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Former Bush adviser lauds Obama's economic team

11/25/2008

Jan Dennis, Business & Law Editor
217-333-0568; jdennis@illinois.edu

Brown
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Photo by L. Brian Stauffer
Finance professor Jeffrey R. Brown says President-elect Barack Obama “clearly hit the ball out of the park” with his economic team.

CHAMPAIGN, Ill. — A former economic adviser for President Bush and John McCain threw bipartisan support to the economic team assembled by President-elect Barack Obama to help lead the U.S. out of its deepest financial crisis since the Great Depression.

University of Illinois finance professor Jeffrey R. Brown says Obama “clearly hit the ball out of the park” by nominating a team led by Timothy Geithner as treasury secretary, Lawrence Summers as the head of the National Economic Council, Christina Romer as the chair of the Council of Economic Advisers and Peter Orszag as the director of the Office of Management and Budget.

“This is clearly a first-class economic team, comprised of some of the best and brightest economists of our day,” said Brown, a senior economist with the President’s Council of Economic Advisers in 2001-2002 and an economic adviser for McCain’s presidential campaign.

Brown has worked closely with Orszag, who would head a White House office that writes and helps sell the president’s annual budget plan and also serves as a funnel for federal agency budget requests.

“Peter Orszag is, without question, the leading authority on federal budget issues of our generation,” Brown said. “He has served as the director of the Congressional Budget Office for the past two years, and has thus been deeply involved in every economic issue coming before Congress. From personal experience, I can tell you that he is brilliant.”

Orszag and Brown co-wrote a 2006 paper on hedging risks in pensions and annuities, and worked together on projects focused on pensions and Social Security for the National Academy of Social Insurance and the Aspen Institute.

Brown also has worked closely with Austan Goolsbee, who Obama has named chief economist for a special economics advisory board that will be headed by former Federal Reserve Chairman Paul Volcker. Goolsbee and Brown met in graduate school at MIT in the mid-1990s, and co-wrote a 2002 paper that provided some of the first empirical evidence that price shopping on the Internet lowered consumer costs.

“Austan is one of the smartest, most talented and most respected economists of his generation,” Brown said. “He has not served in any prior administration, and thus he would bring a fresh perspective, new ideas and an incredibly high energy level to the new administration.”

Brown, the director of the Center on Business and Public Policy in the U. of I. College of Business, says he has sometimes differed with Orszag, Goolsbee and other Obama economists on policy issues, including tax policy and Social Security reform.

He says Obama’s economic team will likely advocate an activist government that wields its power to influence markets, particularly in times of economic crisis. Brown prefers to rely on market solutions whenever possible, with government intervention only when there are clear market failures the government has the ability to correct.

“These differences are important, and I fully expect I will disagree with them on several important policy questions over the next four years,” Brown said. “Despite those differences, I can say without any doubt or reservation that this is one of the most intelligent and talented economic teams ever assembled.”

Editor’s note: To contact Jeffrey R. Brown, call 217-333-3322; e-mail brownjr@illinois.edu.