Bloomberg's Hans Nichols, who often ends up being right about these things, says that Alan Krueger, chair of the White House's Council of Economic Advisers, is heading back to Princeton, and Jason Furman, the deputy director of the National Economics Council, will be replacing him.
Whether this is exactly the right choice or an example of everything that's wrong with the White House economic team depends on what you think the CEA chair should be doing, and what you think of the White House's broader theory of personnel.
Typically, the Council of Economic Advisers is the place where top economists go to influence policy. A list of past chairs includes Marty Feldstein, Joe Stiglitz, Greg Mankiw, Ben Bernanke and Christina Romer. It's meant to be a redoubt of academic expertise among the politicized information and partisan nonsense of Washington. But that can be both a blessing and a curse. The emphasis on academics often means the CEA is led by very smart people who have no idea how to get anything done in Washington.
Furman is a bit of a hybrid choice. His economics PhD is from Harvard, and he came to Washington when future-Nobelist Joe Stiglitz tapped him to help out in the Clinton administration. But he's pretty much been in Washington since the 90s. He's worked in the CEA, World Bank and the National Economics Council. He's been at the Brookings Institute as well as the Center on Budget and Policy Priorities. He was part of John Kerry's 2004 presidential campaign as well as President Obama's 2008 campaign. He's spent much longer as a professional political staffer than as an academic economist.
The question is whether that should be seen as qualifying or disqualifying. Furman unquestionably knows how to get things done in Washington. Under his leadership, the CEA will very much have a voice in the White House. But he's not an outside economist who can lend a fresh perspective on American politics. He's a longtime political staffer with a PhD in economics. His appointment ensures the CEA will be relevant, but it arguably comes at the cost of what makes the CEA unique.
Harvard's Greg Mankiw, who served as CEA chief under George W. Bush, thinks the tradeoff makes sense. "If true, that is great news," he writes. "Jason is smart, knowledgeable, and sensible. He does not come to the job with as long an academic track record as other recent picks, but he has far more policy-relevant experience and expertise."
Furman's appointment speaks to a broader trend in President Obama's approach to economic appointments in his second term: He's less interested in outside voices than in assembling a team that runs smoothly, knows how to work well together and knows how to get things done in Washington.
The view in the Obama administration is that the constant calls to bring change and fresh perspective to the president's top staff is ridiculous. No Fortune 500 company constantly faces demands to appoint outsiders to the top positions simply because they're outsiders. In the private sector, it's understood that it takes time to find and train the right people for positions, and it's understood that that experience inside the company, on the job, and with the leadership team is valuable. The White House, they think, should be run the same way. And so that's how they're running it.