Chicago Booth economics professor and self-proclaimed “Chicago guy” Austan Goolsbee will be leaving Chicago for Washington, D.C., this January, President-elect Barack Obama announced last week. Goolsbee will request a leave of absence from the Chicago Booth, where he has served since 1995.
Obama designated Austan Goolsbee as chief economist and staff director of the Presidential Economic Recovery Advisory Board, a newly created body. Goolsbee was also appointed to the Council of Economic Advisors (CEA), which develops much of White House economic policy.
Chaired by former Federal Reserve Chairman Paul Volker, the new advisory board will provide the president with economic advice from voices he might not otherwise hear. During a press conference last week, Obama cited the need for an objective, external body of advisors from outside the “echo chamber” of Washington, D.C. He said the board will “provide that perspective to me and my administration, with an infusion of ideas from across the country and from all sectors of our economy.” The board is modeled on a foreign intelligence advisory board created by President Eisenhower.
In an interview this week, Goolsbee said that he will act primarily in a support role and as the liaison to the government for the new board. He also thinks that his two new jobs will interact in important ways.
“It does strike me that the CEA, whose role is to provide objective economic analysis, will play a role with the board. That’s why they put me on both,” he said.
Goolsbee said that he will be in a position to communicate the advisory board’s questions and concerns to the CEA for further study.
“It seemed hard to turn this down at a moment like this,” Goolsbee said.
Goolsbee said he is particularly excited to work with Volker, whom he got to know during the campaign.
“That’s going to be a real pleasure; I couldn’t turn down working with him. If there’s one person whose views you’d want to get now, he’s the most respected guy,” he said.
An expert on tax policy, public policy, and the Internet, Goolsbee describes himself as a “data-driven economist, an empirical guy,” an approach that he will bring to the new administration. In addition, he has experience explaining economic questions to non-economists, as a columnist for Slate and The New York Times, and as the host of History’s Business on The History Channel.
“We’ve certainly seen in previous crises that it’s quite important to explain things to non-experts. The American people can confront any challenge if they’re comfortable with the approach,” he says.
In addition to his academic work, Obama cited Goolsbee’s notoriously “fresh face”—Goolsbee is only 39—and non-Washington background as assets to his new role. Goolsbee confirmed that he will look outside of Washington to academia for insights and guidance.
“I want to tap into the collective knowledge and wisdom of the whole economic profession,” Goolsbee said. “There are researchers not on Washington’s radar screen that have fabulous knowledge.”
Goolsbee has been a prominent face in the Obama campaign, and has advised the President-elect on economic issues since his 2004 Senate campaign. Introducing Goolsbee in last week’s press conference, Obama said that Goolsbee is “one of the economic thinkers who has most shaped my own thinking on economic matters.”
Before the creation of the new advisory board, it was widely speculated that Goolsbee would be appointed chair of the CEA. Obama appointed University of California Berkeley economist Christina Romer, whom Goolsbee actually brought into the campaign, as chair of the council.
But back in 2004 when he was contacted by an Obama staffer desperately seeking economic advisors for an aspiring senator, Goolsbee only knew Obama as “Michelle’s husband who was a state senator.” When after months of e-mails and phone calls, the two finally met face to face at a debate between Obama and Alan Keyes, Obama was surprised by Goolsbee’s youthful appearance.
When Goolsbee introduced himself, Obama said, “You don’t look like a professor! And what’s a ‘goolsbee’ anyway?”
Though Goolsbee insists that he is “not a Washington guy,” colleagues are not surprised by his political achievements. Dean of the Booth School of Business Ted Snyder noted Goolsbee’s interest in public policy issues.
“Goolsbee has his pulse on the nexus of issues concerning what is right for the economy in the long run and what policies can be adopted now to move the country forward,” he said.
Economics professor James Heckman, a Nobel laureate in economics, worked with Goolsbee when he was an undergraduate at Yale University and served on the faculty committee that reviewed Goolsbee’s work for his master’s degree in economics, a degree Goolsbee received concurrently with his bachelors in 1991.
“He was politically oriented even then, and in his thesis. He has an ability to get down to the essence of questions, and to get past trivia,” Heckman said.
Though he is interested in political questions, Heckman said Goolsbee is not an ideologue.
“The good thing about Austan that makes him distinctive from a lot of economists, here and elsewhere, is that he’s open to ideas and experiences,” he said. “He doesn’t have a point of view that would be frozen in the face of evidence to the contrary. There’s an open quality about him, and it seems like Obama has that as well.”
But Goolsbee said he intends for his political career to be a short one. He and his wife recently purchased and renovated a house in Hyde Park and are looking forward to living there when they return.
“The normal term of a CEA member is a two-year term; the advisory board is currently authorized for two years, and normal University practice is a two-year leave without giving up tenure. We’ll be back in two years,” he said.