Economic Report of the President together with The Annual Report of the Council of Economic Advisers
by The Council Of Economic Advisors
Government Printing Office, 448 pages, $34.50
The Employment Act of 1946 committed the federal government to the pursuit of “maximum employment, production and purchasing power,” a commitment whose cash value has fluctuated drastically from time to time. It also established the Council of Economic Advisers (CEA), to be appointed by the president in order to provide him with objective economic analysis and advice contributing to the achievement of those goals.
In its early years the CEA stuck close to the central macroeconomic issues of “employment, production and purchasing power.” Inevitably, as the economy itself, and the federal government’s involvement in it, became more complicated, the CEA took on a much wider range of issues of economic analysis and policy. Today it functions as a sort of all-purpose economic consulting firm with only one client, the president. It is pretty small, as consulting firms go: the chairman and two members are still appointed by the president and confirmed by the Senate, and the professional staff numbers just twenty-one, including research assistants. The effectiveness of the CEA depends almost entirely on the extent to which each president wants to hear what the best analytical and empirical research has to say about the hot issues, and on the chemistry between the CEA chairman and his client, the chairman at present being R. Glenn Hubbard, who is on leave from the Columbia University economics department. Somehow I do not see George W. Bush as actually panting for those closely argued memos, but I hope I am wrong.
This year’s Economic Report runs to 300 pages of text, including many expository tables and graphs, plus fifteen or so pages of administrative detail, and roughly 125 pages of precious “Statistical Tables Relating to Income, Employment and Production,” most of them including data going back as far as the mid-1950s. They are not everything you always wanted to know about the US economy, but they are a lot of it.
The text itself has to walk a very thin and winding line. The three members and many of the senior staff are on temporary leave from university posts. In a few years they will go back to their departments, their teaching, and their research. They do not want to say dumb things in public, to look like fools to their students, their academic colleagues, and themselves. But they are working for the president now. No matter what they tell him in internal memos—we’ll never know—they have to follow the party line in the Report. Even if this or that favorite presidential idea or policy proposal is pointless or wrongheaded—and it has been known to happen—the Report has to take it seriously, in fact solemnly, and argue for it with whatever ingenuity can be scraped together. Nor can the CEA afford to be coyly noncommittal; the political hacks and ideologues in the White House are watching every word.
The 2002 Report has a few good moments and some bad moments, but mostly it has bland moments …