Meet the Economic Advisors For the Presidential Candidates

The New York Times has a good story on the economic advisors for the presidential campaigns. It is important to follow this people. They will be setting economic policy if their candidate is elected.

John McCain is being advised by former Congressional Budget Office head Douglas Holtz-Eakin. He also was an economic advisor for George W. Bush. Holtz-Eaken developed a decent nonpartisan reputation while at the CBO.

Barack Obama has University of Chicago economics professor Austan Goolsbee on his campaign. He has written for Slate and the New York Times. Check out his piece on pharmaceutical companies rigging Medicare for a financial windfall.

Economists Mark Duggan at the University of Maryland and Fiona Scott Morton at Yale studied the prices of the top 200 drugs in the United States from 1997 to 2002. They found that drug makers gamed the government procurement rules that forbid companies from billing Medicaid more for a drug than they bill private consumers. When private-sector demand for a drug is small compared with the demand of Medicaid patients (as is the case, for example, with antipsychotics), drug companies massively inflate the price of the drug for private buyers. Sure, they lose some business from that part of the market. But they more than make up for that loss by being able to bill the government at a vastly higher price for the Medicaid patients. Similarly, as the Wall Street Journal reported last week, some drug makers are donating money to charities that help patients make their co-pays for expensive drugs. The donations help ensure that the patients will be able to keep taking the drugs—and also keep the official prices high when the bill goes out to insurance companies.

Hillary Clinton has former Deputy Treasury Secretary Roger Altman and former National Economic Adviser Gene Sperling. Both are longtime members of the Clinton inner-circle.

Rudy Giuliani is being by Hoover Institution senior fellow and Stanford University economics professor Michael Boskin. He has worked for the Exxon Mobil Corporation. To say that he is not a Trotsky would be an understatement.

Mitt Romney is being advised by my least favorite economist: Gregory Mankiw. Wikipedia has a good rundown on how insensitive he is to working people.

Several controversies arose from CEA's February 2004 Economic Report of the President.[2] In a press conference, Mankiw spoke of the gains from free trade, noting that outsourcing of jobs by U.S. companies is "probably a plus for the economy in the long run."[3][4] While this reflected mainstream economic analysis, it was criticized by many people who drew a link between outsourcing and the still-slow recovery of the U.S. labor market in early 2004. The White House economic forecast contained in the report was criticized for being overly optimistic about job gains--and indeed, job growth turned out to be slower than the Administration forecast.

Controversy also arose from a rhetorical question posed by the report (and repeated by Mankiw in a speech [5] about the report): "when a fast-food restaurant sells a hamburger, is it providing a service or combining inputs to manufacture a product?" The intended point was that the distinction between manufacturing and service industry is somewhat arbitrary and therefore a poor basis for policy. Even though the issue was not raised in the report, a news account [6] led to criticism that the Administration was seeking to cover up jobless losses in manufacturing by redefining jobs such as flipping hamburgers as manufacturing.

What a sweetheart.