Of course it’s Krueger

Posted Aug. 30, 2011, at 5:55 a.m.

WASHINGTON –There are two ways to look at the White House’s decision to name Alan Krueger to lead the Council of Economic Advisers.

One is that Krueger is arguably the leading labor economist in the country. He’s known for bringing a near-superhuman rigor to a subject that, oddly enough to non-economists, had fallen into a bit of disrepute in the profession. He’s served in both the Clinton and the Obama White Houses, so he knows the players and has proven his ability to move within the bureaucracy. He’s more than qualified for this position.

The other way, however, is that of course the Obama administration chose Alan Krueger. Why would anyone have ever thought they would have chosen anyone else? The White House has hewed to a very specific personnel-replacement strategy, and Krueger fits it perfectly.

When Peter Orszag left the Office of Management and Budget, he was replaced by Jack Lew, who was serving at the State Department and had led the Office of Management and Budget under Clinton. When Larry Summers left the National Economic Council, he was replaced by Gene Sperling, who was serving in the Treasury Department and who had previously led the National Economics Council. When Robert Gates left the Defense Department, he was replaced by Leon Panetta, who was leading the CIA, and who had previously served as chief of staff to Clinton. When Ron Klain left the Vice President’s office, he was replaced by Bruce Reed, who had been Clinton’s top domestic adviser. When Rahm Emanuel left the White House, he was replaced by William Daley, who had served in Clinton’s cabinet. Aside from Gates, every name on this list could have been found in a Clinton administration roll call, too.

Krueger fits this pattern. He was the top economist on the Labor Department under Clinton and the top economist for the Treasury Department from 2009-2010. He’s a close tennis buddy of Summers and Geithner. He knows these guys, and they know him. If you had tried to predict this choice by asking yourself, “who is the former Clinton-administration economist who has an extremely good relationship with the current set of economic-team principals,” Krueger is among the first names you would have come up with.

That’s not a criticism of Krueger, whose academic work makes him a particularly good fit for this position at this particular moment. In fact, it’s not a criticism of any particular choice in this list.

It makes perfect sense that when you’re looking to hire for a job, you would look for people who had served in that job before, or served in something close to that job before, and also for people who had some demonstrated ability to work well with your team. But taken as a whole, it’s a strong preference for a specific type of experience and a specific type of person, and it’s been followed so rigorously that it’s hard to believe the administration is hearing a wide range of internal views.

If everything was going great and the administration had been perfectly surefooted in its response to this crisis, that wouldn’t be particularly worrisome. But that’s not the world we live in, and on at least a couple of different issues — housing, monetary policy, the likely speed of the recovery, etc. — the administration has run into some real trouble. So if you think that this might be a good time for the administration to step back and rethink where the economy is and what we need to do going forward, then the question is which of their recent hires is in a position to help them do that?