It comes as no surprise to learn that Barack Obama's top economic adviser is resigning.
That's good news, because whatever it says about the current state of the American economy, it indicates that results still matter in what has been and should remain a results-oriented society. If a policy isn't working, it needs to go. So does the policymaker. And last week he went.
The bad news is that Austan Goolsbee won't be taking his economic policies with him. The shorthand for those failing policies is demand-side economics.
But they've failed to fully revive demand. Or the American economy.
Austan Goolsbee -- what a great name for a mortician or any practitioner of the dismal science, aka economics. The economy's tepid state really shouldn't surprise. Emphasize spending over saving, taxing over producing, borrowing over saving, and this is the economy that results. Its features are as undeniable as they are unattractive: record debt, under-investment and high unemployment.
Malaise is back, to borrow a term from the last time such policies were tried: the Carter Era. Oh, for a Ronald Reagan to revive us again! And give us a New Beginning.
Professor Goolsbee is headed back to a (tenured, of course) position at the University of Chicago. One can scarcely blame him. The abstract theories of academe are so much easier to deal with than the realities of an actual economy.
Out here in the real world, it's not the professor but the economy that hands out the grades, and Professor Goolsbee earned a solid F. Far from having all the answers, he may not even have had the right questions. For example: Why should a government already over its head in debt choose to borrow still more, even if it has to raise the legal debt limit to do so?
But there is no limit to the certainty of experts even as their knowledge proves uncertain. No wonder Professor Goolsbee would choose the sheltered groves of academe rather than risk the hazards of a free market in ideas.
Our president assures us that the economy is just experiencing some bumps in the road. But as each new report on the economy arrives, those bumps are assuming Himalayan proportions, especially the latest estimates of the national debt. At this rate, it will soon exceed the Gross Domestic Product, a level of debt as rare as it is disturbing. It's happened before -- maybe twice in the past 100 years -- but that doesn't make it any less worrisome.
What, Barack Obama worry? Prosperity is just around the corner and the economy is fundamentally sound, as Herbert Hoover would say, and did. There's a short word for this president's general view of the economy's current troubles: Denial. Which is the surest sign of a president who's losing touch. But maybe he hasn't been practicing economics all along, just ideology. His ideology is a variant of the all too familiar social-democratic brand practiced in Europe, where it is producing much the same dismaying results: high debt and low growth.
As his re-election campaign begins, Mr. Obama may indeed pay lip service to the copybook maxims -- neither borrower not lender be, and all that -- but who can believe him when he mouths the old wisdom? The faith he's really holding on to is a faith in his own infallibility. No matter the results. He seems oblivious to them. With this president, nothing succeeds like failure.
A physician might diagnose the trouble with the American economy as a failure to thrive, and Dr. Obama's prescriptions for it may have only hastened its decline. It may be too much to hope that he will reverse course at this late date, and prescribe a good leaving-alone. Maybe even a strict diet when it comes to consuming, taxing and borrowing ever more. But that's not very likely. Powerful thing, inertia.
Austan Goolsbee isn't the only economic adviser to have bailed out on this administration: Christina Romer, who chaired the president's council of economic advisers; Larry Summers, former director of the National Economic Council, who went back to Harvard; and Peter Orszag, who quit as director of Management and Budget. None of them will be missed.
Timothy Geithner, secretary of the treasury and patron saint of selective government bailouts, is still going strong. Or rather weak. Much like the economy itself.
Every time some certified expert explains how we can plan our way out of this economic miasma, the name Friedrich Hayek comes to mind. He was the Austrian economist and thinker in general who had the good sense to get out of Austria after the Nazi Anschluss in 1938 and head for points west -- first England and then America. His prescient classic, "The Road to Serfdom," remains all too relevant whenever the economic planners tell us they know better than the market and all the bothersome little people who determine it by their millions of individual decisions.
Hayek summed up his opinion of such expertise in a single, pithy sentence:
"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."
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