Thursday, October 09, 2008

Doug Holtz-Eakin, your thesis advisor is calling

His latest public statement was to the effect that Obama opposes the new McCain bailout plan because Obama just wants to help Wall Street, not Main Street.

Doug, did anyone tell you that the McCain plan is a direct pay to Wall Street, giving them face value rather than just market value for bad mortgages? Indeed, isn't it partly your plan? (I'd assume you helped draft it.)

Insert joke of choice here about Doug's earlier claim that McCain deserves credit for inventing the Blackberry.

This is a bit of a sensitive topic for me, because if McCain wins the election I will be praying that Doug gets to exert some influence on economic policy. After all, the alternatives in setting a McCain Administration's economic policy are presumably Steve Schmidt and Phil Gramm.

But O for the days when, say, Glenn Hubbard could represent an Administration with absymal budgetary policies and yet carefully avoid saying anything in public that was definitively false.

I recall, for example, Glenn's artistry (pointed out, almost but not quite with rueful admiration, in a blog entry by Brad DeLong many years back) when asked whether Bush's unending budget deficits would eventually raise interest rates. Option (a) would have been to admit that this was true. Glenn didn't want to do that. Option (b) would have been to lie and say it was false. Glenn didn't want to do that either. Option (c) was gracefully, almost imperceptibly (if you weren't watching carefully) to re-phrase the question as whether one or two years of budget deficits should be expected to raise interest rates. Then you could confidently and correctly say: No, as a matter of accepted economics that is incorrect. And that was what Glenn did.

I personally would not be comfortable spinning even to that degree, which is one reason why I do not thirst for public life, and thus would reject any offered post be it in a campaign or the government post-election. But if you do it that way you preserve a lot more of your academic reputation. Doug ought to take note, but I fear it's too late.

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