Analysis: Bush post may not appeal to economists

By SHIHOKO GOTO, UPI Senior Business Correspondent  |  Dec. 1, 2004 at 3:50 PM
share with facebook
share with twitter

WASHINGTON, Dec. 1 (UPI) -- Rumors abound that President Bush is having a hard time finding qualified candidates to join his economic team. Yet as the trade and budget deficits balloon while the dollar slumps, and oil prices continue to climb, this could be when the White House needs to get the best and brightest on board to keep the economy afloat.

Granted, even the most ardent Bush critics have largely welcomed the latest nomination, the administration's naming of cereal giant Kellogg's chief executive Carlos Gutierrez as Secretary of Commerce.

Gutierrez is "one of the most respected business leaders in the community", and getting him on board demonstrates that Bush is able to get some top executives to join the cabinet, said Fariborz Ghadar, director of Pennsylvania State University's center for global business studies.

Nevertheless, some analysts fear that Gutierrez may be the exception to the rule, and that the pool of corporate leaders and high-powered economists that might replace John Snow as Treasury Secretary, or follow in the footsteps of Gregory Mankiw as head the Council of Economic Advisers, or succeed Stephen Friedman as Bush's chief economic adviser by serving on the National Economic Council from fear of Bush's management style.

"There's serious concern among the economics community that this is not an administration that encourages dissent. But economic dissent is very important to the formation of sound economic policy," argued John Mayo, an economics professor at Georgetown University's business school.

Certainly, that seemed to be the case in Bush's first term, when the chief White House economist Lawrence Lindsey was booted out after discussing a potential costs of the war in Iraq that far exceeded the official estimate, and Treasury Secretary Paul O'Neill was shown the door for not keeping strictly on message.

The ousting of Lindsey and O'Neill were seen as politically driven, and to be fair, political sackings are not unique to the Bush administration. But the problem now is that issues confronting U.S. growth prospects are not only deeply rooted, they actually did not exist when Bush first took office, namely the ever-increasing budget and trade deficits, and the rapid weakening of the greenback. And while even the Republicans now acknowledge that the twin deficits are a problem, many economists are worried that the president will not want to take firm steps to reverse the trend and instead continue to overspend and depend on foreign investors keeping up U.S. asset prices.

The president "needs to hear what those dangers might be...but there's concern that he won't want to hear dissent," and instead base his economic policy on "narrow, simple ideology," Georgetown's Mayo said.

Certainly, despite the fact that the federal deficit continues to increase, and Congress had to approve a raising of the debt cealing to record levels, the Bush administration seems adamant to cut taxes further even though military and security spending continue to rise.

But concerns about not having their voices heard and not having enough influence over the president may not only be the reason for some people to turn down offers from the White House. There have been reports that James Poterba, an economist at the Massachusetts Institute of Technology turned down the CEA job, as did Stanford University's John Cogan to direct social security reform, from fear their views would not be taken into full consideration by the administration.

However, some argue that it's not fair to blame Bush for being turned down by some candidates because of his management style.

"Working with Bush would only be difficult for an executive who doesn't understand the concept of 'team'," said Bette Price, a certified management consultant and head of the Price Group. "Bush has incredibly strong leadership traits which actually make him easier to work for; he's focused, consistent, has a clear vision, and clearly states it."

Another key factor for business executives in particular to shy away from a government position would be the scrutiny they have to face before Congress and the fact that working in the public sector will mean battling with bureaucracy, according to some analysts. It also means a significant cut in paycheck.

"You need Senate confirmation, and go through a grueling explanation of what assets you own...the salary's peanuts...the schedule is grueling," Penn State's Ghadar said, but pointed out that such problems were not unique to the Bush administration.

Still, there is no doubt that the current White House is more driven by ideology on the economic, as well as political and diplomatic fronts. As such, both economists and business leaders who join Bush's team may have to share the administration's vision more than their predecessors.

Related UPI Stories
Trending Stories