- Economists disagree about policy all the time, but almost always in good faith.
- White House economists have traditionally sought advice of both Democratic and Republican colleagues.
- That’s why the absurd Pandemic Protocol model created by Trump’s White House economists is so egregious and clearly partisan.
- Simon W. Bowmaker is Clinical Professor of Economics at the Stern School of Business, New York University. Paul Wachtel is Professor of Economics at the Stern School of Business, New York University.
- This is an opinion column. The thoughts expressed are those of the author.
- Visit Business Insider’s homepage for more stories.
Economists like to think of themselves as scientists in search of a single truth. But, dispute and debate are more the rule than the exception.
Some were convinced that Fed policy of quantitative easing after the financial crisis would lead to high inflation; it did not. Some were convinced that the Trump tax cuts in 2017 would pay for themselves because economic growth would generate new revenue; it did not, our deficits were rising before we were hit with COVID-19.
Since the New Deal brought economists to Washington, they have become a pervasive presence in policy discussions and the divide between policy advice in Republican and Democratic administrations is often wide.
However, beyond the policy divide lies a common framework for analyzing the world that until now has spanned the partisan divide. Economics may not be a science but it shares a respect for analytical frameworks, disciplined thinking, and investigations of the facts. Doing economics is not Democratic or Republican which is precisely why the profession had much to add to policy discourse in the past.
But in the midst of the Pandemic Protocol pandemic, it seems as if the nonpartisan nature of economic analysis has been abandoned.
Injecting politics into economics
Reflecting on his Washington experiences for a recent book, When the President Calls, Stanford professor Michael Boskin, the Chair of the Council of Economic Advisers (CEA) for President George HW Bush said that when he took the job he made sure to open his phone line to economists and former CEA chairs from either side of the aisle.
“I made a point of calling not just Republicans but also Democrats like Charlie Schultze, which was very useful,” Boskin recalled.
The Council serves the president but over 74 years it has developed an institutional culture and reputation that prioritized economics over politics. Economists at the CEA offered clear-eyed advice, they didn’t fit or smooth their models to achieve a desired policy goal.
For the same book, Kevin Hassett, a senior adviser to Trump and the chair of the CEA until last year, said: “…our job is to not be political but to provide objective analysis.” But that sentiment seemed to disappear last week when the CEA posted a chart on Twitter which showed the number of COVID-19 deaths in the US, declining now but still well over 1,000 per day, and model projections of future fatalities.
Most of the models showed significant deaths extending into the summer. But one projection, inexplicably, showed a smoothed curve —called in the technical lingo a cubic fit — with deaths disappearing by mid-May. That last curve did not belong on the chart. It was the wrong approach to understanding the data and has no basis in the underlying epidemiological issues.
Many observers thought that the curve was there because it was placed by Hassett to give the impression that COVID-19 is on its way out.
Jason Furman, a CEA chair in the Obama administration, reacted strongly on Twitter.”The stakes on the epidemiological questions are so high that this utterly superficial and misleading ‘modeling’ has no place whatsoever in any discussion of the government’s response,” Furman said.
A firestorm of recrimination emerged as Tomas Philipson, the current acting CEA chair, accused Furman of being the only chair without peer-reviewed scientific work, a painful, if true, schoolyard taunt for academic economists.
All concerned would have been well advised in these difficult times to take Hassett’s own advice in his When the President Calls interview to not be “…so confident that your model is so perfect that you disregard criticism and disregard data…In other words, as well as preparing for being right, you should also be preparing for being wrong—because you don’t have a monopoly on the model of how the world works.”
The CEA was established to bring rigorous policy analysis right into the White House. The CEA serves the president when it asks questions and advises, not when it is instructed to support a predetermined conclusion.
The COVID-19 crisis is no time for one of our valued institutions to be losing its commitment to analysis and data. There has never been a time when the nation needs professionalism more than now.
The administration and the nation are not well served by recrimination as a substitute for understanding facts. The expertise built up over many decades in the CEA and agencies like the Centers for Disease Control and Prevention, the Food and Drug Administration and others will guide us through this crisis.
Politicians should cherish such government resources, not disparage them.
Simon W. Bowmaker is Clinical Professor of Economics at the Stern School of Business, New York University and author of When the President Calls: Conversations with Economic Policymakers.
Paul Wachtel is Professor of Economics at the Stern School of Business, New York University.