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Home , Economic policy, Sherry Glied, Steve Hanke

The Making of Economic in the White House

Spring 2020 Simon Bowmaker Tuesdays and Thursdays [email protected] 11:00 am - 12:15 pm Office: KMEC 8-58 Office Hours: Wednesdays 2:00 pm - 4:00 pm Telephone: (212) 998-0478 Course Description

This course shows students how economic policy gets made, and should get made, at the highest levels of federal . It draws upon almost fifty years of economic policymaking, and the challenges that have confronted the men and women who have sat in positions of power in the Treasury, the Office of Management and Budget, the Council of Economic Advisers, and the National Economic Council. These challenges include the breakdown of the and the transition to a predominantly floating world, the era of rampant , the collapse of the Soviet Union and the transition to , the shock of 9/11, the financial crisis of 2008 and the Great that followed, as well as the war of 2018/2019.

Lectures and discussions will lead to in-class exercises, in which students will role-play as advisors to US presidents. What is it like to sit in the Oval Office and discuss policy with the president? To know that your input into his decisions will impact millions of people? To know that the wrong advice could be calamitous? Students will learn how to analyze policy problems and design solutions, taking into account the multi-dimensional aspects of making federal policy and the many constraints upon those decisions, including those of Congress.

As part of the learning process, students will also have the opportunity to hear from guest speakers who have worked at the very top of economic policymaking in the branch of government.

Pre-requisites

Microeconomics

Economics of Global Business

Reading

Simon W. Bowmaker, When the President Calls: Conversations with Economic Policymakers, MIT Press (2019)

The schedule below also contains additional recommended readings to supplement this text.

Assessment

Class participation: 35%

Midterm: 40%

Group role play: 25%

Course Website

I will maintain a website for the course using NYU Classes. The website will include announcements and downloadable files with the class lectures.

Classroom Norms

Laptops, cell phones, Smartphones and other electronic devices are a disturbance to both students and professors. All electronic devices must be turned off prior to the start of each class meeting. Moreover, all electronic devices must be out of sight when we have a guest speaker in class.

Class participation

I strongly encourage students to participate in class by answering questions that I pose and by posing questions of their own. In the evaluation, quality is more important than quantity. In addition, the evaluation of class participation could be affected adversely by lack of attendance or creating negative classroom (see Classroom Norms above).

Ethical Guidelines

All students are expected to follow the Stern Code of Conduct: (http://www.stern.nyu.edu/uc/codeofconduct) A student’s responsibilities include, but are not limited to, the following: 1. A duty to acknowledge the work and efforts of others when submitting work as one’s own. Ideas, data, direct quotations, paraphrasing, creative expression, or any other incorporation of the work of others must be clearly referenced. 2. A duty to exercise the utmost integrity when preparing for and completing examinations, including an obligation to report any observed violations.

Students with Disabilities

Students whose class performance may be affected due to a disability should notify me immediately so that arrangements can be made in consultation with the Henry and Lucy Moses Center for Students with Disabilities http://www.nyu.edu/csd/ to accommodate their needs.

Course Schedule and Readings (to be completed before class) Tuesday, January 28: Introduction

Bowmaker, Simon W. (2019), ‘Introduction,’ When the President Calls: Conversations with Economic Policymakers, MIT Press, pp. 1-6.

Thursday, January 30: The Presidential Establishment

Brianne Gorod (2019), ‘The Need for Congressional Oversight Goes Far Beyond Impeachment,’ The Atlantic. https://www.theatlantic.com/ideas/archive/2019/09/future-congressional-oversight-risk/598996/

Tuesday, February 4: The Treasury, CEA, OMB, and NEC

Porter, Roger B. (1997), ‘Presidents and : The Council of Economic Advisers,’ American Economic Review, Papers and Proceedings, Vol. 87, No. 2 (May), pp. 103-106.

Porter, Roger B. (2017), Remarks from “The Council of Economic Advisers: 70 years of advising the president.” https://www.brookings.edu/opinions/remarks-from-the-council-of-economic-advisers-70-years- of-advising-the-president/

Thursday, February 6: The Evolution of the American Presidency

John Dickerson (2018), ‘The hardest job in the world,’ The Atlantic. https://www.theatlantic.com/magazine/archive/2018/05/a-broken-office/556883/

Tuesday, February 11: Guest Speaker (Brad Setser)

Brad W. Setser is the Steven A. Tananbaum senior fellow for at the Council on Foreign Relations. His expertise includes , global capital flows, financial vulnerability analysis, sovereign debt restructuring, and the management of financial crises. Dr. Setser served as the deputy assistant secretary for international economic analysis in the U.S. Treasury from 2011 to 2015, where he worked on Europe’s financial crisis, policy, financial sanctions, commodity shocks, and Puerto Rico’s debt crisis.

He was previously the director for international economics, serving jointly on the staff of the National Economic Council and the National Security Council. Dr. Setser was an international affairs fellow at the Council on Foreign Relations in 2003, and a fellow from 2007 to 2009. He also has been the director of global research for Roubini Global Economics and a visiting scholar at the International Monetary Fund. He holds a BA from , a master’s from Sciences-Po, and an MA and PhD in from Oxford University.

Thursday, February 13: The Presidency of Richard Nixon

Bowmaker, Simon W. (2019), ‘Richard Nixon Administration,’ When the President Calls: Conversations with Economic Policymakers, MIT Press, pp. 9-39.

McCracken, Paul W. (1996), ‘Economic Policy in the Nixon Years,’ Presidential Studies Quarterly, Vol. 26, No. 1, pp. 165-177.

Tuesday, February 18: The Presidency of Gerald Ford

Bowmaker, Simon W. (2019), ‘Gerald Ford Administration,’ When the President Calls: Conversations with Economic Policymakers, MIT Press, pp. 41-57.

Moran, Andrew D. (2011), ‘More than a Caretaker: The Economic Policy of Gerald R. Ford,’ Presidential Studies Quarterly, Vol. 41, No. 1, pp. 39-63.

Thursday, February 20: Guest Speaker (Amias Gerety)

Amias Gerety is a Partner at QED Investors. Most recently, he served as President Obama’s nominee and as Acting Assistant Secretary for Financial Institutions at the Department of the Treasury. In that role, he was the lead advisor to the Secretary on affecting financial institutions. He also oversaw a number of programs focused on supporting small business lending and community development. He previously served as the Deputy Assistant Secretary for the Financial Stability Oversight Council, an interagency group of financial regulators charged with monitoring and mitigating potential threats to financial stability.

Prior to his eight-year career at the Treasury, Mr. Gerety was a management consultant at Oliver Wyman. He also served in a number of policy roles and worked in East Africa for Save the Children. Mr. Gerety is a recipient of the Alexander Hamilton award, the Treasury’s highest honor. He graduated Magna Cum Laude from Harvard University with a BA in Social Studies.

Tuesday, February 25: Role Play (Nixon and Ford)

Thursday, February 27: The Presidency of Jimmy Carter

Bowmaker, Simon W. (2019), ‘Jimmy Carter Administration,’ When the President Calls: Conversations with Economic Policymakers, MIT Press, pp. 59-111.

Tuesday, March 3: Guest Speaker (Steve Hanke)

Steve H. Hanke is a Professor of at The . He is a Senior Fellow and Director of the Troubled Project at the , a Senior Advisor at the Renmin University of China’s International Monetary Research Institute in Beijing, a Special Counselor to the Center for Financial Stability in New York, a contributing editor at Central Banking in London, and a contributor at Forbes.

In the past, Professor Hanke taught economics at the and at the University of California, Berkeley. He served as a Member of the Governor’s Council of Economic Advisers in Maryland in 1976 – 77, as a Senior on President Reagan’s Council of Economic Advisers in 1981 – 82, and as a Senior Advisor to the Joint Economic Committee of the US Congress in 1984 – 88.

Professor Hanke served as a State Counselor to both the of in 1994 – 96 and the Republic of in 1999 – 2003. He was also an Advisor to the Presidents of in 1997 – 2002, Venezuela in 1995 – 96, and in 1998. He played an important role in establishing new currency regimes in Argentina, , Bulgaria, Bosnia‐Herzegovina, , Lithuania, and Montenegro. Professor Hanke has also held senior appointments in the of many other countries, including , Kazakhstan, the United Arab Emirates, and .

Thursday, March 5: Guest Speakers (David Kamin and Michael Pyle)

David Kamin is Professor of Law at School of Law. His scholarship focuses on budget and policy. Prior to joining NYU, Kamin worked in President Obama’s administration from 2009 to 2012. There, he served as Special Assistant to the President for Economic Policy at the White House, working to coordinate tax and budget policy. Prior to that, Professor Kamin worked as special assistant, and later adviser, to the Director of the US Office of Management and Budget. He has also worked at the Committee for and the Center on Budget and Policy Priorities, focusing on deficit projections, tax legislation and social security reform in those positions. Professor Kamin earned a BA in Economics and , with highest honors, from Swarthmore College, and in 2009, he earned a JD, magna cum laude, from NYU School of Law.

Michael Pyle is Global Chief Strategist for BlackRock, leading the Investment Strategy function within the BlackRock Investment Institute (BII). Prior to joining BlackRock, Mr. Pyle served for five years at the center of President Obama’s economic team. Most recently, he worked at the White House as a Special Assistant to the President for Economic Policy, following roles earlier in the Administration at the Treasury Department and the Office of Management and Budget. In these capacities, Mr. Pyle advised the president as well as every member of his senior economic team, and he participated first-hand in many of the most significant international and domestic economic policy challenges of President Obama’s first term in office—including the Administration’s response to the Eurozone crisis, its management of the US-China financial and economic relationship, its design and passage of the landmark health reform law and the economic recovery act, and its overall approach to US fiscal and budget policy.

Mr. Pyle began his career as a law clerk to the Hon. Merrick B. Garland of the US Court of Appeals for the DC Circuit. Mr. Pyle graduated with a degree in economics summa cum laude from Dartmouth College, where he was salutatorian of his class and recipient of the Nelson A. Rockefeller Prize as the top graduating student in economics, and earned a law degree from Yale Law School. He also studied graduate economics and law at Cambridge University as a Keasbey Scholar.

Tuesday, March 10: Midterm Review Session

Thursday, March 12: Midterm

No classes on Tuesday, March 17 and Thursday 19 (Spring Break)

Tuesday, March 24: The Presidency of

Bowmaker, Simon W. (2019), ‘Ronald Reagan Administration,’ When the President Calls: Conversations with Economic Policymakers, MIT Press, pp. 113-169.

Thursday, March 26: Richard Berner (Guest Speaker)

Richard Berner is Clinical Professor of Management Practice in the Department of Finance, and, with Professor Robert Engle, is Co-Director of the Stern Volatility and Risk Institute. He served as the first director of the Office of Financial Research (OFR) from 2013 until 2017, and he was counselor to the Secretary of the Treasury from April 2011 to 2013.

Professor Berner was a managing director, chief US economist at Morgan Stanley from 1999 to 2011 and co-head of Global Economics from 2008 to 2011. He was executive vice president and chief economist at Mellon Bank, and a member of Mellon’s Senior Management Committee (1992-99).

Previously, he served as a principal and senior economist for Morgan Stanley, as a director and senior economist for Salomon Brothers (1985-91), as economist for Morgan Guaranty Trust Company (1982-85) and as director of the Washington, DC, office of Wharton (1980- 82). Professor Berner served on the research staff of the Federal Reserve in Washington (1972-80). He received his bachelor’s degree magna cum laude in Economics from Harvard College in 1968, and his PhD in Economics from the University of Pennsylvania in 1976.

Tuesday, March 31: Role Play (Carter and Reagan)

Thursday, April 2: The Presidency of George HW Bush

Bowmaker, Simon W. (2019), ‘George HW Bush Administration,’ When the President Calls: Conversations with Economic Policymakers, MIT Press, pp. 171-219.

Tuesday, April 7: Guest speaker to be confirmed

Thursday, April 9: The Presidency of

Bowmaker, Simon W. (2019), ‘Bill Clinton Administration,’ When the President Calls: Conversations with Economic Policymakers, MIT Press, pp. 221-355.

Tuesday, April 14: The Presidency of George W Bush

Bowmaker, Simon W. (2019), ‘George W Bush Administration,’ When the President Calls: Conversations with Economic Policymakers, MIT Press, pp. 357-493.

Thursday, April 16: Role Play (Bush 41 and Clinton)

Tuesday, April 21: Sherry Glied (Guest Speaker)

Sherry Glied is Dean of New York University’s Robert F. Wagner Graduate School of Public . From 1989-2013, she was Professor of and Management at Columbia University’s Mailman School of Public Health. She was Chair of the Department of Health Policy and Management from 1998-2009.

On June 22, 2010, Professor Glied was confirmed by the US Senate as Assistant Secretary for Planning and Evaluation at the Department of Health and Human Services, and served in that capacity from July 2010 through August 2012. She had previously served as Senior Economist for health care and labor market policy on the President’s Council of Economic Advisers in 1992-1993, under Presidents Bush and Clinton, and participated in the Clinton Health Care Task Force. She has been elected to the National Academy of Medicine, the National Academy of Social Insurance, and served as a member of the Commission on Evidence-Based Policymaking.

Professor Glied’s principal areas of research are in health policy reform and mental health care policy. She holds a BA in economics from , an MA in economics from the University of , and a PhD in economics from Harvard University.

Thursday, April 23: Peter Orszag (Guest Speaker)

Peter Orszag is CEO of Financial Advisory at Lazard Freres & Co LLC. Dr. Orszag previously served as the firm’s Head of North American Mergers & Acquisitions and Global Co-Head of Healthcare. Before joining Lazard in May 2016, he was Vice Chairman of Corporate and Investment Banking and Chairman of the Financial Strategy and Solutions Group at Citigroup, Inc.

He previously served as the Director of the Office of Management and Budget in the Obama Administration from January 2009 until July 2010. From January 2007 to December 2008, Dr. Orszag was the Director of the Congressional Budget Office.

Dr. Orszag graduated summa cum laude in economics from Princeton University and obtained a Ph.D. in economics from the London School of Economics, which he attended as a Marshall Scholar.

Tuesday, April 28: The Presidency of

Bowmaker, Simon W. (2019), ‘Barack Obama Administration,’ When the President Calls: Conversations with Economic Policymakers, MIT Press, pp. 495-597.

Thursday, April 30: Role Play (Bush 43 and Obama)

Tuesday, May 5: The Presidency of Donald Trump

Bowmaker, Simon W. (2019), ‘Donald Trump Administration,’ When the President Calls: Conversations with Economic Policymakers, MIT Press, pp. 599-628.

David R. Henderson (2019), ‘Trump’s Economic Policies: An Assessment, Part 1,’ Defining Ideas, Hoover Institution. https://www.hoover.org/research/trumps-economic-policies-assessment-part-1

David R. Henderson (2019), ‘Trump’s Economic Policies: An Assessment, Part 2,’ Defining Ideas, Hoover Institution. https://www.hoover.org/research/trumps-economic-policies-assessment-part-ii

Thursday, May 7: Role Play (Trump)