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Hill economist gets hosannas and hoots
Question of the Day
Thronged by reporters this week, Sen. Kent Conrad of North Dakota suggested that Democrats were growing more confident in President Obama’s tentative tax-cut deal with Republicans — the same accord that threatened to splinter his party 24 hours earlier.
Mr. Zandi, Moody’s Analytics chief economist, has become an oracle of sorts on Capitol Hill, where members of both parties have recited his financial forecasts in an attempt to seize the high ground in battles over stimulus packages, deficit reduction plans and the tax cuts enacted during the George W. Bush administration.
In this case, the 51-year-old gave Mr. Obama and GOP leaders a thumbs up for striking a deal over tax cuts and unemployment benefits, predicting the $700 billion package would more than double the expected pace of job growth — from 1.2 million jobs to 2.8 million jobs — and cut the 9.8 percent unemployment rate to near 8.5 percent.
“To have that analysis available for this discussion I think changed the tenor of the discussion,” Mr. Conrad said Wednesday, noting that Mr. Zandi’s numbers had just been rolled before the Democratic caucus.
Citing Zandi-isms has become a staple of congressional debates over the past two years, though the economist’s rise to prominence is striking.
According to the Congressional Record, the official digest of House and Senate proceedings, Mr. Zandi’s name was cited just two times in the 109th Congress, which ran from 2005 through 2006, and 26 times in the 110th Congress.
But in the 111th Congress, which began in January 2009, his name has been rattled off at least 97 times — more than those of most of his peers. In similar searches, Alan Greenspan, the former chairman of the Federal Reserve, appears 100 times and Paul Krugman, the economist, Nobel Prize winner and New York Times columnist, appears 35 times.
Though a registered Democrat, Mr. Zandi enjoys a bipartisan appeal that others lack. He was an economic adviser to Sen. John McCain during the Arizona Republican’s 2008 presidential bid, a bio point both parties like to highlight. At the same time, he’s a vocal supporter of Mr. Obama’s federal stimulus package, which was adopted by Congress last year and has since been criticized by Republicans for what they consider wasteful spending.
As for the Bush-era income tax cuts, he falls somewhere between the two parties, saying tax cuts for upper-income individuals should be extended for a year and then phased out by 2013. That way, he told The Washington Times last month, the government does not jeopardize the recovery but ensures the revenue source returns to help address the nation’s fiscal woes over the long haul.
“It seems to me that they can look to Zandi as someone who is not identified with being in one political camp or the other, but offering kind of dispassionate economic analysis,” said Richard E. Sylla, a professor of economics at New York University. “The fact that both sides pick up on things he says I think shows that he is a middle-of-the-road guy who is not perceived as being in one ideological camp or the other.”
Mr. Sylla added, “The danger, of course, is they will use whatever he says if it supports their ideological point of view.”
Others have a harsher take.
David Stockman, President Reagan’s budget director, described Mr. Zandi as “the voice of Chamber of Commerce Keynesianism — a mutant strain more insidious and dangerous than the original.”
“There is no project of statist larceny that he hasn’t embraced including the Wall Street bailouts, endless housing boondoggles, credit-card-financed tax cuts of every stripe and the Fed’s Gosplan [Soviet economic planning panel] for destroying savers and the dollar,” Mr. Stockman said. “Worse still, his econometric model has been a serial enabler of Wall Street’s incessant, petulant demands for yet another policy ‘fix’ to goose the stock averages again and again. So, it is not surprising this stuff is popular on Capitol Hill: When you put your quarter in the jukebox, it plays any song you want.”
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