Moody's Economist Has Become a Go-To Guy on Stimulus Plan
Tuesday, February 3, 2009
It's an open question whether the stimulus bill can lift the nation's ailing economy. But this much is certain: It's a bonanza for the career of Mark Zandi.
The 49-year-old economist is a Democratic dream, a former adviser to GOP presidential candidate John McCain who advocates spending over tax cuts as the best way to deliver a quick jolt. The founder of Moody's Economy.com now asserts that even if it reaches $900 billion, the current package may be too small. His PowerPoint presentations are a staple at congressional hearings. In floor speeches and news conferences, Democratic lawmakers confer on Zandi an authority once bestowed on Alan Greenspan, the former Federal Reserve chairman.
"I'm just saying what Mark Zandi from Moody's, an adviser to John McCain, is saying: You have to have a package of this robustness if you're going to make a difference," House Speaker Nancy Pelosi (D-Calif.) said at a recent news conference.
What distinguishes Zandi from other economists are the statistics he churns out. His widely cited "bang for the buck" chart shows, for example, that every $1 spent on food stamps will generate $1.73 in economic activity. He has outlined by industry the number of jobs the stimulus bill is likely to create, its effect on state unemployment rates and the impact of its various provisions on quarterly gross domestic product.
But his political pedigree has set him apart. Zandi is often grouped with Martin Feldstein, President Ronald Reagan's chief economist and another early advocate of a robust stimulus bill, to validate the package's crossover appeal.
"I think [he] is a Republican. I am pretty sure he is," Senate Majority Leader Harry M. Reid (D-Nev.) said of Zandi after a recent meeting. Sen. Charles E. Schumer (D-N.Y.) described Zandi on Fox News as a "conservative Republican." Defending the bill's sizable spending during a recent CNBC interview, Rep. Chris Van Hollen (D-Md.) responded: "I think if you listen to economists like Mark Zandi, who was the economic adviser to John McCain in the presidential election, he has said this is the right mix."
Democrats lost Feldstein on Thursday when the Harvard professor published a Washington Post op-ed declaring the House bill "an $800 billion mistake" laden with ineffective provisions.
Zandi is not exactly a convert to the cause. "I'm a registered Democrat," he acknowledged.
He signed up with McCain when Douglas Holtz-Eakin, the candidate's chief economic aide and a longtime friend, asked him to join the campaign's diverse economic advisory team. "My policy is I will help any policymaker who asks, whether they be a Republican or a Democrat," Zandi said. He declined to say whether he voted for McCain or Barack Obama in November. "My wife would also like to know the answer to that question," he noted.
Asked this week about his relationship with Zandi, McCain deflected with a clipped "I had many advisers."
Holtz-Eakin called Zandi "a good economist" and "an articulate and thoughtful presenter." He said Zandi was not a McCain policymaker but rather a rapid responder who provided McCain with instant analysis of economic news. Holtz-Eakin joked that the relationship was "a greater tribute to McCain's bipartisanship" than to Zandi's, because of the risk of relying on a Democrat for campaign advice.
Republicans respect Zandi but are growing annoyed by the false billing. When Democratic leaders announced a Friday-afternoon stimulus conference call with Zandi, Schumer and Sen. Jack Reed (D-R.I.), a senior GOP Senate aide complained by e-mail, "He's doing a press call with Schumer today and he's advising Democrats on this bill -- but he's always cited as a 'former McCain adviser' as if that means he's a Republican endorsing the Democratic proposal."