- The Washington Times - Thursday, July 26, 2007

You can tell a lot about presidential candidates by the company they keep and that’s usually true about the economic advisers they have.

The Democratic presidential frontrunners have surrounded themselves with like-minded Wall Street financiers, economists and policymakers. But in some cases, others are thrown into the mix who have radically different ideas. Some of it may be sheer window dressing to appeal to the special interests they need to win the nomination.

New York Sen. Hillary Rodham Clinton is selling herself as someone who believes in expanding trade and opening up markets for U.S. goods, like her husband who pushed the North American Free Trade Agreement. But she counts a fierce leftist opponent of free trade among her advisory panel, former House Democratic leader Richard Gephardt.

Freshman Sen. Barack Obama of Illinois opposed President Bush’s proposed Social Security reforms for personal investment accounts that would have allowed workers to invest some of their payroll taxes in the stock market. Yet one of the Harvard economists on his team likes the idea and has developed a full-blown plan to enact it into law.

Even so, a look at some the other people on their teams gives us a peak into the general direction they would take the economy if they won the presidency. While they’ve carved out more liberal positions over their political careers, urging increased spending, higher tax rates and more restrictive trade policies, some of the advisers are more market-oriented, pro-trade and deficit hawks.



Mrs. Clinton’s advisers are drawn mostly from President Clinton’s economic team. They include former Treasury Secretary Robert Rubin, now a Wall Street financier, former Treasury deputy secretary Robert Altman, who is playing a key policymaking role in her campaign, former White House adviser Gene Sperling and Mr. Gephardt, who also plays an influential role in her thinking.

Democratic economists say her team’s ideological makeup signals an economic policy almost identical to her husband’s: pushing a balanced budget, trade agreements with labor and environment-friendly provisions, and soak-the-rich tax increases. “Her trade policies would probably be very similar to Bush’s trade policies which were similar to Clinton’s. My guess is she would say what she had to say to get labor’s support, but at the end of the day it’s going to be the same thing. I don’t see her changing course on the policies,” said Dean Baker, co-director of the liberal Center for Economic and Policy Research.

On taxes, “she would raise taxes on one or two of the top brackets to where Clinton raised them,” pushing the top federal income tax rate back up to nearly 40 percent, Mr. Baker told me.

Mr. Obama, too, has carved out a leftist voting record in the Senate, but he has a philosophically broader and in some ways more eclectic group of economic advisers , mostly trained economists drawn from major universities. Among them: Harvard economist David Cutler, who served on Bill Clinton’s Council of Economic Advisers, and Austan Goolsbee, a University of Chicago economist who calls himself “a market centrist.” Mr. Obama, he says, despite his liberal voting record, “approaches issues with a respect for the way markets work.”

“He has objectives you would expect a Democrat to have, but also market-based approaches to reach those Democratic goals. Every time I talk to him, he respects and understands that you must take the market into account.”

That sensitivity for the markets could lead to some tax cuts, Mr. Goolsbee suggests. “I don’t want to scoop the policies he might reveal, but I would not be surprised if he were for tax cuts for various things, though mindful of the need for fiscal responsibility.”

Unlike many if not most of his rivals for the nomination, Mr. Obama seems a little more open to contrary views on economic policy, his advisers told me.

Professor Jeffery Liebman, an economist at Harvard’s John F. Kennedy School of Government, is a prime example. He is the co-author of a paper that lays out a bipartisan plan that builds on President Bush’s idea of personal Social Security accounts that invest in stocks. Mr. Obama opposed Mr. Bush’s idea, “but that has not made him adverse to hearing other points of view. He talks to guys like Liebman,” Mr. Goolsbee said. “He’s very concerned about how we get the savings rate higher and has been exploring ways to do that.”

Former North Carolina Sen. John Edwards, running on a far-left economic agenda, has made universal health care, more social welfare spending for the poor and higher taxes to pay for it all, the focus of his candidacy. He is advised by Robert Gordon and James Kvall, both former economic policy aides in the Clinton White House.

Mr. Edwards is much more heavily trade protectionist and “balancing the budget would not be a top priority for him,” Mr. Baker said.

Donald Lambro, chief political correspondent of The Washington Times, is a nationally syndicated columnist.

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