Council of Economic Advisers

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Council of Economic Advisers (CEA)
Council of Economic Advisers.png
Agency overview
Formed1946;74 years ago (1946)
Preceding agencies
Headquarters Eisenhower Executive Office Building
EmployeesAbout 35
Agency executive
Parent agency Executive Office of the President of the United States
Website Council of Economic Advisers

The Council of Economic Advisers (CEA) is a United States agency within the Executive Office of the President established in 1946, which advises the President of the United States on economic policy. [2] The CEA provides much of the empirical research for the White House and prepares the annual Economic Report of the President.

Contents

Economic Report of the President

The report is published by the CEA in February of each year. It reviews what economic activity was of impact in the previous year, outlines the economic goals for the coming year (based on the President's economic agenda), and makes numerical projections of how the economy will perform. Criticism usually follows, sometimes attacking the importance placed or not placed on particular data, and also on the importance of particular goals presented in the overview. Actual data, related to or used in the report, are from the Bureau of Economic Analysis and U.S. Bureau of Labor Statistics.[ citation needed ]

History: 1946–1978

The Truman administration established the Council of Economic Advisers via the Employment Act of 1946 to provide presidents with objective economic analysis and advice on the development and implementation of a wide range of domestic and international economic policy issues. It was a step from an "ad hoc style of economic policy-making to a more institutionalized and focused process". In 1949 Chairman Edwin Nourse and member Leon Keyserling argued about whether the advice should be private or public and about the role of government in economic stabilization. [3]

Nourse believed a choice had to be made between "guns or butter" but Keyserling argued for deficit spending, asserting that an expanding economy could afford large defense expenditures without sacrificing an increased standard of living. In 1949, Keyserling gained support from Truman advisors Dean Acheson and Clark Clifford. Nourse resigned as chairman, warning about the dangers of budget deficits and increased funding of "wasteful" defense costs. Keyserling succeeded to the chairmanship and influenced Truman's Fair Deal proposals and the economic sections of NSC 68 that, in April 1950, asserted that the larger armed forces America needed would not affect living standards or risk the "transformation of the free character of our economy." [4]

During the 1953–54 recession, the CEA, headed by Arthur Burns deployed non-traditional neo-keynesian interventions, which provided results later called the "steady fifties" wherein many families stayed in the economic "middle class" with just one family wage-earner. The Eisenhower Administration supported an activist contracyclical approach that helped to establish Keynesianism as a possible bipartisan economic policy for the nation. Especially important in formulating the CEA response to the recession—accelerating public works programs, easing credit, and reducing taxes—were Arthur F. Burns and Neil H. Jacoby. [5]

Until 1963, during its first seven years the CEA made five technical advances in policy making, including the replacement of a "cyclical model" of the economy by a "growth model," the setting of quantitative targets for the economy, use of the theories of fiscal drag and full-employment budget, recognition of the need for greater flexibility in taxation, and replacement of the notion of unemployment as a structural problem by a realization of a low aggregate demand. [6]

The 1978 Humphrey–Hawkins Full Employment Act required each administration to move toward full employment and reasonable price stability within a specific time period. It has been criticized for making CEA's annual economic report highly political in nature, as well as highly unreliable and inaccurate over the standard two or five year projection periods. [7]

History: 1978–present

Since 1980, the CEA has focused on sources of economic growth, the supply side of the economy, and on international issues. [3] In the wake of the Great Recession of 2008–2009, the Council of Economic Advisers played a significant role in supporting the American Recovery and Reinvestment Act. [8]

Under the direction of Kevin Hassett during the Donald Trump presidency, the CEA released a report vilifying socialism and associating what they characterized as the "socialist" policies of liberal politicians to those of historical authoritarian regimes. [9]

Organization

The council's chairman is nominated by the president and confirmed by the United States Senate. The members are appointed by the president. As of July 2017, the Council's 18 person staff consisted of a chief of staff (Director of Macroeconomic Forecasting), 15 economists (5 senior, 4 research, 4 staff economists, 2 economic statisticians) and 2 operations staff. [10] Many of the staff economists are academics on leave or government economists on temporary assignment from other agencies. [8]

Chairmen and members

List of chairmen

OfficeholderTerm startTerm endPresident
Edwin G. Nourse August 9, 1946November 1, 1949 Harry Truman
Leon Keyserling
Acting: 1949–1950
November 2, 1949January 20, 1953
Arthur F. Burns March 19, 1953December 1, 1956 Dwight Eisenhower
Raymond J. Saulnier December 3, 1956January 20, 1961
Walter Heller January 29, 1961November 15, 1964 John F. Kennedy
Lyndon Johnson
Gardner Ackley November 16, 1964February 15, 1968
Arthur M. Okun February 15, 1968January 20, 1969
Paul W. McCracken February 4, 1969December 31, 1971 Richard Nixon
Herbert Stein January 1, 1972August 31, 1974
Gerald Ford
Alan Greenspan September 4, 1974January 20, 1977
Charles Schultze January 22, 1977January 20, 1981 Jimmy Carter
Murray Weidenbaum February 27, 1981August 25, 1982 Ronald Reagan
Martin Feldstein October 14, 1982July 10, 1984
Beryl W. Sprinkel April 18, 1985January 20, 1989
Michael J. Boskin February 2, 1989January 20, 1993 George H. W. Bush
Laura Tyson February 5, 1993February 21, 1995 Bill Clinton
Joseph Stiglitz June 28, 1995February 13, 1997
Janet Yellen February 18, 1997August 3, 1999
Martin N. Baily August 12, 1999January 20, 2001
Glenn Hubbard May 11, 2001February 28, 2003 George W. Bush
Greg Mankiw May 29, 2003February 18, 2005
Harvey S. Rosen February 23, 2005June 10, 2005
Ben Bernanke June 21, 2005January 31, 2006
Edward Lazear February 27, 2006January 20, 2009
Christina Romer January 28, 2009September 3, 2010 Barack Obama
Austan Goolsbee September 10, 2010August 5, 2011
Alan Krueger November 7, 2011August 2, 2013
Jason Furman [11] August 2, 2013January 20, 2017
Kevin Hassett [12] September 13, 2017June 28, 2019 Donald Trump
Tomas J. Philipson
Acting
June 28, 2019present

List of members

Related Research Articles

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Post-Keynesian economics is a school of economic thought with its origins in The General Theory of John Maynard Keynes, with subsequent development influenced to a large degree by Michał Kalecki, Joan Robinson, Nicholas Kaldor, Sidney Weintraub, Paul Davidson, Piero Sraffa and Jan Kregel. Historian Robert Skidelsky argues that the post-Keynesian school has remained closest to the spirit of Keynes' original work. It is a heterodox approach to economics.

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Employment Act of 1946 United States federal law

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Edwin Griswold Nourse American economist

Edwin Griswold Nourse was an American economist. He served as the first chairman of the Council of Economic Advisors between 1946 and 1949.

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Leon Keyserling American economist

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History of macroeconomic thought Wikimedia history article

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Mary Dublin Keyserling (1911–1997) was an economist, federal employee, and a conservative feminist. Her time as an economist is largely linked to her time as a federal employee by her career and positions in the United States government. During her career as head of the United States Women’s Bureau, Keyserling and her husband Leon Keyserling faced loyalty allegations during the Red Scare that impacted their governmental careers.

Mabel F. Timlin Canadian economist

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References

  1. 1 2 Wage and Price Controls Encyclopedia.com n.d.
  2. Council of Economic Advisers
  3. 1 2 Remarks by Chairman Alan Greenspan. Receipt of the Truman Medal for Economic Policy. Before the Truman Medal Award and Economics Conference, Kansas City, Missouri October 26, 2005, Council of Economic Advisers website under President Bush
  4. Brune 1989
  5. Engelbourg 1980
  6. Salant 1973
  7. Cimbala and Stout 1983
  8. 1 2 Flickenschild; Michael, Afonso, Alexandre (2018). "Networks of economic policy expertise in Germany and the United States in the wake of the Great Recession". Journal of European Public Policy. 26 (9): 1292–1311. doi:10.1080/13501763.2018.1518992.
  9. "What Could Kill Booming U.S. Economy? 'Socialists,' White House Warns" . Retrieved 20 November 2018.
  10. Council of Economic Advisers. Staff Whitehouse.gov, n.d. accessed 29 July 2017
  11. "Obama names Furman as new White House chief economist", Reuters, 2013-06-10
  12. "Senate Confirms Kevin Hassett as Chairman of the President's Council of Economic Advisers", The Wall Street Journal, 2017-09-12

Sources