The departure of Austan Goolsbee from the Council of Economic Advisors has left a big hole in the administration's economic team, at a time when we really need all hands on deck. This morning, the administration announced that the president was filling the gap with Alan Krueger, the Princeton economist who spent a year at Treasury between 2009-10.
Ezra Klein notes that this is a continuation of a pattern: the administration tends to look inwards for replacements: to people who have a longstanding relationship with the current economic team (and often, were prominent members of the Clinton administration as well). You can ask whether this makes the administration insular, insufficiently open to a change of direction--and I think that's a legitimate question. But I think it needs to be combined with a coherent narrative about what ideas they're excluding, what imaginative new tactics they ought to try--and I don't have one. Certainly not one that is legislatively possible in the current environment.
On other fronts, I think Krueger is an excellent choice. I've heard him speak in a number of off-the-record sessions, and I don't think that anyone is going to be mad at me for revealing that he was extremely impressive, with a grasp of labor market economics that seems to this non-economist both encyclopedic, and very nuanced. He's also very good at explaining those distinctions in a way that makes sense.
It's also no bad thing that we have a labor economist at the CEA right now, when our failure to create jobs for the standing army of the unemployed is by far our biggest problem. It's not that I think there's some magical program for re-employing everyone that has been hitherto overlooked because the CEA didn't have Alan Krueger on hand (I'm sure Austan Goolsbee could--and did--get him on the phone any time he wanted.) But on the margin, it matters that someone who has spent much of his career studying labor market outcomes will be dedicating the next few years to helping the president devise economic policy. When issues come up, his mind will naturally see the repercussion for jobs. And that's exactly the focus we should have right now.