap in the face.
Posted By: bobbygordon(6515) on 8/29/2011 | 9:11 PM ET
Like the rest of 'em his only qualifications are his height, his swarthy good looks and his prematurely grey hair. ... We await you resignation letter Mr. President.
Posted By: Eu Jen Ek(75) on 8/29/2011 | 8:42 PM ET
This will mean two more years of failed Keynesian ideas from the White House. So for those millions of job seekers out there, you are out of luck, for new jobs will be few. For those who still have a job, work hard, and pray that you still have a job for another two years.
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