Obamanomics
At risk of going all Obama, all the time at this blog, this piece at Technology Review on Austan Goolsbee, Obama’s chief economic advisor was an interesting read:
(Goolsbee) is part of a generation of economists who have focused on the Internet, network effects, behavioral economics, and neuroeconomics. Whether Obama wins or loses, this is the first time a U.S. presidential candidate has had a chief economic advisor whose outlook and skills are those of a 21st-century economist.
Goolsbee has many sensible things to say about the impact of the Internet on the broader economy:
He soon caught on, however. “When the Internet first appeared, this heated debate developed among economists,” he recalls. “One side said the Internet will make it easier for companies to price-discriminate, and it’ll be fabulously profitable. The other side argued that the Internet will be the great equalizer–it’ll make markets close to perfectly competitive and people much more price-sensitive, and profits will be highly constrained. I’m probably the leading guy associated with that second position. Arguably, I got lucky, but what I wrote basically turned out to be correct.”
But what I liked best from the Goolsbee quotes in this article was his hearty endorsement of creative destruction:
“In 1910,” Goolsbee says, “if someone could have gone back and told people then how many phone lines would exist today in the U.S., they’d have responded that that was physically impossible, because every American would need to be a telephone exchange operator. That few switchboard operators exist today, nevertheless, isn’t a sign that all those people are unemployed. The labor economist Alan Krueger at Princeton has studied what share of the highest-paying occupations are occupation codes that didn’t exist in the 1980 census. The figure is very substantial. There’s always job churn.” Continual job destruction and creation, Goolsbee insists, is healthy.
All true and neatly expressed. But it’s also extremely politically sensitive. If I was Goolsbee I’d be leaving the economics seminar until after the election…
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