New Chief Economic Adviser Is Not A Fan Of Tax Cuts For Economic Stimulus

Following the resignation of Christina Romer, President Obama promoted Austan Goolsbee to chief economic adviser. Goolsbee does not appear to be a fan of tax cuts to stimulate economic activity, which may contradict with the current White House plans. See the following post from The Capital Spectator.

As expected, President Obama chose Austan Goolsbee as the new head of the White House Council of Economic Advisers. He is the replacement for the outgoing Christina Romer. Goolsbee, as AP reports today, "is already a central player on the Obama economic team, having served on the three-member economic council since the start of the administration. His relationship with Obama dates back to the 2008 presidential campaign, when he served as a senior economic policy adviser."

Ok, but what can we expect (or not) from Gooslbee? Reuters political columnist James Pethokoukis cautions against anticipating any dramatic stimulus-oriented tax cutting: "Goolsbee is extremely skeptical of supply-side tax arguments, calling the Laffer Curve a 'fleeting figment of economic imagination.'"

The Washington Post's Ezra Klein agrees that Austin's no fan of trimming taxes to spur economic activity. But that stance may cause a slight conflict with the current White House agenda. As Klein explains: "Austan Goolsbee's academic work suggests that investment tax credits don't do much for the economy. The White House that Goolsbee will work for is, however, proposing just such a credit, and Goolsbee will probably be defending it at some point."

The Wall Street Journal declared on Wednesday, "After 20 months and more than $1 trillion down the Keynesian drain, President Obama is discovering the virtue of tax cuts."

Nonetheless, Time asserts that choosing Goolsbee "augurs continuity with the approach of the past two years" and "is seen as somewhat of a counterweight to Larry Summers among the White House's economic voices."

Meanwhile, we know the new kid in the thick of it has a sense of humor. An economist by day, Goolsbee has a habit of moonlighting as a stand-up comic after the pols go home. Here he is delivering his shtick last year at the Washington Improv...

See video

Finding humor in life is no small benefit these days for a dismal scientist trying to unwind after a day at the office in Washington, considering that the state of the economy is no laughing matter.

Speaking of the economy, what does Goolsbee think of the chances for a new economic contraction? The odds are slight, he said on August 30 on CNN (via Bloomberg): “I don’t think we will have a double-dip recession." But, he added: "Clearly anybody should keep their eye on that."

Does he think differently today? Maybe he'll enlighten us on Sunday, when he'll be a guest on ABC's "This Week" program.

This post has been republished from James Picerno's blog, The Capital Spectator.