The Fourth of July is just days away, and on the Loop’s crowded streets and plazas, outside the downtown campus of the University of Chicago Graduate School of Business, the city swelters. Upstairs, in an air-conditioned office, Austan Goolsbee is recounting how he was transformed from an economics professor into the senior economic advisor to a candidate for the presidency of the United States.
Goolsbee must pick his words more carefully now, but it’s no great strain for him to tell a good story. The two men met in 2004, after Barack Obama became the Democratic contender for junior U.S. senator from Illinois and the Republicans fielded the perennial candidate Alan Keyes. Though Keyes’s Christian Dominionist views on government and society have long made him unelectable, the Democrats wanted to ensure that Obama could demolish the opposition’s economic platform. So his campaign contacted Goolsbee, whom Obama knew by reputation, from his own years teaching constitutional law at the University of Chicago, as an expert on much that was cutting-edge in economics.
Keyes’s economic plan was to abolish the income tax and replace it with a national sales tax that exempted all housing, food, and transportation purchases as well as the spending of the poor and elderly. What would the sales tax have been for unexempted goods, I ask, if the U.S. government’s operating revenues were to be maintained? About 70 percent, Goolsbee replies, laughing. During 2004, the Obama campaign grew accustomed to calling on Goolsbee’s expertise. The candidate exchanged e-mails with the professor. Still, they had no face-to-face contact. The two finally met in October, during the second debate between Obama and Keyes, at the ABC studio in Chicago.
“I hung in this room outside with Michelle, who was cool,” Goolsbee recalls. Finally, informed that the candidate was ready to receive him, he knocked on the door. “Obama opened the door, looked at me in bafflement, and said, ‘Who are you?’ I said, I’m Professor Goolsbee. Obama said, ‘You can’t be.’” He’d been expecting an older tweed-jacketed academic, not–as Goolsbee claims Obama phrased it–another skinny, tall, youthful, geeky guy with big ears and a funny name.
Goolsbee, now 39, graduated from Yale in 1991, earned his doctorate from MIT in 1995, and in slightly more than a decade has built a remarkably broad résumé, which includes membership in the Panel of Economic Advisors to the U.S. Congressional Budget Office, columns in the New York Times and Slate, a Fulbright scholarship, and even a stint hosting a television show, History’s Business, on the History Channel. As Tyler Cowen, an economics professor at George Mason University and the author of the popular blog Marginal Revolution, says: “Austan Goolsbee is smart.”
Generations of the best and the brightest have come and gone in Washington, DC, usually without effecting significant changes. In this, Goolsbee may or may not turn out to be exceptional. Nevertheless, he is something different in a presidential campaign: he is part of a generation of economists who have focused on the Internet, network effects, behavioral economics, and neuroeconomics. Whether Obama wins or loses, this is the first time a U.S. presidential candidate has had a chief economic advisor whose outlook and skills are those of a 21st-century economist.
Moreover, if Obama does win, 2008 will be a watershed election in American political history for reasons unrelated to the new president’s skin color. For decades, the resident of the White House has been closely associated with the South or Southwest. Now, someone from the intellectual milieu associated with the University of Chicago is a plausible candidate. Along with Goolsbee and other members of this intellectual movement–including Chicago Business School professor Richard Thaler, a founder of behavioral economics, and Cass Sunstein, a former professor at Chicago’s law school–Obama subscribes to a distinctive set of economic theories developed at the university, and to a corresponding set of policy prescriptions. These people are Chicagoans, who–to paraphrase a native son–go at things in their own way, on the basis of first to knock, first admitted. If Obama reaches the White House, they will not be shy about implementing those prescriptions.