So here come the fights between left and center about Joe Biden’s cabinet picks. Some of these fights will be worth having. Rahm Emanuel for transportation secretary? Seriously? After all the controversies that took place during his mayoralty, and all his denunciations of “libtards” when he worked for Obama? I suppose he can’t do much harm at the Department of Transportation, but: why? There must be a dozen people who are better suited to the job and wouldn’t needlessly provoke progressives’ ire.
Also: Deval Patrick at the Justice Department? Again, why? Patrick showily floated himself as a moderate, anti-Elizabeth Warren Massachusetts presidential contender last year before deciding not to run. Sally Yates and Doug Jones are both obviously superior, baggage-free choices (baggage-free from a Democratic point of view, that is; how Republicans may feel about them is a different matter). It’s one thing to choose people the base isn’t crazy about, because that’s life; you win some, you lose some. But it’s entirely another to go out of your way to antagonize the base, which choosing Emanuel and Patrick would do. If Patrick’s plus column includes his race, he’s hardly the only qualified Black contender.
But for my money, if you’re a liberal who cares first and foremost about economic policy, there are three big positions to watch: head of the National Economic Council (NEC); chair of the Council of Economic Advisers (CEA); and head of the antitrust division in the Justice Department. Who Biden chooses for these three posts—and his reported pick for CEA is promising—will tell us a lot about how aggressive he’s going to be on matters like reducing inequality, promoting public investment, and breaking up monopoly power that define an administration’s core economic philosophy.
What’s the difference between the NEC and the CEA? It’s explained well here. The CEA is the older entity, started under Harry Truman. It’s essentially what its title says—a group of economists who give the president economic advice. The NEC, started by Bill Clinton, takes that advice and formulates policy. So the NEC is more powerful, generally speaking. The famous story from the Obama era is that during the transition, Christine Romer, whom Obama picked to chair the CEA, wrote a paper for internal consumption arguing that the stimulus package should be as big as $1.8 trillion. Larry Summers, who’d been tagged to head the NEC, nixed it (and a lower $1.2 trillion figure) as having no chance of passing Congress. Even before they took office, in other words, the NEC director had the power to take information from the CEA chair and decide what the president would or would not see.
So the NEC director is the more important position, but both are really crucial to establishing any administration’s economic thrust and identity. And of course the most important of all is treasury secretary, where Biden’s choice of Janet Yellen is terrific.
The Wall Street Journal reported Sunday that Biden intends to name Cecilia Rouse to head the CEA. Rouse is from Princeton and would be the first Black woman to head the CEA. Larry Mishel, a labor economist with the Economic Policy Institute, described her to me Sunday evening as a solid choice—like him, she’s a labor economist, which means by definition that her academic interests centered around wages and poverty and education.
In addition, the Journal reported that Jared Bernstein and Heather Boushey will sit on the council, and they’re both solid progressives. Finally, Neera Tanden will be the first woman of color to head the Office of Management and Budget. These are all people who believe in government intervention in the economy and aren’t going to be howling at the president about deficit reduction. So this is all good news. The priorities of this group will tend much more toward full employment than austerity. “There’s going to be more emphasis on workers under Biden than any president in my lifetime,” Mishel says.
Adds Jesse Rothstein, an economist at Cal-Berkeley: “All three CEA nominees have worked extensively on issues that will be of direct relevance—Rouse on community colleges and on student loans (in a paper I coauthored with her); Boushey on paid leave and automatic stabilizers; Bernstein on deficits and full employment. That’s not what you’d see in a ‘normal’ CEA, where people are plucked out of academia for short stints in Washington.”
Then, late Sunday, after this column was written, news broke that Biden was leaning toward Brian Deese to head the NEC. I don’t know a lot about him. He works at BlackRock, which isn’t great on paper, although his position there involves sustainable investing. He played a central role on the Paris climate accord, and he was a key player in the auto bailout. And he worked for Gene Sperling, who was among the more liberal of Obama’s economic advisers. We’ll see what happens, but the good news is that if all these conjectures are correct, Biden has named an economic team that includes some progressives and has no domineering centrist banker to push the liberals around.
Now—antitrust. The monopoly power of the big tech companies is only the most visible manifestation of a disease that has taken over so many sectors of the economy, from hospitals to telecommunications to food systems to—my favorite micro-example, as noted by Sarah Miller in Democracy journal, which I edit—cheerleading equipment and uniforms, which are controlled by Varsity Brands, which in turn is owned by Bain Capital, the private equity company whose founders included Mitt Romney and whose employees included Deval Patrick.
Monopolies don’t just increase prices, although they certainly do that. They make inequality worse because they drive down wages, since there’s less competition among employers for workers. Miller cited a study that found that “an individual worker’s average wages would be $10,000 higher today if the government had ensured markets were as competitive as they’d been in 1980.”
Finally, monopolies are bad for democracy. You don’t have to look any farther than the pernicious role Facebook plays in our elections to see that.
So in some ways I’m more interested in who heads the DoJ’s antitrust division than who heads the department itself. If the Republicans keep the Senate, we’re going to be putting more and more hope in things that can be done administratively. Aggressive antitrust policy is one of those things in a major way.
There are other important positions. U.S. Trade Representative and the head of the Consumer Financial Protection Bureau come to mind. It’s unrealistic to think liberals are going to fill every position. But Biden should definitely be bolder than Obama was.
Liberals today are critical of Obama and Clinton for being too “neoliberal” in their economic philosophies. It’s a confusing word in this context, because it really means free-market conservative for various historical reasons that are too complicated to go into. But that was then. The economics profession is changing, and inequality is much more central to economic discussions than it used to be.
And one of the many lessons these election results taught us is that a lot of voters don’t get the Democrats’ economic message and don’t trust them to be good economic stewards, even though history says otherwise. Biden says, and I think he means it, that he’s on the side of the middle and working classes. He needs to hire an economic team that will prove it, and so far, he’s on his way.