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Home , Austan Goolsbee, Christina Romer

THE MAGAZINE OF INTERNATIONAL ECONOMIC POLICY 220 I Street, N.E., Suite 200 Washington, D.C. 20002 Phone: 202-861-0791 View from the Beltway Fax: 202-861-0790 www.international-economy.com [email protected] Democratic Scorecard

By Owen Ullmann

If Biden wins, who’ll be his brain trust?

s the contest for the group of accomplished and thought- A President Biden is most likely Democratic presiden- ful but iconoclastic outsiders, some of to turn to a strong bench of officials tial nomination moves whom would have struggled to win from the Obama and Clinton admin- to a conclusion, party istrations. His list for chairman of strategists and consul- “This was not a nomination the Council of Economic Advisers or Atants are busy putting together lists of National Economic Council director candidates who are likely to fill the top race based on ideology. It surely would include , Cabinet and spots should was one based on insiders who served as chief economist to former Vice President , Biden when Biden was vice presi- the all-but-certain nominee, defeat representing the ruling elite dent. Bernstein’s successor, Benjamin President Donald Trump this fall. vs. the outsiders,” Harris, also could be a contender. Biden’s choices for senior eco- , who was President nomic jobs will be mostly familiar observed Rob Shapiro, ’s CEA chairman, is names from recent Democratic ad- a senior economic adviser mentioned frequently by strategists as ministrations. That should please the to numerous Democratic a candidate for NEC director, head of Washington establishment, which the Office of Management and Budget, had feared Senator Bernie Sanders presidential nominees. or a senior position at the Treasury of Vermont would ride his populist Department. “Furman is trying to be movement to the nomination and vic- confirmation by the Senate—even a available for any campaign except tory over Trump in November. Democratic-controlled one. Sanders’ and has contacts with all” the A President Sanders surely would “This was not a nomination race former candidates, said one strategist. have assembled the most unconven- based on ideology. It was one based “He would be a natural candidate for tional brain trust in modern times on insiders representing the ruling NEC chair or possibly Treasury.” to underscore his upset victory as a elite vs. the outsiders,” observed Rob Gene Sperling, who held top revolution against the Washington Shapiro, chairman of Sonecon LLC economic jobs in the Clinton and establishment, which pulled togeth- consulting firm and a senior econom- er to rescue Biden from the edge of ic adviser to numerous Democratic Owen Ullmann is TIE’s executive defeat. The Sanders team included a presidential nominees. editor.

6 THE INTERNATIONAL ECONOMY WINTER 2020 The Short List for Top Jobs

Jared Bernstein Benjamin Harris Jason Furman Gene Sperling CEA chair or CEA chair or CEA chair, Top economic Top economic NEC director NEC director OMB head, or job job Treasury post

Pete Buttigieg Elizabeth Michael Jamie Dimon Fred Hochberg Key White House Warren Bloomberg Treasury Commerce or Cabinet post Top post such as Treasury, Treasury Commerce, or Fed chair?

Lily Batchelder Peter Henry Betsey Heidi Crebo- Lael Brainard Senior Top economic or Stevenson Rediker Top candidate Top economic or Administration financial post Top economic or Top economic or for Fed Chair financial post post financial post financial post or Treasury Secretary

Diana Farrell Jerome “Jay” Larry Summers Roger Ferguson Top economic or Powell Return as Fed Fed Chair Fed Chair Fed Chair financial post Second term as Chair? Fed Chair?

WINTER 2020 THE INTERNATIONAL ECONOMY 7 View from the Beltway

Obama administrations, is report- Two candidates whom party in- Gates, who served as Defense secre- edly in play for a top job should siders say Biden could tap as Treasury taries in the Obama administration, Biden win. Another possibility is secretary are Massachusetts Senator to come back. former Obama CEA Chair Austan Elizabeth Warren, who dropped out Fred Hochberg, president of Goolsbee, who had openly advised of the presidential race on March 5, the Export-Import Bank through- former South Bend Mayor Pete and JPMorgan Chase CEO Jamie out Obama’s presidency and a Dimon. Democratic fundraiser, is a natural On Fed Chair Jay Powell, Warren’s selection would help fit for Commerce Secretary, accord- there is a divergence bring the progressive wing of the ing to some strategists. party behind Biden, but her an- Lily Batchelder, deputy director of opinion. ti-corporate views could produce of the NEC under Obama and now an ugly reaction in the markets and an NYU law professor, is frequently Buttigieg. Goolsbee could be re- fraught relations with business lead- mentioned as someone who might cruited by Biden now that Buttigieg ers. Dimon would have the opposite win a promotion to a bigger job un- has folded his campaign and pro- problem: His appointment would be der a President Biden or Bloomberg. vided a timely endorsement that cheered by Wall Street but alienate In addition, strategists are helped propel Biden to a surprising the Sanders and Warren populist keeping an eye on economist Peter sweep of ten primaries on “Super wings of the party. At the same time, Henry, an African American and for- Tuesday,” March 3. Biden and a new administration faced with mer adviser to Obama who recently Buttigieg share many of the same mopping up the economic dam- stepped down as dean of NYU’s left-of-center positions, so Goolsbee age caused by the pandemic would school of business. He would be “probably would be in play if Biden find a traditional banker like Dimon eligible for any number of top eco- gets the nomination,” the strategist more appealing than Warren. nomic or financial posts. Likewise, said. And Biden noted that Buttigieg Biden also is likely to offer at Betsey Stevenson, an Obama ad- could wind up with a senior post if least one Republican a Cabinet post, ministration economist at the Labor Biden moves into the Oval Office— most likely Defense or Treasury. If Department and CEA, is a possible possibly a key White House staff job he wanted to send a strong signal of candidate for a return appointment. or a Cabinet post such as secretary bipartisanship in the wake of a dis- Another candidate in line for a of Housing and Urban Development ruptive and polarizing Trump pres- promotion is Heidi Crebo-Rediker, or a new position to prepare for the idency, he could ask Utah Senator who was appointed as the State next pandemic in the wake of the Department’s first chief economist coronavirus crisis. “Lael Brainard would by then-Secretary of State Hillary Former New York Mayor Mike Clinton. Crebo-Rediker previous- Bloomberg, who dropped out of be highly regarded for any ly served as a top adviser to the the Democratic race after a dismal top position. She’s Senate Finance Committee on in- Super Tuesday performance (his ternational finance and economic $200 million of ad spending in the offended nobody. issues. “Heidi is in big with Biden fourteen contests produced a victory She is a non-controversial and is in play for undersecretary of only in American Samoa) also could international affairs at Treasury or end up with a top job in a Biden choice for Fed chair.” another top sub-cabinet job,” said administration now that he has en- one strategist. dorsed the former vice president and Mitt Romney—the only Senate One name mentioned most fre- vowed to spend whatever it takes to Republican to vote for Trump’s quently as a highly regarded of- defeat Trump. Treasury secretary is removal from office—to take ficial in line for a big job is Lael a natural fit, assuming Bloomberg Treasury, given Romney’s business Brainard, currently a governor on can accept not being the ultimate background. In an equally symbol- the Board. She boss and Biden promises him a lot ic move, he could urge General Jim served as Obama’s under secretary of independence. Bloomberg also Mattis, who resigned from Trump’s of the Treasury for international could wind up as an ambassador to Cabinet over major policy differ- affairs, and is widely considered China, U.S. Trade Representative, ences, to return to that job. Biden qualified for any number of senior Commerce Secretary, or president also might ask two old friends, posts because of her background, of the World Bank. Republicans and Bob including the prospect of becoming

8 THE INTERNATIONAL ECONOMY WINTER 2020 View from the Beltway

the nation’s first female secretary of has been withering in his public at- said one former official. “I could see the Treasury. tacks on the Fed chief for failing to that happening if Biden, Bloomberg, “Lael Brainard would be a top slash interest rates faster and more or Klobuchar is elected. Warren and candidate for Fed Chair or Treasury sharply, particularly after the virus Sanders are unlikely to re-appoint Secretary,” predicted a senior outbreak. Trump has lamented that him. They will want someone who Washington consultant. “She might Powell is one of his worst selections. is a dove on monetary policy but have to suffer through a year as The question is whether a will ramp up bank regulation.” Deputy Treasury Secretary before Democratic president would stick Powell “has done a good job getting the job. An outside possibili- with Powell, a Republican who has and withstood tremendous pressure ty is she could get pushed to USTR.” won high praise from just about ev- from Trump,” said another former “Brainard is definitely someone eryone except Trump for doing an Fed official. “It would be good sym- to keep an eye on,” added another excellent job guiding the economy bolism for a Democratic president in the midst of a trade war and now to re-appoint him, underscoring Biden also is likely to offer a burgeoning crisis over the corona- that the Fed chair is not a partisan virus. Or will a President Biden opt position.” at least one Republican a to put his own person in the critical If Sanders moved into 1600 Cabinet post, most likely economic post? Pennsylvania Avenue, “all bets are On that issue, there is a diver- off” on who would have filled his Defense or Treasury. gence of opinion. Many strategists sensitive economic jobs, said a se- say a Democratic president should nior economic consultant. senior consultant. “Others include choose their own person when Most likely, Sanders would have former U.S. Trade Representative Powell’s term expires in February turned to proponents of Modern Michael Froman, Heidi Crebo- 2022, absent a full-blown crisis that Monetary Theory, which contends Rediker, Jason Furman, and Diana would require continuity at the Fed. that the government can finance Farrell,” who was Obama’s first dep- They note there are plenty of top- unlimited government programs uty NEC director and now serves as notch candidates: Brainard; Janet by printing money. “Bernie found CEO of the think tank JPMorgan Yellen, who served as chair for four economists who argue that Medicare Chase Institute.” years before being passed over by for all would be so cost-effective “Lael Brainard would be high- Trump in 2018; former CEA Chair it would increase the economic ly regarded for any top position,” Christina Romer; former Treasury growth rate and pay down the na- a third consultant noted. “She’s of- Secretary Larry Summers, who has tional debt,” the consultant said. fended nobody. I would be surprised long coveted the job, and former Fed Among the economists in if she didn’t get some top position. Vice Chair Roger Ferguson, who Sanders’ orbit who might have won She is a non-controversial choice for is now CEO of the giant teacher’s Fed chair.” retirement fund TIAA-CREF, and A former senior official at the would be the first African-American Sanders would have turned Fed praised Brainard in her current to hold the central bank’s top job. to the left-leaning position for showing “courage and Bloomberg also is a possible candi- distinguishing herself in refusing to date for Fed chair. Economic Policy Institute. go along with overzealous banking Replacing Powell is unpopu- deregulation efforts pushed by the lar with several former senior offi- appointments to the Fed or Cabinet Comptroller of the Currency and cials at the Fed who served during is Stephanie Kelton, a former aide FDIC.” both Democratic and Republican to the senator who is now at Stony Choosing a candidate to fill administrations. They argued that Brook University. She is the au- the top Fed post would be one a Democratic president should re- thor of The Deficit Myth: Modern of the most important decisions appoint Powell to underscore the Monetary Theory and the Birth of the next president would have to non-partisan nature of the job. the People’s Economy (2020). make. Current Chair Jerome “Jay” “I’d love to see Powell reap- “The Deficit Myth empowers Powell’s four-year term ends in ear- pointed, as occurred when Alan readers to break free of the broken ly 2022, and if Trump is re-elected, Greenspan and were thinking and fictitious constraints he almost certainly will refuse to nominated by Republican presidents that have been holding our nation re-nominate him. After all, Trump and re-appointed by Democrats,” back,” she says on her website.

WINTER 2020 THE INTERNATIONAL ECONOMY 9 View from the Beltway

“Deficits can help us fight a myr- sweeping Green plan. While the Sanders brain trust iad of problems that plague our Another expert in the field is is largely out of step with Biden’s economy–-inequality, poverty and Carol Zabin of the University of views, the former vice president , climate change, California-Berkeley, where she di- may have to enlist some of them and housing, health care, and more. But rects a green economy program. embrace a few of their ideas as the we can’t use deficits to solve prob- Other economists identified with price for winning Sanders’ all-out Sanders include Darrick Hamilton, support in the fall. While the Sanders a jobs policy specialist who is exec- To be sure, there is a long way to utive director of the Kirwan Institute go before we have a President-elect, braintrust is largely out of for the Study of Race and Ethnicity and fortunes of wannabe Cabinet step with Biden’s views, at Ohio State University, and Sarah members will rise and fall before Anderson, program director for the the new chief executive has to start the former vice president Institute for Policy Studies. The in- making picks. Until then, rumors stitute describes itself as “a progres- will keep flying—such as one that may have to enlist some of sive think tank dedicated to building Facebook COO Sheryl Sandberg them and embrace a few a more equitable, ecologically sus- may wind up with a top job in a tainable, and peaceful society.” Democratic administration, despite of their ideas as the price A group of economic advisers Facebook’s chronic controversies. for winning Sanders’ all-out assembled by Warren would have Then there are the prospects that gravitated to a President Sanders presidential also-rans will wind up in support in the fall. rather than to Biden, since both the Cabinet of their one-time rival for candidates support a controver- the party’s nomination: Remember lems if we continue to think of the sial “wealth tax” on the richest Obama’s surprise choice of Secretary deficit itself as a problem.” Americans (Sanders’ tax starts on of State ? Would the Sanders also would have turned a net worth over $32 million). The policy-savvy Warren be better suited to some familiar economists who economists include two professors to run Health and Human Services share his views, many of them asso- at Berkeley who have tracked in- rather than Treasury for President ciated with the left-leaning Economic come inequality around the world: Biden? Perhaps former presiden- Policy Institute founded in 1986 by Emmanuel Saez, who is a French Lester Thurow, Robert Reich, Ray American, and Gabriel Zucman, Choosing a candidate Marshall, Robert Kuttner, Barry who is French. Bluestone, and Jeff Faux to find ways Warren also relied on MIT econ- to fill the top Fed post to improve economic opportunities omist Simon Johnson, a British would be one of the most for low- and middle-income workers. American, who would appeal to Reich, who now teaches at the Sanders. He served as chief econo- important decisions the University of California-Berkeley, mist at the International Monetary next president would served as President Clinton’s sec- Fund in 2007–08 and is affiliated retary of Labor and served on with the Institute for New Economic have to make. President-Elect Obama’s transition Thinking, which says its purpose is advisory board. He could get a big to challenge “conventional thinking tial candidate Andrew Yang, who job under Sanders. and advance ideas to better serve endorsed Biden on March 10, be- In addition to Reich, well-known society.” comes Education Secretary or White and top-notch left-leaning econo- Another MIT economist, House tech czar. And Senators Amy mists Sanders might have tapped Jonathan Gruber, was enlisted by Klobuchar (MN) and Kamala Harris are Nobel laureate , Warren to advise her on health poli- (CA), who endorsed Biden, might a professor at Columbia University cy issues. He was a key architect of be chosen as Biden’s vice presiden- who served as chair of the CEA un- “Obamacare”—the Affordable Care tial running mate or attorney gener- der Clinton, and Jeff Sachs, also at Act, and the Massachusetts health al. Remember, Biden promised to Columbia, where he specializes in care plan on which ACA was mod- choose a woman as his running-mate sustainable policies. eled. He would have played a role in and a proven campaigner makes the Sachs likely would have been helping a President Sanders draft his most sense. enlisted to help implement Sanders’ Medicare-for-All plan. Stay tuned. u

10 THE INTERNATIONAL ECONOMY WINTER 2020