Home > Revolving-Door Economists > Policy intellectuals and the state

Policy intellectuals and the state

from David Ruccio

Andrew Bacevich begins his review of Christian Appy’s new book, American Reckoning: The Vietnam War and Our National Identity, with the following:

Policy intellectuals — eggheads presuming to instruct the mere mortals who actually run for office — are a blight on the republic. Like some invasive species, they infest present-day Washington, where their presence strangles common sense and has brought to the verge of extinction the simple ability to perceive reality. A benign appearance — well-dressed types testifying before Congress, pontificating in print and on TV, or even filling key positions in the executive branch — belies a malign impact. They are like Asian carp let loose in the Great Lakes.

Appy’s examples include, in the area of national security, Cold Warriors McGeorge Bundy, Walt Whitman Rostow, and Samuel P. Huntington. Bacevich then extends the analysis to the new foreign policy intellectual establishment associated with Ashton Carter in his return to the Pentagon as President Obama’s fourth secretary of defense.

I wonder if we might use the same kind of analysis to examine Obama’s economic team, especially the first group of economic advisers. They included Treasury Secretary Timothy Geithner (whose “counselors” included Lewis Alexander, Gene Sperling, and Lael Brainard), National Economic Council Director Lawrence Summers, Deputy Director of the National Economic Council (and now Chairperson of the Council of Economic Advisers) Jason Furman, and others. In Obama’s case, the members of the economics “Brains Trust” weren’t from Yale but had close associations with Robert Rubin, the former co-chairman of Goldman Sachs who served as Treasury secretary under Bill Clinton.

As Matt Taibbi wrote back in 2009,

The significance of all of these appointments isn’t that the Wall Street types are now in a position to provide direct favors to their former employers. It’s that, with one or two exceptions, they collectively offer a microcosm of what the Democratic Party has come to stand for in the 21st century. Virtually all of the Rubinites brought in to manage the economy under Obama share the same fundamental political philosophy carefully articulated for years by the Hamilton Project: Expand the safety net to protect the poor, but let Wall Street do whatever it wants. “Bob Rubin, these guys, they’re classic limousine liberals,” says David Sirota, a former Democratic strategist. “These are basically people who have made shitloads of money in the speculative economy, but they want to call themselves good Democrats because they’re willing to give a little more to the poor. That’s the model for this Democratic Party: Let the rich do their thing, but give a fraction more to everyone else.”

And that’s exactly what we got: save Wall Street and expand the safety net for the poor. What we didn’t get is creative thinking about the major banks (which, had they been nationalized, could have easily played an important role in a real economic recovery) or international trade (which, in the case of NAFTA, was never renegotiated, and in the case of the TPP, has been all about extending the reach of major corporations) or workers (who would have benefited from Card Check and other measures to make it easier to organize unions and, even more, play a role in running the enterprises in which they work or set up their own enterprises) or healthcare (which was reformed in such a way that, while health insurance was expanded, it did not change the way healthcare itself is provided), and so much more.

So, like the Cold War national security advisers and the new Pentagon team, Obama’s economic advisers restricted the discussion and let “Washington’s clubby network of fellows, senior fellows, and distinguished fellows” know that the “prevailing verities” of economic discourse “would remain sacrosanct.” They chose not to look at a different economic problem, much less reverse the existing economic paradigm. Instead, they affirmed it—with a little minor tweaking here and there.

One can only imagine what economic policy would have been like had the country’s economic policy not been in the hands of state intellectuals, who devised policies for the benefit of a few, but had actually been creatively and critically devised by intellectuals from the working classes who continue to be ravaged by the crash of 2007-08 and the lopsided recovery of the last six years.

  1. blocke
    March 11, 2015 at 2:53 pm

    Shut up about the Democrats. Obama was a totally inexperienced man when he entered the White House but the really bad guys in the scenario are the Republicans who dominate the legislature and the Supreme Court. What sort of program do you think Obama could get through, even if he did have any clear ideas. You fellows engage in what the French call la politique de pire, (helping your worst enemies because you hate their enemies even more, despite the fact that they are closer to you.) This is the sort of stuff that divided the left in the 1930s and brought Hitler too power.

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