In lieu of a CEA?

by on February 9, 2017 at 11:37 am in Current Affairs, Economics, Uncategorized | Permalink

Vice President Mike Pence has hired Mark Calabria as his chief economist, according to several people familiar with the move.

Calabria was director of financial regulation studies at the Cato Institute, where he was a prominent voice on financial services and economic policy and an expert on mortgage and housing reform.

Before joining Cato in 2009, Calabria worked for the Senate Banking Committee, where he handled housing, mortgage finance, economics, banking and insurance for then-ranking member Richard Shelby (R-Ala.).

Here is the Politico linkMark is also a George Mason Ph.d.

1 WC Varones February 9, 2017 at 11:44 am

Speaking of which, isn’t the CEA rather duplicative of the National Economic Council?

2 Rich Berger February 9, 2017 at 11:48 am

Yes, it’s duplication all the way down. A jobs program for the creme de la creme.

3 Art Deco February 9, 2017 at 12:22 pm

The White House is a great sinkhole of patronage. The Nixon Administration got the idea into their heads to expand the White House staff to keep tabs on federal agencies (a task made more acute, one might surmise, because the Nixon personnel system stank and recruited office seekers who would go native; Reagan’s people were adept at recruiting agency chiefs who would not). Henry Kissinger also offered that it was useful to have a brain trust to bring alternative perspectives to the President (“You get [from the State Department] two patently ridiculous suggestions as supposed alternatives to the bureaucratic consensus”). BO’s brain trust was staffed with the likes of Ben Rhodes. Then you get people who are wretched managers. Ron Nessen had a staff of 45 and claimed to work medical residents’ hours. His job was preparing press briefings, which really shouldn’t take you 126 hours a week. . It did not seem to occur to him that he was just a mess at time management and delegating authority. John Dean’s memoir of his 34 months on the White House staff include bulletins on his ever-expanding workforce without ever giving the reader any idea of just what they did all day. (He started with a staff of two).

4 grenvose February 9, 2017 at 4:27 pm

White House staff broadly extends to over 10,000 persons… supposedly “managing” a Federal Executive Branch work force consisting of over 4 million persons. That Executive Branch has over 4,000 economists on the payroll.

Obviously, one more economist is critically needed in that mix… to encourage the others.

5 GoneWithTheWind February 9, 2017 at 4:35 pm

“If all the economists were laid end to end, they’d never reach a conclusion.”

If all the economists were laid end to end they would all point in different directions.

6 Art Deco February 9, 2017 at 6:21 pm

No. More like 600. There are appended agencies with 4 digit staffs (OMB, DNI), but even with these, the “Executive Office” does not have a staff of 10,000.

7 Art Deco February 9, 2017 at 12:12 pm

Other way around. The CEA was founded by statute in 1946, and has statutory responsibility to produce the Economic Report of the President.. The ‘National Economic Council’ was a Clinton-era plant, IIRC.

8 CdnExpat February 13, 2017 at 2:00 pm

The NEC was created as the political economy are of advice to the President to balance the CEA which is supposed to be more scientific, or objective, if you will. Different presidents use the two differently, of course, and the difference between the two bodies tends to diminish as a president’s time in office comes to an end.

9 CdnExpat February 13, 2017 at 2:01 pm

Political economy “arm.” Sorry.

10 anon February 9, 2017 at 11:53 am

I, for one, welcome the future Pence administration.

I would probably oppose some policies, but it would be DEFCON Normal, no elevated safety concern.

11 Rob February 9, 2017 at 11:57 am

Even as an unabashed liberal I have to agree. Unlike Trump, I don’t think Pence is capable of causing irreparable harm to the republic.

12 Todd K February 9, 2017 at 12:00 pm

I agree. Pence is a fine representative of the more progressive side of the Republican party.

13 FG February 9, 2017 at 1:23 pm

Surely this is sarcasm. What about Mike Pence would you characterize as “more progressive”?

14 Todd K February 9, 2017 at 1:53 pm

The part where Pence wants to turn the American clock back only to the 80s and not the 50s.

I have no problem reliving the 80s again and may even appreciate it more since not a teenager as I was the last time the 80s rolled around.

15 NatashaRostova February 9, 2017 at 2:16 pm

It’s hard for people to look past his views on homosexuality. And for fair reason, they clearly go a step further than simply anti-gay marriage. But if you can try to detach yourself from the moralistic standards of the past 20 or 30 years, it gets way easier. For example, as far as policies regarding sexual and deviant types go, in a bigger picture of history, Pence is progressive. He isn’t arguing gays should be whipped, killed, imprisoned, or even denied healthcare (etc). Simply that they are ill, and this should be treated in ways that are harmful to the person.

Before I get accused of anything, I find these views reprehensible. Yet they are still consistent within a relatively short time horizon of history. And the progressive movement isn’t going away under a guy like Pence (Or Romney or Bush etc). When you own the universities, the respectable media, and the industries of major power, you own the cultural movement. Pence will roll a few policies back 10 or 20 years, then a new generation of slightly more progressive ‘future leaders’ at Harvard and Google will keep that permanent leftward ball rollin’.

Trump, unlike Pence, is will to break shit. He (by design? by genius? by accident?) wants to find the progressive institutions, plant dynamite under them, and blow them up. Irreparably at least. In this way Pence doesn’t represent an existential threat to progressivism, just a shitty life outcome to certain groups of people. You can twist that into him being more progressive.

16 TMC February 9, 2017 at 12:16 pm

Until he runs, then he’s Hitler.

17 The Other Jim February 9, 2017 at 12:30 pm

Nailed it.

18 dearieme February 9, 2017 at 12:49 pm

Worse, he’d be a Christian Hitler.

19 anon February 9, 2017 at 12:43 pm

As I mentioned in the other thread, some already see what Pence sees as good, as their evil.

Not everyone falls victim to that kind of “all of our guys are equally good,” or “all of yours are equally bad” though.

Still, it was lack of discrimination of shades of grey that got us Trump. We got the worst, because people could not tell which was worse.

That is as true, perhaps more true, in the Republican primary, as it was in the general.

20 dearieme February 9, 2017 at 12:52 pm

What got you Trump was the Dems faking their own selection process to run a widely disliked, warmongering crook who was so bad a candidate that even Trump could beat her, despite many people being able to bring themselves to vote for Trump only by holding their noses.

21 anon February 9, 2017 at 1:06 pm

Dude. Seriously?

If Clinton was a bad candidate, that was a golden opportunity for the Republicans to run a good one.

22 Politics of Cruelty February 9, 2017 at 1:26 pm

Clinton was the most qualified person ever to run for president. Here reputation for corruption was based on unsubstantiated accusations spread by Right Wing mainstream fake news like Fox, Breitbart, and Drudge, and Right Wing columnists and pundits in the NYT and WA Post and on MSNBC, while they were bending over Rightwards, to include “both sides” of each issue– the true side and the totally false side.

23 anon February 9, 2017 at 1:37 pm

I think Clinton would have been a pretty good President, but we got the lesson of a lifetime that being a good (or winning) candidate is not the same thing.

24 Art Deco February 9, 2017 at 1:48 pm

Clinton was the most qualified person ever to run for president.

Yeah, she just ran circles around Dwight Eisenhower.

25 Politics of Cruelty February 9, 2017 at 1:58 pm

Anon. Yes, it would be better for Dems to choose a candidate that the Right had not been bashing for decades. Or else for Dems to come up with Left Wing media, which we do not have any of, in order to spread the truth about a person such as Hillary. Unfortunately, even the supposedly Left media like NYT and WA Post, gave her more negative than positive coverage, because they keep bending over rightwards to give their readers “both sides” of each issue– the truth and the Right Wing propaganda lies.

26 anon February 9, 2017 at 2:48 pm

I liked Hillary, but I think she gave rather wooden speeches in a rather strained public voice. Not a real character flaw, but hard for a politician to make work.

27 anon February 9, 2017 at 2:50 pm

I do think some (too many) commentators wanted to signal their aloofness from partisanship by criticising Hillary “in turn,” and that is part of what got us here.

28 Bob from Ohio February 9, 2017 at 4:07 pm

“Yeah, she just ran circles around Dwight Eisenhower.”

Washington, Jefferson, Madison, JQ Adams, Teddy Roosevelt too.

Heck, Taft [not a good president] had been Solicitor General, US circuit judge, colonial governor and cabinet secretary. Far broader experience than Clinton.

29 anon February 10, 2017 at 12:16 am

Dogs that didn’t bark. No one who said “but, Trump is the best President.”

But then, not a good day for Mr. Trump. In fact, I don’t know which was the worst news: Nordstrom ethics, the Russia call, the China call, the Mexican speechwriter, Flynn’s Russian conversations, the 9th circuit ruling .. a heck of a day for Mr. Trump.

30 Dmitri Helios February 9, 2017 at 1:10 pm

Ah, you’ve found a Strange New Respect for Mr. Pence, I gather.

31 Bob from Ohio February 9, 2017 at 4:08 pm

Nancy Pelosi said she missed George W. last week.

32 Politics of Cruelty February 9, 2017 at 1:27 pm

Pence is less awful than Trump. I would rather have the lesser of 2 evils. But that doesn’t mean that Pence would be good for the country.

33 AlanG February 9, 2017 at 2:00 pm

Yes, let’s roll back all the LGBT rights and a while at it end all abortions. I’m pretty sure that those are mainstream Pence ideals. How any libertarian could support this kind of thinking is truly baffling but maybe nobody who responds to TC is libertarian.

34 Dzhaughn February 9, 2017 at 2:18 pm

What rights do you imagine are particular to being LGBT (as opposed to just ‘human” and/or “adult), and how is membership in that class established?

Abolishing discrimination based on marital status is the obvious Libertarian approach, not the current one.

35 anon February 9, 2017 at 3:32 pm

Abortion and LGBT rights are kind of the standard coin of American politics.

I also think that as with Obamacare, Republicans would have a hard time going as far as they liked, or pretended, in drumming up wedge issues.

36 Art Deco February 9, 2017 at 3:46 pm

A libertarian can support this quite readily. “LGBT rights” is code for conceding to lawyers a franchise to sue people who are exercising their freedom of contract and association. In a free society, you get to hire, promote, demote, and dismiss according to your discretion or according to freely assumed contractual obligation. The same liberty applies to landlords and restaurateurs. And, of course, serious libertarians are aghast at abortion, because it is the intentional killing of a human being.

You might try thinking outside the wretched little box you’ve climbed into you senile cocker.

37 Jesse February 10, 2017 at 8:16 pm

Art Deco totally dead on regarding LGBT. Many will not be happy until every pizzeria is compelled to cater to LGBT weddings, whether they cater to weddings at all. And we must all be compelled to publicly agree that all things LGBT are good. Indeed, we should take our children to parades to watch half-naked grown men gyrate with each other, lest we be bigots. It seems anything BUT libertarian to me.

“intentional killing of a human being” – Right. Even taking it several steps back, I like to frame the situation where a woman wants to abort as one where two people’s rights come in conflict with each other. This conflict is seen as such in lots of other scenarios, and the parties’ rights have to be considered and weighted, etc. But with abortion, most libertarians I know do not want to consider that all peoples rights should be seriously considered – just don’t think too hard about things and make the popular decision which causes less friction at dinner parties. Few libertarians have the spine to treat abortion as a complex, nuanced situation – which is ironic, because they do this with nearly every other topic. Weak sauce.

38 rayward February 9, 2017 at 12:13 pm

Here’s an essay written by Mr. Calabria that provides a clear picture of how he would improve the mortgage/housing market: In a nutshell: originate-and-hold. I’m not sure if Cowen meant to make this point, but having a bunch of independent players rather than a “strong” CEA means no consensus on economic policy in this administration – does the administration prefer a strong dollar or a weak dollar, higher interest rates or lower interest rates. Whether that’s a good thing or a bad thing is debatable. I suspect it will mean a lot more middle-of-the night ad hoc discussions about basic economic policy (the blind leading the blind). Of course, there’s always the possibility of a crisis; and nothing focuses the mind quite like a crisis.

39 AlanG February 9, 2017 at 2:11 pm

Thanks for posting the link. This post alone calls into question the George Mason Econ PhD program. Really, originate and hold? That’s OK if you don’t want to have a home mortgage industry any longer. It would certainly do away with 30 year fixed rate mortgages, and even ARMs might not be so appealing. Banks are not going to want to keep this stuff on balance sheets and in case Dr. Calabria hasn’t noticed the S&L industry went up in smoke several decades ago. Then there was this, “…A system where investors do not care about credit risk is one where toxic mortgages are not only allowed but encouraged.” So we should let the investment banks run amok yet again with complicated securities that were fobbed off on some investors who should have known better but couldn’t understand the various tranches or thought that issuing CDS were just like printing money? I’m sorry, this nation has tried the extreme libertarian approach many times before in its history and the number of dismal failures well out number the successes. But of course with a Cabinet stuffed with Goldman Sachs alums, we should all welcome a return to the new normal of the early oughts.

40 gab February 9, 2017 at 2:31 pm

Originate and hold? That horse is out of the barn, has run down the street, gotten hit by a bus and taken to the glue factory. That will never come back so I doubt it’s anything more than an intellectual exercise on his part. If not, the maybe Flynn is the better alternative as an economic strategist.

41 AlanG February 9, 2017 at 2:39 pm

Flynn clearly has the ear of the Prez!

42 Art Deco February 9, 2017 at 3:41 pm

The argument, if I’m not mistaken, is that mortgage lending of this sort is efficient and that the secondary mortgage market is a function of regulatory arbitrage.

43 rayward February 9, 2017 at 3:54 pm

Depression economics is depression economics, however it’s labeled. Mr. Calabria’s plan is just a round-about way of increasing bank capital requirements, to 100%. After the allies defeated the fascists in WWII, the unrepentant fascists’ lament in Britain was that Britain defeated the fascists only to succumb to the socialists (with the adoption of social welfare programs). The updated version in America is that we defeated the liberals only to succumb to the Austrians. Don’t get me wrong, as I too believe that reliance on monetary stimulus to avoid financial and economic crisis is like reliance on Trump to preserve the rule of law. The pious Mike Pence and Mr. Calabria are made for each other. In Heaven, perhaps, but not here on Earth.

44 Fazal Majid February 9, 2017 at 1:14 pm

Does it matter, when reportedly Trump’s go-to person for economic advice (about something as basic as the pros and cons of a strong dollar, no less) is General Flynn?

Granted, Flynn was self-aware enough to refer his boss to an actual economist. On second thought, that probably means he is more qualified to answer than the average economist.

45 Art Deco February 9, 2017 at 1:49 pm

Does it matter, when reportedly

If it helps you feel better, fine. Don’t bug other people with your speculations.

46 Politics of Cruelty February 9, 2017 at 1:55 pm

Fazal, your comment is interesting to reflect upon. Please don’t let a Trumpster dissuade you from participating here on this board. Comments like Art Decos that bash other people, are the comments that we should do without here.

47 Politics of Cruelty February 9, 2017 at 2:00 pm

Too bad the guy worked for the “think tank”, which is actually a propaganda tank, Cato. Originally the Koch Foundation. An institute where 100% of their “research findings” support their own Libertarian free market political and economic positions. That’s all we need is another propagandist “alternative facts” guy in the White House.

48 AlanG February 9, 2017 at 2:12 pm

How dare you defame a George Mason econ PhD!!! Have you no sense of decency?

49 Ray Lopez February 9, 2017 at 3:45 pm

GMU Austrians in the White House, a sort of fifth column, yeah….

50 Larry Siegel February 13, 2017 at 2:58 am

If you think you’re insulting an organization by associating it with the Kochs, you’re not.

The Cato Foundation, originally the Charles Koch Foundation, unabashedly promotes libertarian thinking so if you’re looking for ideologically unbiased research, look elsewhere. But you might have a long search…

51 anon February 9, 2017 at 3:53 pm

Breaking news. Donald Trump’s Cabinet Won’t Include Chairman of CEA

52 Bob from Ohio February 9, 2017 at 4:13 pm

Oh no, not in the Cabinet! You can’t give advice to the president unless you belong to a committee that never meets!

53 Bill February 9, 2017 at 8:29 pm

I think what everyone missed in the announcement was that the

CEA, NEC, and even Pence’s economics advisor,

Now report to

Steve Bannon,

According to an Executive Order given to Donald by Bannon at 3 am

When Donald does his best work.

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