Zbiginew Bzdak/Chicago Tribune
When the government released its monthly jobs numbers on April 5th and economists’ predictions were, as usual, absurdly off, a former official in the Obama White House called the disappointing gain of 88,000 jobs “a punch in the gut” (and then blamed the sequester). Four days later, the same man made his regular weekly appearance on Sean Hannity’s show. He tried but failed to defend the President against Fox News’s most relentless Obama basher. Angered by Goolsbee’s attempts to present Obama’s case, Hannity erupted: “You’re on drugs!”
Hannity’s target was 43-year-old Austan Goolsbee, the Waco-born, Whittier, California-raised, Yale- and MIT-educated PhD and former chairman of Obama’s Council of Economic Advisers. Goolsbee is now back at the University of Chicago, teaching economics at the university’s Booth School of Business. He and his wife, Robin Eve Winters, live with their three children in Hyde Park, where the children attend the University of Chicago’s Lab School.
Given his central and early role in the Obama machine—he started helping Obama when he was running for the U.S. Senate—I thought it would be interesting to talk to him. At the least, I wanted an answer to a question that has been bugging me since I started to pay close attention to those monthly jobs stats during the ’08 campaign: Why are economists interviewed in the days preceding the jobs numbers’ release so often so spectacularly wrong?
We talked by telephone last Friday. Here’s an edited transcript of our conversation.
CF: When you were growing up and other boys wanted to be firemen, did you say to yourself, I really want to be an economist?
AG: My dad had a law degree [from the University of Texas, from whence derived Goolsbee’s first name] but worked for his brother’s trucking company; my mom worked for the phone company. They were both huge believers in education and wanted me to look for bigger high schools. I ended up going to Milton Academy outside Boston and from there to Yale and MIT….
As a boy, I was really into math and science…. The college counselor was married to Chip Case of the Case-Shiller Home Price Index. When she asked me what I wanted to be, I said an economics professor. I got to know Chip Case and he drew me into the work of economics, took me to seminars, introduced me to Larry Summers at one of them…. At Yale I took a class from James Tobin, the guy who won the Nobel Prize…. I got to know him, and when he’d go to his house in Northern Wisconsin, I’d stay in his house and take care of his dog. He was a major influence.
CF: Is your wife also an academic?
AG: No, we met in college, but she doesn’t remember meeting me. She went to Harvard Business School and worked at MTV on the business side.
CF: How did you come to know Barack Obama?
AG: It was in 2003 or 2004 and Michelle was the famous one at the university; she had a big and important job at the hospital. We had friends in common [Valerie Jarrett and Marty Nesbitt] and when he decided to run [for the U.S. senate], nobody wanted to help him on policy research. Someone recommended me to Obama’s policy director and he called me and asked if I’d be willing to help. Barack Obama? That’s Michelle Obama’s husband. I didn’t know him, although he was my state senator.
I started writing these policy memos [calculating the costs, for example, of an Alan Keyes proposal to replace the income tax with the sales tax]. At debates, Obama would say, “I had Professor Goolsbee analyze this.” I had still never met him.
At the next debate someone suggested that I go up and meet Obama in the Green Room. Obama himself opened the door: “Who are you?” “I’m Professor Goolsbee.” “You’re Professor Goolsbee? I thought you were 65 years old and had a tweed jacket and beard.”
Early in 2007, he told me he was thinking of running for president and asked if I’d help. I was worried about my research and finding the time. My wife said, “You told me from the first time you met him, this guy was special. If he runs and loses you’ll be kicking yourself.” I did it [with the title senior economic advisor] as a volunteer. I told them not to pay me. “I have a job, put the money in Iowa.” Things really ramped up during the general. I did more than 200 different events—fundraisers, policy speeches, campaign debates. It felt like full-time work.
CF: You went to the White House with Obama serving as a member of his Council of Economic Advisers and then chairman. Rahm Emanuel was there at the same time as Obama’s chief of staff. What was it like working with Rahm?
AG: He would demand of the economic team extensive forecasts. “Tell me exactly what the jobs number will be….” If you got it wrong he would hold it against you for a long time…. There was a senior staff meeting in the Roosevelt Room every morning and Rahm would pound his fist on the table. “Get me the housing plan and have it to me by 5”…. If he wanted a number now, he’d call you on the phone. He could get anybody’s number—their cell phone, their house phone, if you’re visiting your grandma he’d have her number. “Where is that paper?”
CF: Did you fear him, respect him?
AG: He’s a task master everyone respected a lot…. Rahm was obsessed with the invasive Asian carp. If there was a regional conference in Michigan on invasive species, he’d want to know where the Asian carp were. “You get it to me right away.” When Rahm was leaving the White House I gave him a goodbye gift. As a nod to his history of sending dead fish, I bought a dead carp from a seafood distributor, a stinking, nasty fish, couldn’t fit it in our home freezer so I left it overnight in a garbage bag on our porch. I put it in a nice box and drove to the White House for a final senior staff meeting. When the Secret Service went to check my car, the bomb-sniffing dog made a huge noise. ‘What’s in the box?” the agent asked me. “That’s a big dead fish,” I told him, “a going away gift to Rahm.” “Let him through.”
CF: What did Rahm say?
AG: “Fucking dead fish.” His chief of staff told me he said that it was one of more thoughtful gifts anybody’s ever given him.
CF: You’re under paid contract with ABC News. You’re on Hannity’s show about once a week. Are you paid to do that?
AG: No, I’m not a paid contributor…. My view has been that a lot of people watch Hannity’s show. If there’s nobody giving the other side, that’s not good…. I’m used to arguing, I mean, the University of Chicago has a great many conservatives, great diversity, this is the only place where the economics seminar is a full contact sport.
CF: Watching you and Hannity, it seems you’re kind of friends, all that talk about having dinner and taking him to a Bears game. Any of it pan out?
AG: He bet me dinner over the last election and he lost. I had suggested betting a beer but he said, “No a full steak dinner.” I asked him, “Where’s my dinner?” He tried to send me a Ruth’s Chris gift certificate instead, so no, we haven’t had dinner together…. We get along fine…. We have a fun time razzing each other.
CF: When Hannity really starts blasting—the laundry list of stats of Americans suffering in the Obama economy on last week’s show—and denigrates the President, do you get calls from Obama people telling you that you were not aggressive enough?
AG: Administration types seem happy that somebody is out there. It’s awkward for an official administration person to go on to an opinion show and debate. It’s usually like, “finally someone sticking up for our side"…. I get a massive number of hate emails, phone calls, it’s ugly.
CF: So now for the burning question: why are you economists so wrong on economic predictions?
AG: The margin of error is huge. If the prediction is 150,000 new jobs, that’s plus or minus 100,000…. Most [academic] economists are not in the business of forecasting. I have a pretty good track record.
CF: What did you predict on the March jobs numbers?
AG: 148,000 (the actual number, subject, as always, to revision, was 88,000…. I had the distinct feeling is was worse than the market expected.
CF: What do you predict for May?
AG: I fear for the next several months we’re going to see weakness, if the GDP doesn’t grow about two percent or if it gets worse…. I thought it would grow by two and a half percent. Now I think the sequester costs us one half percent of growth rate.
NOTE: In his Who’s Who entry Goolsbee lists as his avocations “snowboarding [and] comedy.” He appears occasionally as a guest of Jon Stewart on The Daily Show.
4 weeks ago