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Are The Obama Wonks Really So Great?

My piece about Obama's wonks seems to have generated a lot of feedback last week (see, for example, Kevin Drum, Ezra Klein, and Matt Yglesias). Since many of the responses raised similar points, I figured I'd address them all at once.

The most common objection is that I deemed Obama's policy shop to be better or more sophisticated than Hillary's, when in fact they take similar (if not identical) positions on maybe 90 percent of the issues facing the country.  

I agree that you see a ton of overlap between Obama's proposals and Hillary's, and I don't think there would be huge domestic policy differences between their administrations. But there would be some. Set aside healthcare, which you already know about. My sense is that Hillary's overall orientation on economics would be slightly more neoliberal than Obama's. If nothing else, I'd bet Hillary would be a bit more attached to Rubinomics--e.g., lowering long-term interest rates by lowering deficits--given what she emphasizes on the campaign trail, and given her proximity to the people who implemented that approach in the '90s. (Though, in fairness, even the architect of Rubinomics is no longer as wedded to the idea as he was in the 90s.)

More importantly, though, a lot of the criticism along these lines misses the point of my piece. My mandate was to explain how the Obama wonks see the world--the thinking being that you probably didn't know much about them--not to sort out whether they're superior to Hillary's. As a result, I wasn't really using Hillary as my foil (at least in the domestic policy portion of the piece); I was using Bill. To wit:

Sociologically, the Obamanauts have a lot in common with the last gang of Democratic outsiders to make a credible run at the White House. Like Bill Clinton in 1992, Obama's campaign boasts a cadre of credentialed achievers. Intellectually, however, the Obamanauts couldn't be more different. Clinton delighted in surrounding himself with big-think public intellectuals--like economics commentator Robert Reich and political philosopher Bill Galston. You'd be hard-pressed to find a political philosopher in Obama's inner wonk-dom. His is dominated by a group of first-rate economists, beginning with Goolsbee, one of the profession's most respected tax experts. A Harvard economist named Jeff Liebman has been influential in helping Obama think through budget and retirement issues; another, David Cutler, helped shape his views on health care. Goolsbee, in particular, is an almost unprecedented figure in Democratic politics: an academic economist with a top campaign position and the candidate's ear. ...

Think of the contrast here as the difference between science-fiction writers and engineers. Reich and Galston are the kinds of people who'd sketch out the idea for time travel in a moment of inspiration. Goolsbee et al. could rig up the DeLorean that would actually get you back to 1955.

The reason Bill's wonks worked well here was twofold: 1.) They were already somewhat familiar to most readers, and 2.) Their approach was very different from Obama's, so they provided a stark contrast. Even so, I wasn't going for a normative comparison so much as a descriptive one. I think both approaches have merits.

Unfortunately, a lot of people read comparisons with Hillary into the piece where they really didn't exist. For example, some complained that Hillary and Obama have very similar approaches on global warming. Fair enough. But the idea wasn't to demonstrate that Obama's approach was superior. It was to make a descriptive point about the Obamanauts--which is that you can be intellectually modest (i.e., not be attracted to sweeping theories), but still ambitious in your policy goals.

A related objection is that I've made Obama's wonks out to be more innovative--or, for those economists out there, more "behaviorial"--than they actually are, regardless of how they stack up against Hillary's team. After all, the one example of a behavioral idea I provided--automatic enrollment in 401(k) plans--is familiar to pretty much every wonk who's attended a Brookings seminar in the last seven years.

There's no question that automatic enrollment is an idea whose time has come in Democratic circles. The reason I used it as an example is that it's easy to explain--both on its own terms, and as something that fell out of behavioral economics. Having said that, there are other behavioral ideas that have made their way into Obama's platform, and which are less familiar in Washington circles. One of them I mentioned in the piece, though I didn't explicitly label it behavioral: It's the automatic tax return, a pet idea of chief economic adviser Austan Goolsbee. (Goolsbee has been pitching the idea for several years now, though John Edwards apparently borrowed it for his 2008 campaign.)

Still, the most interesting behavioral idea I've seen tossed around the Obama campaign is something called "intelligent reassignment." Briefly (and I may be off on a detail or two; I didn't include this in my piece): It turns out that a chunk of the Medicaid population is routed into Medicare Part D (the drug benefit) for its prescription drug coverage. Given that there are hundreds of different drug plans to choose from under Part D, the Bush administration needed some rule for deciding which plan to enroll people in. So what was the rule? As it happens, randomness. The Bushies pretty much randomly select a plan for each "dual eligible" Medicaid patient.  

"Intelligent reassignment" is the Obama alternative, borrowed from an approach used in Maine. (The joke is that it should have been called "intelligent design"--then the Bushies would have jumped all over it.) The idea is that the government would pick the plan that gives the patient the best deal based on their past drug-consumption habits, enroll the person in it, then let them opt out if they want. It's a behavioral approach because it "defaults" people into a basically rational arrangement, whereas when most people see hundreds of different choices, they often don't bother figuring out which one's best for them. (The Obama campaign briefly alludes to this idea here, but doesn't tease out all the behavioral dimensions. Top Obama aides assure me this would be their approach though.)

final objection to my piece is that it doesn't hold up on its own terms--that, despite all the hand-waving, there wouldn't be much difference between an Obama White House and Bill Clinton's. After all, didn't Bill employ a lot of academic economists?

Yes, there's no question he did, and that they were influential. But the composition of your inner circle matters quite a bit, more so than who's generally in your administration or in the next circle out. Clinton did hire people like Joe Stiglitz and Larry Summers. But there was never really a first-rate academic economist in his White House inner sanctum. The Clinton insiders most concerned with the nuts and bolts of economic policy were Robert Rubin, Gene Sperling, and Bruce Reed--all very smart, capable men, but none a trained economist. 

What's the upshot here? Off the top of my head, I'm not sure Clinton would have been as concerned with the deficit, or with deregulating Wall Street, or with bailing out countries whose currencies had collapsed, if Rubin hadn't enjoyed such prominence. (Though you could argue that Rubin enjoyed such prominence because Clinton had cast his lot with deficit reduction. Also, it's possible that an academic economist would have favored the same position on certain issues.) I'm not sure Washington would have been quite as adamant about making foreign economic aide contingent on neoliberal reforms, either. 

I think the closest analogy to what you could expect in an Obama administration would be, somewhat ironically, George W. Bush. Two Harvard-trained economists--Larry Lindsey and Glenn Hubbard--were enormously influential over domestic policy during Bush's first term. Among other things, they drew up his two big tax-cut initiatives. My guess is that Goolsbee, Obama's top economic adviser, would play a similar role, though hopefully he'd use his influence to better effect.

--Noam Scheiber