Bush appoints Schmalensee to CEA
By David P. Hamilton
In a move likely to reinforce MIT's institutional stature, President George Bush last Monday nominated Richard L. Schmalensee '65 to the Council of Economic Advisors. Schmalensee is professor of economics in the Sloan School of Management.
If the nomination is confirmed by the Senate, Schmalensee will serve on the three-member board that makes economic recommendations to the president.
Schmalensee, who is a registered Democrat from Brookline, said he was excited to learn of the appointment. "I hope to go down to Washington and provide intelligent input," he said.
Describing himself as "ideologically colorless," Schmalensee contrasted his economic pragmatism with the "true believers" who populated the council under former President Reagan. "I'd characterize myself as coming in with the tools to solve problems, rather than promoting a grand strategy," he said.
Schmalensee, 45, has not been active in politics, and said he had no relationship with any members of the Bush Administration beyond professional "high regard" for his fellow economists. His only government experience was a summer job at the Council of Economic Advisors in 1967, he told The Boston Globe.
Although the council operates differently under each administration, Schmalensee said he thought the chairman, Stanford economist Michael Boskin, would take the traditional approach of dividing responsibility among the council's members. John Taylor, a macroeconomics specialist from Stanford, will probably take charge of economic forecasting and monetary policy recommendations, while Boskin will take public positions on fiscal and tax policy.
Since issues such as regulatory incentives and the effect of antitrust laws on joint ventures have comprised the bulk of Schmalensee's recent research, his background is likely to lead him into policy areas such as minimum wage, industrial regulation, and international competitiveness, he said.
Schmalensee said he thought the council would be much more active under Bush than it was under Reagan, when its advice was often ignored. "The council is out of the doghouse in this administration," he said.
Given the negative tenor of Bush's presidential campaign, in which he repeatedly attacked the intellectuals of Brookline and Cambridge, the irony of his appointment has not escaped Schmalensee. "It's ironic, but encouraging," he said. "It shows he's looking for good people, without a strong ideological litmus test."
Schmalensee currently holds the Gordon Y. Billard chair in management and economics, which was last held by Lester C. Thurow, now dean of the Sloan School of Management.
According to the Globe, Schmalensee's appointment was praised by economists of all persuasions, with the exception of an individual from a conservative think tank who complained that the Bush administration was "too colorless from an ideological point of view" and that the new appointment was similarly bland.