New economic face is still familiar
Saturday, September 11, 2010
President Obama named Austan Goolsbee to chair the White House Council of Economic Advisers on Friday, choosing one of his longest-serving confidants to help chart a course through a period of high unemployment and economic uncertainty.
Goolsbee, a centrist economist from the University of Chicago business school, was already a member of the council and has advised Obama since his first campaign for the U.S. Senate in 2004. His selection signals Obama's confidence in his economic team despite polls showing public dissatisfaction with the administration's handling of the worst economic crisis since the Great Depression.
In his opening statement at a wide-ranging White House news conference, Obama praised Goolsbee as "one of my good friends" and "one of the finest economists in the country."
"He's not just a brilliant economist. He's someone who has a deep appreciation of how the economy affects everyday people, and he talks about it in a way that's easily understood," Obama said. "He already knows and works with the rest of the team very well. I have complete confidence he's going to do an outstanding job as CEA chair."
Goolsbee succeeds Christina Romer, an economist from the University of California at Berkeley who last week returned to academia. At 41, Goolsbee is the youngest person to hold the post since the Johnson administration. And in a position better known for academic reserve, he is probably its first amateur stand-up comic.
Last fall - in the midst of the grueling legislative debate over health care - Goolsbee won D.C.'s Funniest Celebrity Contest after quipping that former Alaska governor Sarah Palin (R) is a "wingnut" and that the nation's biggest banks have been "bankrupting your grandma." Goolsbee also suggested on CNN that American International Group, the bailed-out insurance giant, should get a "Nobel Prize - for evil."
Goolsbee's public remarks are almost certain to become more guarded in the coming months as he assumes the helm of an agency charged with monitoring the economic horizon and analyzing the impact of potential White House initiatives. But his sharp sense of humor and knack for explaining complex issues in a clear and entertaining manner worked in his favor during the selection process, when he was widely viewed as an appealing spokesman for the president's policies.
With the departure of Romer and White House budget director Peter Orszag in July, Obama had an opportunity to remake his inner economic-policy circle. Instead, he has twice turned to administration insiders, choosing Goolsbee and Jack Lew, a deputy secretary of state and a budget director for President Bill Clinton, to replace Orszag. Lew is awaiting confirmation.
Rounding out the group that delivers a daily economic briefing to the president are Treasury Secretary Timothy F. Geithner and National Economic Council Director Lawrence H. Summers. Administration officials say they expect no further changes in that core group in the near future; Geithner has emerged as one of Obama's most trusted advisers while Summers, despite a sometimes prickly personality, is respected in the administration for his keen intelligence.
Like Romer, Goolsbee has at times had tense relations with Summers, including a widely reported battle over whether to bail out the auto industry; Goolsbee expressed doubts about the plan. But an administration official dismissed the blowup, and those who work with Goolsbee said there are no lingering ill feelings. "Anyone who doesn't fight with Larry probably doesn't deserve to have a job," joked the administration official, speaking on condition of anonymity to discuss internal relations.
Since his appointment to the council in January, Goolsbee has focused primarily on housing initiatives, the auto industry bailout and the overhaul of the nation's financial regulatory system, helping piece together the administration's legislation.
During the debate over that bill, Goolsbee was a leading supporter of a proposal to restrict the ability of big Wall Street firms to trade from their own accounts, an idea that Summers and Geithner opposed. Ultimately, Goolsbee persuaded the president to embrace the so-called "Volcker rule," named after its chief architect, former Federal Reserve chairman Paul A. Volcker. A version of the rule made it into the final bill signed into law by Obama this summer.
Goolsbee also worked with Volcker as chief economist of the president's Economic Recovery Advisory Board, which Volcker chairs. The board recently issued an exhaustive study of potential changes to the tax system.
Born in Waco, Tex., Goolsbee went to high school at the Milton Academy outside Boston, where he was a champion debater. He was also a national debate champion at Yale, where he earned his bachelor's and master's degrees. He received his PhD from the Massachusetts Institute of Technology and became a professor while still in his 20s in Chicago.
Goolsbee does not need congressional approval for his new post, since he has already been confirmed by the Senate to serve as a member of the Council of Economic Advisers. The third seat on the council is unlikely to be filled quickly, administration officials said.
Staff writer Brady Dennis contributed to this report.