This past Monday, Undersecretary of the Treasury for International Affairs, John Taylor, announced his resignation. This appears to be part of a larger trend of administration economists quietly heading back to academia or the private sector. Take a brief look at the Treasury's website and you'll find a large number of key positions either vacant or filled with "acting appointees." With real economists resigning en masse, it looks like President Bush may need to look to his buddies to fill the posts.
That might explain President Bush's new choice for trade representative, former Rep. Rob Portman (R-OH). Portman can be expected to sell the administration's trade agenda much as Secretary of Treasury John Snow focuses on pitching Bush's privatization plan for Social Security. Portman, however, hasn't actually worked on international economic issues in over twelve years. As he told reporters: "I got involved in a lot of issues in Congress, so I haven't been able to focus as much on trade." Perhaps the only people President Bush can put in these positions are cheerleaders; it seems that very few economists are keen on wrestling wrestle economic logic out of the Bush administration's reforms.
This week, the Economist pointed out the weakness of President Bush's economic team:
There are two growing suspicions about Mr. Bush's approach to economic policy. The first is that he sees it mainly as a question of salesmanship. Showing an admirable faith in markets, the president seems to think that economic policy will basically run itself; what you need it a bit of pizzazz to sell the president's reforms. The second suspicion is that loyalty is more important than knowledge.
Sad, but increasingly true. It is unclear how long the Treasury will be able to "run itself." While the Bush administration pretends to have a plan to halve the deficit, there is still no deputy assistant secretary for federal finance. Debt relief for developing countries could prove a challenge without an Executive Director of the World Bank in place. Pushing through tax reform might also be difficult given that there hasn't been an Assistant Secretary of Tax Policy all year. Let's hope that at least a handful of these positions will be filled with real prescriptive economists rather than Bush policy cheerleaders. Otherwise, we could be in for a world of trouble.