“The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.” - John Maynard Keynes
In case you haven’t heard, President Barack Obama replaced Christina Romer, who recently resigned her position as an economic advisor in the administration, with Austan Goolsbee, an economist from the University of Chicago.
Over at his Reuters blog, James Pethokoukis gives us an idea of what to expect from Goolsbee, which doesn’t like he’ll bring much new to the administration:
Don’t expect him to recommend any big tax cuts. Goolsbee is extremely skeptical of supply-side tax arguments, calling the Laffer Curve a “fleeting figment of economic imagination.” Indeed, he may have influenced Obama himself, who in his 2008 book, “The Audacity of Hope,” says he doesn’t buy the theory that the Reagan tax cuts changed investment or labor incentives. He does, however, think it would not be a bad idea to lower corporate tax rates if there were also fewer credits and deductions.