I have been wondering about President Obama’s nomination of Alan Krueger to head the White House Council of Economic Advisers. At least Krueger is from Princeton University and not the University of Chicago.

The interview below is the first instance I have seen of a fellow economist commenting on the nomination. (There is a brief introductory ad in the video. You can mute it until the interview starts.)

Unlike the people in the above interview, I think that if this guy is any good, the Republicans will fight his nomination tooth and nail.

From The New York Times article, Economic Adviser Pick Is Known as Labor Expert, we have the following:

The cooler reception came from some on the left, who said the moment called for a big-picture macroeconomist who would push for more ambitious initiatives to reduce unemployment. “The kind of action he’s an aggressive and creative thinker about is relatively small bore, supply-side changes rather than big-picture efforts to fill the gap,” Matthew Yglesias, a senior fellow at the liberal Center for American Progress, wrote in a blog.

I had that same feeling when I heard the interview above. Krueger sounded a bit too much like he comes from the pushing on the string camp of economists rather than from the pulling camp. Pushing is ok as long as there is still some starch left in the string. When it has gone limp, pulling is the only thing left to do. (It’s not my fault if you see any hidden sexual reference in the preceding sentence. If you think you see it, it must be because your mind is in the gutter.)

I keep trying to remind people that there is no policy prescription that is correct at all times. You have to pick the prescription to fit the disease. In this case, any lessons learned from labor policies studied in the midst of mild recessions might not be valid for prescribing what to do in this era of the Lesser Depression.

Keynesian economics was developed to explain why certain economic policies that people up to that time had believed ought to have worked did not in fact work during the Great Depression. I hope that Alan Krueger is not thinking still about policies that “ought to work”, but that lots of economists have realized will not work under the current conditions.