Former Chair of the Bush Administration Council of Economic Advisors (CEA), Gregory Mankiw, now back at Harvard, talks about economics and economic policy making in this Fortune interview: "Economist Greg Mankiw Sounds Off on Karl Rove, Paul Krugman, and More".
On who does what in the White House, and clear lines of authority:
Q: Have you had any substantive conversations with Democrats about any of this [about Social Security issues - Ben]?
A: No.
Q: Did you offer to talk to them when you were at CEA—make it clear to them that you're available?
A: I'm personally happy to talk to anybody, but in the White House there is a division of labor. CEA does economic analysis. The primary point of contact between the White House and the Hill is legislative affairs. What the President doesn't want or need is different parts of the White House negotiating on a freelance basis. Any White House needs clear lines of communication with the Congress.
Coordination and the atmosphere at the CEA:
Q: What did you like and hate about the policymaking process in Washington.
A: What I liked most was being part of a team united by common purpose. Every morning, I had the 7:30 am meeting with [White House chief of staff] Andy Card, [former senior adviser and current White House deputy chief of staff] Karl Rove, [former National Economics Council chair] Steve Friedman, and the rest of the White House senior staff. What I liked was being the coach of 35 economists, assistants and other staff at the CEA—a really good group of people. I didn't think I would like having such a big staff. I never had that as a professor—just teaching assistants. They were incredibly hardworking and pleasant people. I liked the back and forth of ideas. It was a really close-knit group. I'll miss my staff.
Q: The challenges?
A: Waking up every day to get to a 7:30 am meeting.
How is economic policy coordinated with the different departments?
The policy process worked extremely well. It's not like one person sits there—like Karl Rove sits off all by himself making economic policy, or Dick Cheney sits all by himself making economic policy. It's a very formal process where deputies meet, talk to their principals, then principals meet, everyone from [former U.S. Trade Representative and current deputy Secretary of State Bob] Zoellick to [Labor Secretary Elaine] Chao to [former Commerce Secretary Don] Evans, when I was there. Then meetings with the president. We all give different points of view, and the president makes a call. It's a well-run decision making process—the way it should work.
Q: You felt there was a healthy exchange of ideas and perspectives?
A: Yes. Absolutely.
Does the political, or the legislative, staff have more influence on policy?
Q: It was a collaborative process?
A: It [economic policymaking - Ben] was very collaborative. Look, Karl Rove is a very reasonable guy. I was absolutely delighted that he got the job as deputy chief of staff. He knows his stuff. Some political folks see policy as a way of getting political things accomplished. That's not Karl Rove. He's motivated a lot by good policy. He has a vision of what the party should be doing. He was one of my favorite people in the White House. I didn't come in expecting to think that. I thought he'd be a political guy who'd push policy in a bad direction for political reasons. I left the White House having great respect for Karl.
As far as influencing policy is concerned, a much bigger influence than the political group was the legislative affairs shop. The legislative affairs people would often come in telling us, we know that this is good policy, but you'll never get that through Congress. So the constraint, to the extent there was a political constraint, it wasn't from Karl's shop, it was from Congress.
Was the President engaged in policy making?
Q: What about this characterization that the president is passive in these policy deliberations, like the claims in Ron Suskind's book The Price of Loyalty: George W. Bush, the White House, and the Education of Paul O'Neill? (the book's website is here: "The Bush Files: Economy ").
A: I've never met [former Treasury Secretary] O'Neill. I arrived after he left, so we never attended any of the same meetings. But in the meetings I attended, the President was always very engaged. When I had briefings with the President, I wasn't worried the President was going to sit there stone-faced. I was worried about the President interrupting me before I got to the points I wanted to make. He's very involved. He asks lots of questions. One of my staffers who briefed him on an issue came out saying he's just like a CEO. He asks, what's the issue here, what are the decision points, what are the constraints? It's not at all like the descriptions you hear from the O'Neill book. And, at the other extreme, it's not like the Clinton Administration, where they'd discuss one issue for hours, have a kind of seminar; this is more like a company.
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