So Barack Obama has named economist Jason Furman of the Brookings Institution as his top economic adviser. Very interesting pick. Already, liberal activists are in a tizzy because of his contrarian positions on some policy issues. Here is what I can tell you about Furman. (I have spoken with him on several occasions, and several conservative economists I know think highly of him.)
1) Furman is no protectionist. He understands the benefits that open trade brings America, such as low-priced goods at Wal-Mart and the intense competition that leads to innovation. The Hamilton Project, the program he ran at Brookings, is all about making sure the benefits of trade are more widely dispersed and the losers from trade taken care of—not scrapping NAFTA or the World Trade Organization. Here is what Furman told me back in 2007:
Jason Furman, director of the Hamilton Project, a centrist economic group, thinks there will be plenty of China-bashing rhetoric and talk of trade barriers—like one proposal to slap a 27.5 percent tariff on Chinese goods because of the weak yuan--over the next few years, not to mention a pause in new trade agreements. But in the end, he speculates, Democrats will mostly push for greater social insurance, such as vastly increased unemployment benefits. "Social insurance," he says, "can lead to a more dynamic society by letting people feel more comfortable taking risks."
Here is something else I wrote about Furman:
In the past, I have differentiated—using an idea stolen from economist Jason Furman at the Hamilton Project-between "pretax Democrats," who want to alter the trade environment such as reopening NAFTA, and "after-tax Democrats," who want to mostly deal with any negative trade effects after they happen, such as through an expanded social insurance program that might include wage insurance for displaced workers.
In other words, Furman would rather see expanded unemployment insurance, wage insurance, and more education for workers rather than trade barriers to protect their jobs. Unions tend to dismiss those sorts of policies, "burial insurance."
2) Furman is also skeptical about a major pillar of economic thought in the Democratic Party, that the past three decades have been terrible for workers because of "stagnant wages." He sees it as intellectually dishonest to ignore healthcare and retirement benefits when doing that calculation, as well as the falling price of everything from computers to airline tickets.
3) Furman also sees the value in a low tax rate with few deductions and is in favor of Charlie Rangel's proposed corporate income tax cut. This from a Washington Post op-ed:
We should consider tax reform in the classic 1986 mode: lower tax rates and broaden the tax base by limiting special exemptions. Both halves of this classic equation have the potential for helping the economy by eliminating the perverse incentives to invest in tax-favored activities rather than in more economically productive activities.... The centerpiece of [Rangel's] corporate tax reform is a reduction of the corporate tax rate from 35 percent to 30.5 percent .... Without adding to the deficit burden, this rate reduction would be fully paid for by a series of measures to broaden the corporate tax base to ensure that different forms of investments are taxed at similar rates.
Obama, by the way, has been ripping John McCain's plan to cut corporate taxes and is true believer in the myth of stagnant wages.