CEA Chairman no longer part of the president’s cabinet

The White House Council of Economic Advisers is being demoted by the Trump administration, which said in a statement Wednesday that the president’s cabinet won’t include the chairman of the CEA, an official that President Donald Trump also has yet to name.

The diminished stature for the CEA, which was part of President Barack Obama’s cabinet and has advised presidents for over seven decades on the economic impact of their policies, means Mr. Trump will likely rely more heavily on other advisers, such as Gary Cohn, the former Goldman Sachs president who is head of the National Economic Council, and Peter Navarro, the trade critic who is leading the National Trade Council.

Here is more from Josh Zumbrun at the WSJ.

Comments

Cowen is hoping for those 3:00 a.m phone calls from the ignoramus Trump. Don't count on it.

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Does the country really need White House Council of Economic Advisers when there is a National Economic Council? What do they do besides yelling "splitters" at one another?

Indeed. The economics profession has lost a lot of credibility since the Great Recession. This was brought out at a recent AEA association meeting as highlighted by the WSJ. Nowadays, 'your guess is as good as an economist's', which means I could just as easily advice Trump as could TC. In fact, if anybody asks I will expound my economic views on how to save the world right here, just ask me how. For one thing, I think the evidence shows money is largely neutral, and moderate inflation--as Brazil showed post WWII--even in the teens, is relatively harmless.

Yep, I think we could use some inflation right now, but president Temer is a fierce inflation hawk. I do not blame him. When I was a child, comic books didn't have their prices on the covers, they had alphanumerical codes because the prices would change many times throught the week. We could use a good 20% per year inflation like in the 1970s, but we had a 20% a week inflation like in the 1990s would be destructive. Modus in rebus.

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The biggest failure in centuries of economics is not "failing to predict" the subprime crisis but failing to make the broad populace understand the value of free trade.

What an obtuse statement. "Free trade" like "cheap labor" exists largely in the minds of economists. When we're back to Venice trading gold ducats for silk from Damascus, then we can discuss free trade.

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In the 1960s television show Get Smart, the Russian spy organization is called KAOS. And so it is.

Actually, was KAOS of Romanian-origin, its main agent was German and it was incorporated in the state of Delaware for tax reasons.

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A whole bunch of mood affiliating going on. Hindu philosophy suggests to seek your own truth, and the Donald "loves the Hindus". By his own statements, he is most certainly seeking his "own" truth.

Both CEA and NEC are headed up by political appointees, but the staff that runs them are very different. This means that the 2 orgs function very differently, largely because they are tasked to do very different things. CEA is academic, NEC is political.

CEA is an academic organization staffed by nonpartisan research economists who stay on across administrations.

NEC is staffed by political people who get their job because they worked on the campaign and/or are loyal to the current party in power. (This is true under both Democratic and Republican administrations)

That reply was meant for Thiago

Maybe the country has a NEC too much. Seriously, it makes sense to have the top figures appointed by the president (they may be constrained by some rules or not), but changing the whole body of an organization seems silly. Brazil's IPEA is headed bynsomeone appointed by the president (usually a like-minded professor), but most of the staff is made of public workers.

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Thank you for the explanation. I was unsure of the difference.

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"which was part of President Barack Obama’s cabinet "

Sounds like the CEA wasn't part of anyone else's, so a return to normality?

According to Wikipedia, yes, that reading of the post is correct, and the Chair of the CEA was only of Cabinet rank from 2009-2017.

https://en.wikipedia.org/wiki/Cabinet_of_the_United_States
(under "Other positions no longer of Cabinet rank")

I didn't find a better source.

Their only cite for that is to Trump announcing his cabinet though, so I take it with a grain of salt.

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Wikipedia's list of GWB Cabinet members doesn't include CEA chair https://en.m.wikipedia.org/wiki/Presidency_of_George_W._Bush

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But the market loves him, right Tyler?

http://www.reuters.com/article/us-usa-trump-putin-idUSKBN15O2A5

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He should probably move the CEA to Yemen where they can do the least damage.

What has Yemen done to you?

Keeps getting in the way of our hellfire missiles.

I rhink your hellfire missiles keep getting in the way of Yemen's as it circles the Sun.

To be fair, every Hellfire Missile fired at Yemen from 2009-2016 was emblazoned with an imprint of Former President Obama's Nobel Peace Prize.

If you still have a problem with that, go eff yourself, loser.

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He has paid for every missile?

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"He has paid for every missile?"

Well, technically, he financed the costs.

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That is so wrong and yet so hilarious.

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The White House Council of Economic Advisers, the National Economic Council, the National Trade Council: autres temps, autres mœurs; vide infra.

[T]he Foreign Office had around 100-175 staff (including doorkeepers, porters etc.) up to 1914. The Admiralty had around 70-80 well into the mid-19th century. Four government departments (Colonial Office, Foreign Office, Home Office, India Office) were all housed in the building that now only houses about a 1/3rd of the staff of today’s FCO (Charles Street).
[FCO = Foreign and Commonwealth Office]

However, most civil servants did and do not work in Whitehall. Customs, Excise and the Inland Revenue staff were (and are) all civil servants. As a rough guide, in the mid-19th century just the Excise would have had at least 2,000 staff across the UK, with probably double that in the Customs at the same time. ...

Cyril Parkinson had deep insights into government bureaucracy.

In Parkinson’s Law (“work expands so as to fill the time available for its completion”), he noted that during the 1920s, the Royal Navy’s Admiralty staff increased by 78%, while the number of seamen fell by a third and the total ships in the fleet fell by two thirds. } He remarked that, “the Admiralty officials would have multiplied at the same rate had there been no actual seamen at all.”
{the British Navy now has more Admirals than warships}

How many Federal economists are now needed?

Who needs economists when you've got a few ideologues?

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" How many Federal economists are now needed?" [SNIP]

A: The square root of minus one.

& don't forget the 200 econ PhD's @ the Federal Reserve.

God knows what they do.

So, what we really need are irrational economists? I disagree.

What is needed is a small bunch of economists who are aware of how desperately limited their discipline is.

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I thought he was suggesting we needed imaginary economists but we seen to have them in abundance as well.

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WSJ is a shinning beacon of upstanding sensibleness in an ethically imploding, hysterical and nakedly biased media world. In trying to make sense of the Trumpian I find I now rely ever more on WSJ with its deep reservoirs of knowledge and generally dispassionate approach. Their art reviews are often good too! Especially recommend two of their regular podcasts for putting this roller coaster new government in good old style perspective:

Potomac Watch with Paul Gigot, Joe Rago, Kim Strassel (really outstanding journalists, and Joe Rago is one to watch out for in coming years)
http://www.wsj.com/podcasts/browse/wsj-opinion-potomac-watch

WSJ What’s News which every day gives two or three experts (really, they are) the mike for 6-7 minute slots with focused insight on one issue or sector
http://www.wsj.com/podcasts/browse/wsj-opinion-potomac-watch

Is this satire? Or do you not realize that it could be construed that way?

Not at all, it's deliberately serious. A gift for all the gabs, and expression of simple gratefulness.

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Notice I gave the wrong link for What's News -
http://www.wsj.com/podcasts/browse/wsj-whats-news

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Poe's law, or possibly Poe's law in reverse. I quit reading the WSJ editorial page a while ago, around eight years ago, when Peggy Noonan predicted the end of the world if Obama were to be elected. She actually was right about the American public. She said about the 2008 election in a WSJ op ed that America has a secret racist streak that will not allow Americans, once the curtain was drawn in an election booth, to vote for a black. Well, in a way she was right, just early by about eight years.

"Peggy Noonan predicted the end of the world if Obama were to be elected."

She did no such thing.

http://www.peggynoonan.com/475/

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WSJ has been consistently good journalism throughout the Trump Era, with writers who are pro and anti. OTOH, I only read the NYT for the recipes now. And to see the current party line, of course. Haven't looked recently: are they still on "Chaos!" or have they moved on?

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>Mr. Trump will likely rely more heavily on other advisers, such as Gary Cohn, the former Goldman Sachs president

Ha!

Obama rakes in soul-crushing amounts of money from Goldman Sachs, and the media does not say a word... but sure.... this is worse. Uh-huh.

clown.

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Exactly how much money does it take to crush a soul?

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"Obama rakes in soul-crushing amounts of money from Goldman Sachs,"

I think you misspelled Clinton and the Clinton Foundation.

GS has given between $1M and $5M to the Clinton Foundation, the same range as a couple hundred donors like Boeing, and significantly less than others like Coca-Cola. https://www.clintonfoundation.org/contributors?category=%241%2C000%2C001%20to%20%245%2C000%2C000&page=2

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Unrelated, totally off-topic question. I wondered if the following observation could be considered an example of "marginal thinking": If I were to go vegan, it would not alter the number of animals slaughtered because consumption habits are not enough to signal a market change.

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Without a Chief Economic Advisor, who could possibly decide how big the stimulus should be, and back it up with the kind of incredibly accurate forecasts of its effects that previous presidents have relied on?

One answer would be to install a dartboard in the oval office with various GDP projections on it. If it makes people feel better, we can put a bust of Lord Keynes beside it. Better keep it away from the Churchill bust, though.

There is a chief economic advisor who handles issues like how big the stimulus should be. It's Gary Cohn, director of the National Economic Council.

Also, Churchill and Keynes had an amicable relationship for the most part.

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We have the federal reserve research staffs and NBER as academic arms of civil society. NEC has a clear policy purpose. CEA is duplicative.

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Things have been pretty unpredictable as per yet, it will be very interesting to see how it all shapes up. I would be really closely watching it all, as I believe it’s how we can get good results as trader. I am lucky to be part of broker like OctaFX, as through them, I can do it all with ease and confidence because of the low spreads at 0.1 pips for all major pairs, high leverage up to 1.500 and even the daily market news update helps in pretty big way.

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