Yesterday's Detroit Free Press and today's Raleigh News & Observer ran an op-ed by Mitu Gulati and me on the desirability of Obama and McCain telling us who they would choose to be their Secretary of the Treasury. This is closely related to our article on presidential candidates naming their key people in advance of the election, which Eugene and I blogged about in July. Anyway, here is the op-ed:
In TV's "The West Wing," President Jed Bartlet was a Nobel Prize-winning economist.
In real life, our presidential candidates are not experts in economic principles. So when they keep getting asked what exactly they would do to manage the biggest financial meltdown since the Great Depression, their responses are fairly vague.
The result is that voters cannot determine how well each candidate would chart a desirable course through this crisis. (Different groups will define "desirable" differently, putting all the more emphasis on knowing exactly how each new administration will make regulatory policy.)
The identity of key appointees — in particular, the Secretary of the Treasury — is enormously important. Congress appears to be on the verge of granting stunningly broad powers to the Treasury Secretary, authority that his predecessors never dreamed of. News outlets are already speculating about who the next Treasury secretary will be, but why should we have to rely on speculation?
The candidates should tell us now whom they plan to pick. And while they're at it, identifying their prospective chairman of the Council of Economic Advisers would also help.
If we had those names, then we might be able to obtain some valuable information. Maybe Barack Obama would announce, for example, that he would choose to bring Robert Rubin and Larry Summers (President Clinton's team) back to Washington. If he told us that, we could look to see how Rubin-Summers dealt with the Asian crisis of the late 1990s, which involved decisions about bailouts and systemic risk too.
In John McCain's case, what if he told us that he planned to tap John Taylor, the former undersecretary of Treasury who dealt with the effects of the Argentine crisis some eight years ago? Again, bailouts were contemplated then and so were policies to deal with the risk of financial contagion. Or maybe McCain would pick Carly Fiorina, who dealt with difficulties of a different sort at Hewlett-Packard?
The point is if we have concrete names, we can make informed decisions about which of these candidates would do a better job with the economy.
None of this is going to be as much fun as talking about Bristol Palin's pregnancy or her high school boyfriend's Facebook page. But while gossip is fun, many of us are concerned about what is happening in the economy. And at least some of us would give our vote to the candidate who picked the best secretary of Treasury.
We realize that the candidates themselves might not want to tip their hands. Candidates may prefer to be vague in their pronouncements. And being able to promise the prospect of a high-level cabinet position to a variety of people is a good way to keep them all working hard during the pre-election process. So what can we do to induce such revelation?
We should simply ask, and when given vague answers, we should push. In the current era where candidates engage in online discussions with voters and answer questions sent via YouTube videos, maybe we can ask them this question enough times so that failing to answer becomes a problem. Plus, if one answers, that might give him an advantage — the first mover will be perceived as more innovative.