President Obama has appointed Princeton University economics professor Alan Krueger to replace the departing Austan Goolsbee as head of the White House Council of Economic Advisors.
So should we be encouraged? Afraid not.
Here's what Professor Krueger is famous for:
- A thoroughly debunked (and thus infamous) study asserting that raising the minimum wage caused employment to increase. Not only was this "finding" contrary to all common sense and normal economic analysis, it was rebutted several times by several different research economists.
- Another study asserting that public school students who transferred to private schools through the use of a voucher program showed no discernible educational improvement, and that "the provision of vouchers in New York City probably had no more than a trivial effect on the average test performance of participating black students.” Again, this is contrary to virtually all other research on the impact of moving disadvantaged students from dysfunctional public schools to private schools.
- Championing a 5 percent value-added tax (VAT) on top of the existing income tax system that he thinks would raise $500 billion in new revenue on top of the existing system, as if somehow the entire economy would continue to produce output at the same level regardless of such a significant increase in the marginal tax rate on labor and capital.
- Designing the "cash for clunkers" program wherein $3 billion in taxpayer dollars was spent (borrowed?) for the purpose of advancing car sales forward in time by a few months.
- Advocating that governments stop measuring performance by GDP and instead measure by National "Well-Being" Accounts (NWBA), which would attempt to quantify things like how tired Americans are, or whether they feel happy, worried, or hostile. Now, we can understand why the Obama administration might want to stop talking about GDP, but . . .
Cecelia Rouse, his colleague at Princeton, says "he will be a voice for more investments."
Higher taxes, government mandates, and more borrowing and spending in the guise of “investment?” Measuring feelings rather than real economic output?
Sounds more like a slasher movie than a recovery program.
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Today's TaxByte was written by IPI President Tom Giovanetti