Alan Krueger: Washington’s New Punching Bag

Obama has tapped Alan Krueger to be his top economic adviser, a thankless job that quickly exhausted two predecessors.

It’s a big day for Alan Krueger. The Princeton economist just landed the most difficult job in Washington.

In a Rose Garden ceremony Monday morning, President Obama announced Krueger as his pick to be the new head of the White House Council of Economic Advisers, the president’s top adviser on the economy. Obama’s close friend, economics professor Austan Goolsbee, held the job prior, and Christina Romer before him—but both returned to academia within a year of steering an economy that just wouldn’t budge.

Krueger has deep ties to Washington. During the Clinton administration’s first term, he was the chief economist at the Department of Labor. Afterward, he took about a decadelong break away from Washington, but immediately after Obama took office in 2009, the new president tapped Krueger as assistant Treasury secretary for economic policy. In that post for the first two years of Obama’s term, he crunched the numbers for many of Obama’s early programs, including the HIRE Act that provided payroll tax breaks and Cash for Clunkers, the rebate system that encouraged people to buy new cars.

Most of the research and counsel he gave Treasury Secretary Tim Geithner in the early days of the administration focused on unemployment, which then hovered close to 10 percent. It’s since come down to 9.1, a number many economists and political operatives still consider too high for a stagnant economy, not to mention Obama’s chances for reelection next year.

In a statement forecasting the nomination, Obama said that Krueger would bring a “wealth of knowledge and decades of experience to the challenge of creating jobs and promoting economic growth.” Yet such tempered remarks may understate the significance of the challenge awaiting Krueger. Obama is faced with putting more people back to work, or at the very least, avoiding a much feared double-dip recession. But there are few options for new stimulus measures due to opposition from Republicans in the House of Representatives who have vowed—many of them even pledged in writing—to block any new government spending on things like infrastructure, education, or energy efficiency.

Still, Krueger has remained upbeat. As a private citizen in March, he penned an editorial for arguing that despite increases in the labor force and sluggish hiring, the unemployment rate would begin to head downward.

“I’m going on record as a contrarian,” he wrote. “I suspect a large rise in the labor force won’t cause the unemployment rate to jump. Instead, I suspect we’re going to see a continuing decline in the unemployment rate, though there surely will be some blips along the way.”

That sort of instinct may come from his seasoned research background. Krueger has devoted a considerable part of his career to looking at trends in unemployment. A 2008 study he conducted at Princeton looked at how people search for jobs, and whether unemployment benefits speed up or slow down a person’s job search (his answer: neither). In a discipline often dry and theoretical, he’s also looked into the whimsical. He’s researched the rise in so-called “interactive” jobs, changes in how people use their time, even the economics of popular music.

Krueger’s predecessor Goolsbee became a public face of the administration during his tenure with Obama. He sat for cable TV interviews and used social media—he employed the “White House White Board” on the administration’s website—to explain complicated economic ideas and trends. A White House official speaking anonymously to not upstage Obama’s remarks told The Daily Beast that Krueger will do the same. His dynamic attitude was also a selling point for Obama. In more ways than one, Krueger will be tasked with making employment statistics fun again.