Alan S. Blinder - Advice and Dissent: Why America Suffers When Economics and Politics Collide

Economists offer lots of policy advice, most of which politicians routinely reject even though it would improve the quality of economic policyand in consequence, the economy suffers. What may be a surprise is that many of these rejections of good policy advice are done for good reasons.

The solution, to the extent there is one, requires changes from both economists and politicos. Economists must change how they conceptualize issues, frame policy prescriptions, and deliver advice. Politicians need to improve their understanding of basic economics, and use it more as a guide to good policy and less as a tool for political spin. Neither is easy, however, because of the radically different civilizations from which economists and politicians hail. Plainly put, neither group understands the other. This book is an attempt to bridge the gap.

then consider how most economists, at least progressive ones, decide what constitutes good economicsan approach I call hard-headed but soft-hearted. These few pages are the proselytizing part of the book.

Precious few politicians, whether of the left or the right, think like economists, however. And of course, it is the politicians, not the examine how the dominance of politics over economics plays out in three critical policy domains: international trade, income inequality, and tax reform. In each case, I explain how the clash of civilizations has produced either paralysis or movement in the wrong direction. This dysfunction, I argue, is not random. It follows logically from the factors underpinning the Lamppost Theory.

The good news, such as it is, comes in the final three chapters. There I search for remediesor rather, for palliatives that might narrow the gap and make the collisions less severe. A brief summary is that we need to put more economics into politics, and put more political savvy into economics. But Ill be much more specific than that.

The ideas offered in this book have been germinating in my mind for over forty years. During a long career of teaching economics to beginning students, writing hundreds of op-ed columns (lately for the Wall Street Journal), advising many politicians and several presidential campaigns, serving on President Bill Clintons original Council of Economic Advisers, and then as vice chairman of the Federal Reserve Board, Ive watched Washington closely, both from the outside and the inside. And Ive drawn a number of conclusions, which I share here.

Part of the books message, especially , is a lineal descendant of a book I published about thirty years ago: Hard Heads, Soft Hearts: Tough-Minded Economics for a Just Society (Addison-Wesley, 1987). In planning for this book, I reread that one, and there was little I wanted to retract. But there was much to add because Hard Heads was written before I was ever immersed in official Washington. While my economic attitudes have barely changed over the last thirty years, my political attitudes have undergone several transformationsthe latest thanks to Donald Trump.

After mentioning our forty-fifth president, I should perhaps make my personal politics clear. I have always considered myself center-left in the American political spectrum. If there was still such a thing as a Rockefeller Republican, I might be one. But there isnt, so Im a longtime Democrat. I want to emphasize, however, that my intent here is not to draw a line between center-left Democrats and center-right Republicans. Fine distinctions like that hardly matter. Instead, I want to explain why most economists reject the far right as mean-spirited and the far left as naive.

Yes, Donald Trump receives much criticism in these pages. But thats mainly because I try to illustrate enduring principles with fresh examples. The truth is that this book was planned and partly drafted before I ever imagined that Trump would be elected president. The central ideas long predate Mr. Trump and will outlast him by many years.

Yogi Berra was right: you can observe a lot just by watching. When youve been thinking about something for over forty years, your intellectual debts pile upmany of them unrecognized. (Where did I first get that thought?) My accidental teachers include famous public figures like Bill Clinton (for whom I worked) and Alan Greenspan (with whom I worked), a long list of politicians and journalists, a few political scientists and commentators, and even some economists.

In preparing this book, I benefited specifically from literally hundreds of helpful comments from (in alphabetical order) Henry Aaron, Ben Bernanke, Joseph Blasi, Barry Bosworth, Gary Burtless, Philip Friedman, Michael Froman, Carol Graham, Bradley Hardy, John Hudak, Joseph Kennedy, Aaron Klein, Don Kohn, Robert Lerman, Avi Lerner, Ephraim Liebtag, Ofer Malamud, Norman Ornstein, Eswar Prasad, Jamie Raskin, Jonathan Rauch, Richard Reeves, Alice Rivlin, Howard Rosen, Leslie Samuels, Isabel Sawhill, Alan Schwartz, Philip Wallach, Vin Weber, David Wessel, and Cliff Winston. I thank them all and hold them blameless for any errors.