Interview with Obama

This is exactly the sort of link which MR normally shuns.  But it really is worth reading.  David Leonhardt runs the interview.  I do not agree with Obama on all points but he understands economic policy better than do most professional economists, whether Democrats, Republicans, etc.


"I do not agree with Obama on all points but he understands economic policy better than do most professional economists, whether Democrats, Republicans, etc."

I don't mean to be disrespectful, but come on!

You lose any credibility that you had remaining as a serious economist with stupid statements such as these.

You're increasingly revealing yourself to be nothing more than one of those silly GMU economists who apparently don't do anything but blog, talk, and eat all day. No serious research, no serious or real contribution to academics or knowledge.

We know that you abandoned any ambition for real academic work or research, or to contributing to knowledge in general, a long, long time ago in order to become more known by the public, and the play the public's idea of what or who an "economist" is. So I suppose this is a lame attempt to try to curry favor and wiggle your way into becoming some sort of policy entrepreneur.

Do everyone a favor, and stop calling yourself an "economist." You are a dilletante, and nothing more.

Comments for this post are closed

More crap about how a prosperous economy is impossible without ever
increasing loans to consumers, therefore taxpayers have to give hundreds
of billions to banks to make them "healthy".

Obama is peddling absolute horseshit on the first page of the interview.
The same kind of crap that led to Tyler saying:
"The Paulson Plan is better than nothing".

Comments for this post are closed


Um, just for the record, Tyler continues to write research papers that get
accepted and published in reasonably respectable economics journals. He does
not generally talk about these here or in other public fora he participates in,
but that he does not do so does not mean that he is not doing such things.
Indeed, I, like many others, are amazed that he is able to do as many things
as he manages to do.

Frankly, you owe him an apology, although I doubt that he will demand or expect
one. You are an ignorant disgrace.

Comments for this post are closed

@Andrew: That jumped out at me, too. The whole conversation in the news recently about "swine flu will have a negative economic effect" is the same ghoulish vein. Clearly, we should just outlaw abortion and birth control, but mandate euthanasia for anyone older than 65.

Comments for this post are closed

Perhaps it's because we were starved for this the past 8 years, but I'm most impressed with how thoughtful the President is, how he admits he doesn't have all the answers, and how willing he is to pubicly speak his mind, rather than spout pre-cooked soundbites to carefully selected audiences.

When I disagree with Obama's policy positions, I find myself taking a second look at my own positions and really trying to fairly consider his views.

Comments for this post are closed

@Phil: Economics and economic policy are not the same thing. Tyler did not claim that Obama understands economics better than most professional economists, but that he understands economic policy better than most professional economists. I would not be surprised if that is true, because most professional economists work in areas that do not require translating theory or observation into policy, and therefore have not learned the skills necessary to do so.

Comments for this post are closed

Obama has shown a remarkable ability to process intellectual thought. I do think that it may be the case that his performance in this interview is more a result of spending months talking with a bunch of top economists rather than any true economic understanding of his own. But there's definitely something there.

The concern is that people forget that Obama is a lawyer. Lawyers who are tasked with promoting a side in an argument learn to understand the opposing argument, hopefully better than the opposition does. But they don't use their understanding of all the arguments to reach a more accurate conclusion; they use their understanding of all the arguments to promote the view they started with in the first place.

Comments for this post are closed


Comments for this post are closed

Yahbut, Bush didn't say we needed a revolution in finance, energy, and healthcare. For example, he wants to cure the business cycle. Obama cannot possibly be that thoughtful. We thought we had cured the business cycle. Now we know the name for that is hubris.

Well, maybe we do need a revolution in those areas, but more likely we need an evolution. Most times you have a revolution, just means you will need another one in short order.

Comments for this post are closed

delaney is a troll. Ignore him.

Comments for this post are closed

I question whether you can infer much from this type of media interview. From my limited experience the basic questions usually have to be submitted in advance. So President Obama is essentially reading from a script, with some degree of improvisation in response to the follow-up questions.

Comments for this post are closed

I think "delaney" might be Bryan Caplan trying to be funny or something.

Comments for this post are closed

Oh come on, that opportunity cost thing was just silly. I think the Stand-up Economist nailed this: if I offer you one Snickers bar, that's great, but if I offer you a choice of a Snickers bar or less-desirable M&Ms you have to factor in the opportunity cost of not taking the M&Ms, and if I offer you the choice of two identical Snickers bars I've really screwed you over. Opportunity cost is a non-trivial idea but it's not something that takes an advanced economics education to understand.

Comments for this post are closed

Yes, please ignore Delaney. Troll is too kind of word.

On topic: The interview is very impressive and reminds me why I (reluctantly) voted for him. Here is something interesting:

"But, I mean, the fact is that Larry Summers right now is very comfortable making arguments, often quite passionately, that Bob Reich used to be making when he was in the Clinton White House."

I am not too surprised by this, and I don't think it is because Larry Summers has moved much too the left. Instead it was probably the case that the policy direction was to the left of Larry's thinking in the first Clinton term, so he argued against it from the right, but sees less need to do so now with no Robert Reich at the table.

Comments for this post are closed

Somebody please notify Eliezer Yudkowsky that, yes, he will die someday, and that no, his mind will not be uploaded onto a hard drive.

Comments for this post are closed

Please say that I misread Tyler. Obama has little grasp of economic policy. The article offers no real ability to infer expertise. In addition, there is nothing to suggest by his policy that his grasps the significance of policy. We are headed to a disaster.

Comments for this post are closed

Could you shoot me an email to simply confirm that these nutbar statements relating to Obama lately are simply part of a psychological experiment?

In any case, sure, Obama's ability to recite economic policy concepts is drastically better than the economic policies he's actually putting into place. Which are, both in terms of ends and the means being used to put them into place, utter shit.

Comments for this post are closed

"Obama has shown a remarkable ability to process intellectual thought. I do think that it may be the case that his performance in this interview is more a result of spending months talking with a bunch of top economists rather than any true economic understanding of his own."

In other words, Obama is a trained parrot. He gives the illusion of intelligence.

Tyler - you gotta know better.

Comments for this post are closed

I swore to give up blog commenting, but you have a real doosy there. Are you a serious economist? The fact that you post anonymously seems to me to suggest no. Or at least you hold no weight as a serious economist.

As an undergraduate econ student, I can say honestly I learn more (and more quickly) reading this blog, the links it posts to, and the sometimes moronic but usually informative commenters' opinions than I learn from the almost always bullshit and repetitive crap my professors must feed me as part of the totally serious undergraduate economics learning program.

Also, Tyler's "totally non-serious" books (Discover your Inner Economist, for instance), while admittedly covering topics that usually aren't so controversial, have another purpose, and that is to teach normal people how economists think. And their entertaining qualities make them infinitely more readable than anything you or some totally serious professional economist would ever publish.

Last, I doubt Dr. Cowen eats all day, but if he does, more power to him: If I had the money, I would eat a lot of delicious and interesting food too.

Enjoy your corndogs and totally serious economics papers.

Comments for this post are closed

Calm down, folks. It really is a pretty good interview and Obama comes across as informed, insightful, and really quite moderate. The hyperbole in the comments seems completely inappropriate.

Even though some of the comments are funny, cf. health care:

"Aren't the information asymmetries largely a consequence of the current government regulations, laws and subsidies?"

Mmmkay. I don't think "information asymmetries" means what you think it means.

Comments for this post are closed


I don't think you understand my point.

The informational distortions that have been created are obvious to anyone who sees items like $100 charges on hospital bills for an asprin.

Market prices provide information, but when price fixing occurs distortions arise. In health care markets where there is less governmental interference (e.g., plastic surgery), prices contain more information that is useful to consumers.

Obama says he trust his doc because he is ignorant, OK fine. But in the areas of medicine that are not government subsidized, where customers pay out of pocket, docs compete for customers (health care recipients if you like) by better service and/or lower prices. In these areas information is more abundantly flowing (the asymmetries are lessened).

BTW, every time Obama starts as someone else put it, "preening about his pragmatism", all I can think of is Mao's statement about where truth comes from. The "Hidden Order" that David Friedman brings to light in his book with this title, and the consequences of the "Invisible Hand" have nothing do to with Obama's government-to-the-rescue-with-a-plan-and-a-bailout-paid-for-by-the-rich-pragmatic-plan.

I think this is funny too, but I'm not using funny the way you used it.


Comments for this post are closed

I decided for the hell of it, to read the interview. I'm not impressed. Tyler must be trying to drive up the hit counter if he thinks that there's some exceptional grasp of "economic policy" includes these gems:

"We will miss it in the sense that as a consequence of 25-year-olds getting million-dollar bonuses, they were willing to pay $100 for a steak dinner and that waiter was getting the kinds of tips that would make a college professor envious."

(By all means, million dollar bonuses should be reserved for Fannie Mae executives, we can't have them uppity young 'un's outshining their bloviating professors-but then again, Obama thinks everybody's salary is his business)

"Now, the fact that we had such poor regulation means — in some of these markets, particularly around the securitized mortgages — means that the pain has been democratized as well. "

(Yeah, more regulation is always the answer to the problem. No mention of CRA, Fannie, Freddie, ACORN, Dodd & Frank,and oh yes, Atty. Obama, though.)

"We set out a goal in my speech to the joint session that said everybody should have at least one year of post-high-school training. And I think it would be too rigid to say everybody needs a four-year-college degree."

(Beyond the fact that we don't need the President to be the national career counselor and truant officer-why do we need a fifth year of high school? Lets talk about the impediments to real education that reside in the NEA and social graduation, ebonics, nongraded classes and a myriad of other educational novelties that are inevitably generated by the Democrat's shock troops in education)

"And part of what I think government can do effectively is to be an honest broker in assessing and evaluating treatment options. And certainly that’s true when it comes to Medicare and Medicaid, where the taxpayers are footing the bill and we have an obligation to get those costs under control."

(Does anybody here think that M/M is a success in being an "honest broker"? The kicker is the last part, where he talks about taxpayers footing the bill and having an obligation to get costs under control. This is the part where you get no choice, just some bureacrat dictating some government approved cookie cutter treatment and pulling the plug when the bureacrat can't get enough QLY's for the treatment. Nothing here about restoring consumer sovereignty, just more bureacracy. I really have to laugh when people think HMO's are all SOBs looking to screw subscribers out of treatment-but a government monopoly mandated to control costs will suddenly lavish you with benefits)

Comments for this post are closed

Here is something just posted over at Cafe Hayek illustrating Obama's hubris and ignorance:

"a slice from Gillespie's and Welch's fine essay:

'Consider the president's recent "major" speech about transportation, yet another Castro-like exhortation in which Obama boldly rejected the failed policies of the past in favor of the failed policies of the future.
"Our highways are clogged with traffic," he noted, before unveiling his big fix: Shiny new trains that go almost twice as fast as cars. Forget that, as urban historian Joel Garreau has long documented, our country has been decentralizing its living and working patterns for decades now, migrating from virtually all urban centers (except maybe for booming Washington, D.C.) to relatively low-density suburbs. In a big, spread-out country where individualized service at the coffee stand, on cable TV, and in your computer is the new normal, our chief visionary officer is talking about a one-size-fits-all solution that will surely bomb even bigger than NBC's Supertrain.'"

This is just more proof to me that Tyler is just rattling the cage of "professional economists"; again, I find it unbelievable that Tyler thinks that Russ and Don and the Cafe Hayek are grossly inferior in their sagacity about economic policy to Obama and his ilk. Balderdash, rubbish! Its just chum; Bravo Tyler!

Comments for this post are closed

Dear Indiana Jim,

The $100 charge on a hospital bill for an aspirin (to the extent that it exists) is not caused by information asymmetries (since we all know that this price is "too high") but by someone other than the patient paying for it on the margin (cf. insurance, whether privately or by the government).

The relevant information asymmetries in health care provision are (i) the patient not knowing what treatments or services s/he needs, and (ii) the patient being unable to evaluate the quality of care received even after the fact. The market in all its magic is not going to work very well when one side of the market is clueless.

Whether and to what extent the government might be able to alleviate some of the informational problems in health care, for example by collecting information and making it available to the public, is an interesting question and well worth discussing.

Comments for this post are closed

Please, Obama absolutely nailed this interview. I would be content with a president with half of Obama's level of understand, half of his ability to listen to others, half of his ability to appreciate nuances, and half of his pragmatism.

If you think he falls short on any of those fronts, particularly in this interview, then you either have COMPLETELY unrealistic and unfair views about the presidency, or you're blinded by your ideology.

And I'm not even going to invoke a comparison to Bush. No sense setting such a low bar when people demand much better and Obama is capable of giving it to them.

Comments for this post are closed

"You lose any credibility that you had remaining as a serious economist with stupid statements such as these."

It pains me to say this, because I used to love this blog, but I have to say it: ditto delaney.

Cowen doesn't seem to realize that who he's really praising are Geithner, Summers, and the other econ advisers that Obama merely parrots when he wants to sound knowledgeable. Obama is, and always will be, a crooked Chicago thug who is better than most at PR. He has never shown a flash of economic thinking. Nationalizing industries is bad economics. Running huge deficits that I would rather leave the country than pay for with future taxes, is bad economic policy. Whether protectionism, wage and price controls and/or supports, government micromanagement of the financial and other sectors of the economy, or any other collectivist, statist, big-government, central planning idea of his, it's all crap. You should resign from the CSPC, unless you are to serve as a warning of the fatal conceit.

Comments for this post are closed

A good politician is a fast learner that can parrot the buzzwords associated with experts. All this has proven is what we already know, Obama is a very good politician.

However, the longer he keeps talking about economics, it will be harder and harder for him to not understand it. It's a good thing. Even bad economics (with a bit of humility, and that's the bad news) is better than pure populism.

He has most of the problems right, such as the credit-boom-cycle and end-of-life/futile medical costs. His hinted solutions are terrifying if not evil, but that might not be a problem as reality unfolds.

He is obviously working hard to assuage his critics. I suspect he dropped a dime on the torture memos to goose Cheney. Don't get me wrong, I'll take it. But to prove his heart is in the right place would require consistent performance. And still, was Clinton's heart in the right place? Who knows.

Comments for this post are closed

A+, and not just because he is a very articulate black man.

Comments for this post are closed


It is more interesting to question how much information would be produced in that absence of so damn many price distortions that exist BECAUSE of government. What is the incentive to question as a recipient if you are not on the hook for the bill? Obviously less. Information is costly, obviously, but do consumers buy other complex and expensive products without the government serving as an "honest" broker to provide them with information? Of course they do! Come on, get the point. Information is more forthcoming in freer markets; I don't consult the government information czar when I buy a new car or computer or flat screen tv, etc. even though the producers of these complex and expensive goods know one Hell of a lot more about them than I do.

Comments for this post are closed

"I'm trying hard not to swoon, here, because I'm a libertarian but HOLY CRAP IT FEELS GOOD TO HAVE AN INTELLIGENT PRESIDENT. He used the words "comparative advantage" in his first sentence SQUUEEEEE...

Posted by: Eliezer Yudkowsky at Apr 29, 2009 7:29:14 PM"

Glad the fluff makes you FEEL GOOD. I guess that is what this administration is all about. I put no faith in what Obama says, as he usually does the opposite.

Oddly enough, about a year ago, Bush answered a question - concisely - about allowing markets to work to find the proper balance of price and supply. It was a surprising elegant answer. I'm afraid Obama would provide the same answer, and then appoint a pricing czar to handle the matter.

Comments for this post are closed

Tom is right:

Economics is primarily about what people do, not what they say they will do. Obama said, prior to being elected that he would not be a borrow and spend pres., after the election he IS the biggest borrow and spend pres. in a generation. In regard to health care, bailouts, etc. he seeks congressional sign-on immediately without thought because there is CRISIS after CRISIS after CRISIS. Give me a break; this is nothing but a series of as Glen Beck points out "problems" that have been cast from the bully pulpit as CRISIS. As Emanuel and Clinton and Pelosi have ALL made explicit: "never let a good CRISIS go to waste". The unspoken corollary is: Never let a problem that could be cast as a CRISIS remain a problem (to be considered prudently after considerable debate).

Again, Tom is correct in his post; Bravo Tom!

Comments for this post are closed

This "interview" almost certainly consisted solely of questions that were submitted days prior to the sit down. Too bad we don't know who wrote Obama's answers for him.

Comments for this post are closed people are a bunch of nonsense. I know that hardly makes sense, but neither do most of you...

Alright, I disagree with most of what Obama wants to do, and with his general direction. Didn't vote for him. But still, you don't parrot what he said in that interview. Much too complex and knowledgeable. Which one of you morons predicting the end of MR as we all know it actually read the whole thing? It's really pretty good. There's a couple parts you're gonna disagree with, sure, but he knows the basics. It's what he draws from the basics that's disturbing to me, but I still admit he knows them.

I could say the same about Krugman. And I do. He knows economic policy very well, but his conclusions are what bother me. And which one of you wants to have an economics debate with Paul Krugman?

Comments for this post are closed

Obama has now passed a domain-specific version of the Turing Test. This is great news for AI research. Hurray!

Comments for this post are closed

Indiana Jim,

"I don't consult the government information czar when I buy a new car or computer or flat screen tv, etc."

It is extremely easy to evaluate cars (uniform products) either ex-ante (since tens or hundreds of thousands of identical cars exit) or ex-post (because these days cars are not supposed to break down for a long time). Health care couldn't be more different, and evaluating the care you receive from your doctor is close to impossible. Oh, and markets for information have a really tough time in general because it is difficult to exclude non-payers from the information produced.

Comments for this post are closed

There's a couple parts you're gonna disagree with, sure, but he knows the basics.

That's the standard for knowing more than most professional economists?

Comments for this post are closed

I think the most unbelievable comments are the ones claiming that Tyler is "chumming the water" or that he's trying to up his hit count. OH NOES, some extreme libertarian/republicans are upset that one of their leading intellectuals actually respects Barack Obama, even if he doesn't always agree with him. Indiana Jim, Phil, et al. Get a grip.

Comments for this post are closed

Ozornik asked,
//Would you dare (staying logical) to label Smith's comprehension of economic policy (that was the subject of Tyler's post, right?) as 'not-professional'? Less professional than Obama's?//

Well, comprehension of economics can hardly be professional, it's either good or bad or more or less thorough. And, um, considering Obama has around 250 years of successive improvements to Smith's thoughts off of which to work, then , dare I say, "yes"? Or will that invoke the e-wrath of the great Ozornik?

And no that was not the subject of the post at all. The subject was that there is this link, see. It goes to the NYT site, see. And the reason for the posting is that Obama has a mastery of the basic concepts driving economic thought (whether it was fed to him or not, believe as you will). He just happens to outline the basics more eloquently than a lot of rambling professional economists.

And to anticipate your next silly question, no, Obama is not a professional economist. And neither was Smith.

Comments for this post are closed


Tell me, please, since you wrote that "Obama has a mastery of the basic concepts driving economic thought" what are you talking about? That is, what do you consider the driving concepts to be that Obama has such a better handle on than Smith?

Comments for this post are closed


To dismiss Smith as "a raving socialist" on the basis of a handful of quotes out of his voluminous works is not my idea of an accurate read of Smith. This reminds me of how the passages of scripture were once selectively interpreted as saying that the Earth had to be flat. In the great works, the whole is generally much greater than sum of the parts.

So the question remains, what drivers of economics does Obama have a better handle on than Smith? Tim assert it, so let him provide us a taxonomy. Tim talks, but his talk is only as good as its evidentiary backing.

Comments for this post are closed

Alright Indiana Jim, since you have a clever commenter name. Consider this statement by Obama:
//I don’t know how much that hip replacement cost. I would have paid out of pocket for that hip replacement just because she’s my grandmother. Whether, sort of in the aggregate, society making those decisions to give my grandmother, or everybody else’s aging grandparents or parents, a hip replacement when they’re terminally ill is a sustainable model, is a very difficult question. If somebody told me that my grandmother couldn’t have a hip replacement and she had to lie there in misery in the waning days of her life — that would be pretty upsetting.//

I think that pretty much shows he understands where the drawing line is. We all agree that there are issues in health care, and Obama recognizes that any socialized system has some potential drawbacks. He admits it there.

I don't know his health policy in detail; maybe you do. But what I was saying is he KNOWS THE BASICS and can understand that trying to aggregate economic activity and condense it into a single national policy has some problems. Most economists agree here, but it's the normative conclusions where they disagree.

There are other examples in that interview. Read it again.

Comments for this post are closed

Barkley Rosser,

If anything, Cowen owes me and the majority of other "professional economists, whether Democrats, Republicans" an apology. After all he was the one claiming that a smooth talking lawyer and former community organizer/activist with not only limited to no economic education, but no business or entrepreneurial experience, possessed a better understanding of economic policy.

Perhaps your judgment is impaired due to your friendship with him. But let's face it, Cowen has gotten too big for his shorts ever since he started showing up in the Times and his blog got popular.

Comments for this post are closed

I think Tyler's probably right that Obama understands econ better than most economists. Is that necessarily a statement about the state of the economics profession, as so many commenters apparently assume? I think not. It's a statement about Obama.

Consider two groups: lawyers and economists. On average, the lawyers understand more about law than the economists do, and the economists understand more about econ than the lawyers do. Nevertheless, both groups have distributions, and those distributions have tails. Obama, being very smart and educated, sits in the tail of the lawyer group whose understanding of econ exceeds that of the average economist. (I'm sure there are also some economists out there with a better understanding of law than the average lawyer.)

Comments for this post are closed

mulp is missing what Alchian pointed out years ago: Rate and volume both alter total cost in production (as Alchian makes clear, volume constant, rate drives up marginal cost) and rate and volume both matter regarding deficit and debt. Obama is running up the debt with unprecedented rapidity for a president NOT in a MAJOR war. Reagan, unbeknownst to mulp and other readers of left-wing tall tales (publich school "history"), was the key "actor" in the U.S. winning the cold war. Long before a host of prominent mathematical economists (e.g. Samuelson), Reagan was anticipting the weakness and fall of the United Soviet SOCIALIST Republic.

Comments for this post are closed

delaney and Barkley,

I think both of you have your points: delaney is right in arguing that Tyler's statments are "silly", but Barkley is right to object to delaney's "attacking the man" rather than the argument. delaney's first post was disrespectful, notwithstanding his saying "I don't mean to be disrespectful." I do not believe that anyone "owes" anyone an apology; people are free to make ad homenim arguments if they like, but they should learn that doing so leaves them open to having their legitimate points despoiled by association with their ad homenim. Decorum matters delaney; your passion for liberty and rational thought would be unassailable with this lesson learned.

Comments for this post are closed

Tyler congratulations on driving up the hit counter. Say anything about Obama
and the Obama youth comes out ready to defend their Lord and Master. Of course
its the freemarket right/libertarians that's dogmatic and not very bright, so we
can't possibly see the innate wisdom in spending MORE than all previous presidents
from Washington to the profligate GW Bush.

Sic Semper Tyrannis

Comments for this post are closed

"we can’t just look at things in the aggregate, we do want to grow the pie, but we want to make sure that prosperity is spread across the spectrum of regions and occupations and genders and races ... economic policy should focus on growing the pie, but it also has to make sure that everybody has got opportunity in that system"

I think Obama has been pretty clear all along: he appreciates free markets as the major way to create growth but doesn't ideologically believe growth alone is the best metric to judge economic policy. He's a Democrat, not a Libertarian, so I don't know why people here claim he's necessarily misunderstanding the economic facts when he makes rational choices based on valuing equality at the expense of some efficiency.

"what I’ve been constantly searching for is a ruthless pragmatism when it comes to economic policy"

I think those criticising his words vs actions and the "pragmatic" comments don't realize the inertia in DC and the difficulty of even trivial change. This interview shows Obama is at least well-coached on the big picture of economic policy and values advisors who can listen to political constraints to help decide where to spend limited political capital.

My guess is that his advisors are explaining economic facts and estimates, he weighs them by a different metric than purely growth/efficiency, he speaks more idealistically about economic facts hoping to inform/sway public opinion, but he spends his real effort only on the issues he judges most important.

Comments for this post are closed

ami wrote: "I think those criticising his words vs actions and the "pragmatic" comments don't realize the inertia in DC and the difficulty of even trivial change."

Nonsense; Yes it was was difficult for Bush in his last two years to accomplish much given the Democratically controlled Congress and the mainstream media going negative on his every stammer. But it has been all too easy for Obama to make MAJOR changes by repeating the mantra Crisis, Crisis, Crisis and with the overwhelmingly Democratic party and the mainstream media 110% in his corner.

Come on ami, the skids are greased for Obama and he is moving like greased lightning. No wonder Chris Matthews was getting a tingle up his leg.

Comments for this post are closed


Oh that is sooooo funny; and oh so clever.... You are a comedic genius! The stand up economist's stock is down today; wow!


Comments for this post are closed

Comments for this post are closed