May 06, 2003

Space Wars Inside the Topkapi Palace

The multitasking John Irons covers the exile of the Council of Economic Advisers from Proximity to the Presidential Presence--their move from the Old (Eisenhower) Executive Office Building right next to the White House (and inside its outer security bubble) to 18th & G Streets. This stuff is really important: one of the principal reasons that the Secretary of the Treasury is more important than the Secretary of Commerce is that he is 1 1/2 blocks closer to the White House's Roosevelt Conference Room. One of the reasons that Assistants to the President for National Security have often been more important than Secretaries of State or Defense has been that State is five blocks away and Defense is across the Potomac River. By contrast, Assistants to the President for Economic Policy have rarely been more important than Treasury Secretaries, in large part because the Treasury Secretary can go from his office to anywhere in the White House in two minutes.

If I were in Greg Mankiw's shoes, I would demand a reversal--or at least a small personal closet office inside the White House bubble--or I would go back to Harvard.

And if this isn't reversed, I guess I am going to have to change my own career aims should I ever find myself back in Washington: as of today, Deputy Assistant to the President for Economic Policy now looks like a much better job than Chair of the CEA

ArgMax Economics Weblog: CEA: Banished and Vacant: Posted by John Irons at May 06, 2003 05:12 PM: The Washington Post reported today that the Council of Economic Advisors (CEA) is physically being booted off the White House grounds, and is being relocated to 18th and G streets (along with other heavy hitting departments such as the Office of Presidential Correspondence.)

In addition, two of the three CEA positions are vacant, and Mankiw has yet to be confirmed.

The Council of Economic Advisors has, for many years, and as long as I can remember, been seen as the part of the White House economic team that provides (relatively) unbiased and non-political economic advice and analysis to the president and other members of the administration. The most visible product of the council is the Economic Report of the President, but the council has, historically, produced other reports that make their way to the president's desk.

Its chairman and three members (as well as supporting researchers) are usually drawn primarily (if not exclusively) from academia. The past and future chairs, Glenn Hubbard and Greg Mankiw, for example, are well respected economics professors from Columbia and Harvard. (Both of whom happen to go by their middle name... hmmm... just a coincidence? or is there something nefarious going on.) Paul Krugman, for example, served in the CEA under Ronald Reagan!

I hope the change in location does not indicate a reduced role for the CEA. Good economic policy must be based on honest, competent economic policy assessment; and the CEA under past administrations have strived to provide this kind of analysis, and strived to be largely independent of politics.

However, from what I hear, proximity is often an indication of influence in the inside-the-beltway political game. The decline in the influence of the CEA in the current administration is a potentially troubling turn of affairs.

'CEA You Later,' Bush Says (

The Council of Economic Advisers is going into exile.

Beginning Wednesday, President Bush's economists will pack up their files and move out of the White House complex, an eviction after more than 50 years, and enter new space a couple of blocks away at 1800 G St. NW.

The official line is that this is not a demotion for the CEA. "Absolutely not," said White House spokeswoman Ashley Snee. "It's a space-management issue."

Bush aides are well aware, however, that few people in town are going to accept that explanation. In the White House, where proximity is power, an eviction from the Eisenhower Executive Office Building is the political equivalent of being sent to Elba. The CEA will be sharing space at 18th and G with such crucial functions as the Office of Presidential Correspondence.

Heightening suspicion is the state of upheaval at the CEA, where two of the three seats are vacant and the third is soon to be.

The organization is without a chairman; Greg Mankiw has not been confirmed to replace Glenn Hubbard, who announced his resignation Feb. 26. The seat vacated last fall by Mark McClellan is still empty (Bush plans to nominate Princeton's Harvey Rosen). The only sitting member of the CEA, Randall S. Kroszner, is due back at the University of Chicago; unofficial word is he'll be replaced by MIT's Kristin Forbes. The office is also getting a new chief economist, the third in that job this year.

Posted by DeLong at May 6, 2003 03:03 PM | TrackBack


I actually thought that Mankiw might have been writing large sections of Bush's most recent economic speeches. Notice that they have involved passages on macro, which are relatively technical compared to what you used to hear from Bush:

"We have one of the strongest economies in the industrialized world. Things aren't going as good as they can, but nevertheless, we're making progress. We've got some positives on which we can build. But one of the problems of being a productive economy is that a worker can -- one worker puts out -- there's better output per worker, let me put it to you that way. And therefore, in order for the job market to increase, you need to increase demand for goods and services. If one worker can produce more goods or more services than before, you need more goods and services to be able to hire the additional worker. In other words, we've got to have policy which stimulates demand. And the best way to stimulate demand is to let people keep more of their own money. (Applause.)"

Well maybe this one was a little botched, but I think it gets what I'm saying across. Could it be that Mankiw has been tutoring him in undergrad econ? Look at some of his more recent speeches and you'll see what I mean.

Posted by: Bobby on May 6, 2003 04:07 PM

The Silver Lining. One of the big concerns when Mankiw signed up was whether he would maintain his integrity. Maybe this 'relocation' is a sign that he did not knuckle under to the Rove spin machine like almost everyone else did (with the exception of Sec. O'Neill and he was fired).

Posted by: Hal McClure on May 6, 2003 04:49 PM

The Silver Lining. One of the big concerns when Mankiw signed up was whether he would maintain his integrity. Maybe this 'relocation' is a sign that he did not knuckle under to the Rove spin machine like almost everyone else did (with the exception of Sec. O'Neill and he was fired).

Posted by: Hal McClure on May 6, 2003 04:52 PM

Desperate times require desperate measures. My guess is that the latest Karl Rove poll shows that Bush will lose in 04 if unemployment does not turn around. Look for a change in policy. "Damn the economists! Full employment ahead!!" (Apologies to Admiral Farragut). From now until November 2004, economic policy will be subverted by political policy. After all we are looking at the MBA presidency. If the MBA commands it, it will be done or the workers will be fired or laid off.

Posted by: bakho on May 6, 2003 08:54 PM

Has looting broken out yet?

Posted by: RonK, Seattle on May 6, 2003 09:02 PM

I miss my old office. It was a really nice office. Am very sorrry future research assistants at the CEA won't get anything like it.

Posted by: Elizabeth on May 7, 2003 02:47 PM

"Yildiz Palace" is more like it these days!

Posted by: kevin quinn on June 17, 2003 07:57 AM
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