Obama's Brilliant Economic Advisor: Austin Goolsbee

Dr. Goolsbee took over as Chairman of the Council of Economic Advisers earlier this month, as Dr. Christina Romer went back to magic fairy land academia.

How brilliant is Dr. Goolsbee? So brilliant he wrote this in 2007, just months before the wheels came off the mortgage market cart: (emphasis smart ass markup mine)

A study conducted by Kristopher Gerardi and Paul S. Willen from the Federal Reserve Bank of Boston and Harvey S. Rosen of Princeton, Do Households Benefit from Financial Deregulation and Innovation? The Case of the Mortgage Market (National Bureau of Economic Research Working Paper 12967), shows that the three decades from 1970 to 2000 witnessed an incredible flowering of new types of home loans. These innovations mainly served to give people power to make their own decisions about housing, and they ended up being quite sensible with their newfound access to capital.

These economists followed thousands of people over their lives and examined the evidence for whether mortgage markets have become more efficient over time. Lost in the current discussion about borrowers’ income levels in the subprime market is the fact that someone with a low income now but who stands to earn much more in the future would, in a perfect market, be able to borrow from a bank to buy a house. That is how economists™ view the efficiency of a capital market: people’s decisions unrestricted by the amount of money they have right now.

So.

If you ask someone about the economy, and they offer that they are economists, run, do not walk, run, to the nearest exit.

And we wonder why we have such problems.

Oh yeah - Austin almost didn't get the job. (Because he was a jaw droppingly stupid idiot? - Ed). No, because he was (and remains) white, and male.