Hot Economists

The recession has created some unlikely celebrities: economics is suddenly the sexy profession. Here are the 10 biggest stars, and whether they agree with Obama that there is new reason for hope.

Carrie Devorah, WENN / Newscom

Carrie Devorah, WENN / Newscom


The MIT professor and former chief economist of the International Monetary Fund caused a splash with “ The Quiet Coup,” an article in The Atlantic arguing an irrational faith in Wall Street caused the financial crisis, prompting government to push business elites to regulate themselves. “In a society that celebrates the idea of making money, it was easy to infer that the interests of the financial sector were the same as the interests of the country—and that the winners in the financial sector knew better what was good for America than did the career civil servants in Washington,” Johnson wrote. He explained that the government can't truly correct its mistake until it nationalizes insolvent banks and breaks them up.

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University of California at Berkeley professor and former Clinton Treasury official Brad DeLong emerged this month as a cautious but vocal defender of Timothy Geithner’s plan to rescue the financial sector. DeLong has offered a handy FAQ that dissects the administration’s proposal to subsidize private investors to buy up the toxic assets now wreaking havoc on banks’ balance sheets. But he's hardly an optimist on the current economy. “I wouldn't call them 'glimmers of hope,' I would call them 'glimmers of additional risk,'” he told The Daily Beast. “One possibility is that the second quarter will be flat in output (and see employment declines) and the third quarter will see output growth (and employment steady). The other possibility is that firms have now decided that they have to fire workers on a much larger scale in order to survive the depression, and that the 'glimmers of hope' are the start of this process.” He put the odds at “better than 50 percent” that we'll see a second major stimulus program and bank nationalizations by September.

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Son of the famed economist John Kenneth Galbraith, who helped manage economic policy for President Roosevelt during World War II, James Galbraith has argued that we need a return to the New Deal’s Keynesian policies to overcome the recession. He recently testified before the Senate to discuss lessons from the New Deal, which he defended from a sudden revival of right-wing revisionism that Roosevelt actually prolonged the Great Depression. Galbraith believes Obama's massive deficits should help weather the storm for now, but says unemployment remains the economy's biggest problem and shows no signs of letting up. “Stabilization would be better than free-fall. But stabilization is not recovery,” Galbraith told The Daily Beast. “A return to positive output growth without job growth would be cause for relief, perhaps, but not celebration.”

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Even though Paul Krugman knocked The Daily Beast in his blog (apparently he viewed our gallery of Sizzling G-20 Wives” as slightly frivolous coverage of the most important economic summit in world history), the Nobel laureate still deserves a spot on the list. After all, how often do you see an economist on the cover of Newsweek? Krugman boosted his credibility by predicting the housing collapse well before many other economists. Despite belonging solidly to the left, Krugman has arguably become Obama’s most dangerous critic. He warned that the administration’s stimulus package was too small and wrote that the bailout could lead to “ financial policy despair.” He recently cautioned against putting too much stock in the latest wave of optimism from the White House, given that the Great Depression saw mini-rallies on the way to a trough that was mistaken for a recovery.

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Harvard professor Martin Feldstein served as Ronald Reagan’s chief economic adviser. So what’s he doing on Obama’s Economic Recovery Advisory Board? While politicians on the right have pushed for such unlikely scenarios as a government spending freeze, Feldstein prefers to combat the crisis through any means necessary. Recently he surprised observers by suggesting that the recession is likely to continue well into 2010, a more pessimistic assessment than many other economists. Breaking with conservative Republicans, Feldstein predicted “a need for another fiscal stimulus package at some point” to offset the decline.

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A former Clinton adviser and chief economist for the World Bank, Nobel laureate Joseph Stiglitz has for years been a leading critic of international policy toward failing economies. Now that the U.S. is facing a similar crisis, Stiglitz is yet again attacking the government’s response. In a New York Times op-ed, he described Timothy Geithner’s bailout plan as “a win-win-lose proposal: the banks win, investors win—and taxpayers lose.” Stiglitz says the proposal distorts the value of banks’ toxic assets while placing heavy risks almost entirely on the taxpayers’ backs, making it ultimately unproductive.

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After granting an interview to the Financial Times, Obama recently bragged he “read the Financial Times before other people read the Financial Times.” That’s in no small part thanks to its longtime chief economic commentator, Martin Wolf, who has called for an active fiscal response from governments around the world to weather the global recession. In one recent column, he described global stimulus plans as “disturbingly modest” and called on the G-20 to devise a more aggressive spending plan at their conference. Wolf argues that the world is currently “on a ,” which he says “might be better than none, but it is not good enough.”

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In times of economic crisis, attention often turns for solutions to countries that have faced similar problems in the past. One example is Japan, whose economic collapse in the 1990s has for years been the focus of Adam Posen’s research. Posen, who serves as deputy director of the Peterson Institute for International Economics, has written that America needs to learn from Japan’s example and quickly mark down toxic assets at failing banks to deal with their problems out in the open.

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Nicknamed “Dr. Doom” for his bleak economic predictions, Nouriel Roubini’s early recognition of the coming economic crisis turned him into, as the Wall Street Journal put it, “the nearest thing to a rock star among the economists who hold our fate in their hands these days.” Roubini, a professor at NYU’s Stern School of Business, is one of the leading advocates for temporary nationalization to eliminate insolvent banks and quickly restore confidence to the financial sector. True to his nickname, he's not buying into the latest talk of optimism, predicting a decline once worse macroeconomic numbers emerge. "Once people get the reality check, then it's going to get ugly again," Roubini recently told the Associated Press.

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“Tall Paul” Volcker, the 6-foot 7-inch giant of the field, is also one of its most respected economists, having served as chairman of the Federal Reserve under Presidents Carter and Reagan. Obama tapped Volcker to chair his Economic Recovery Advisory Board, but some reports indicate that Volcker has been frustrated that he hasn’t been asked to play a bigger part in crafting White House economic policy. “He wants to have a real role,” one acquaintance recently told New York magazine’s John Heilemann. “If they’re gonna call him an Obama adviser, he wants to really advise. He has no interest in just being window dressing.”