Does Obama understand the economy?

We all fear that McCain will be like Bush I and II and have no clue how to deal with economic downturns or crises. But what about Obama? Has he shown anything either as senator or on the campaign trail to show that he knows how to deal with a NATIONAL economy? I suppose you could pull up examples from when he was a state rep seeing how Illinois is so large, but keep in mind the US economy is so much more complex than a state’s economy.

Obligatory website: Economists for Obama.

Handy quote on website from Nobel Laurette James Heckman: "I’ve never worked with a campaign that was more interested in what the research shows.”

Indeed, the Obama campaign website is chock-full of policy geekery.

I think it’s fair to say that Obama has closer ties with academic economists that McCain does. After all McCain has acknowledged that economics is not his strong suit. Unfortunately, that means that he will have to rely on lobbyists like Phil Gramm and failed CEOs like Fiorina.

Neither McCain, nor Obama, are economists.

But which candidate do you trust to fill their Cabinet with highly educated economists who are not lobbyists, have the American public in mind, and will not enact (and keep) laws that allow corporations to go unregulated, with free reign for profit gauging?

My bet is on that dude who has the supposedly “laughable” experience of community organizer over the dude who proudly noted he has voted with Bush over 90% of the time.

Four more years of this shit? No thanks.

I frankly don’t expect any presidential candidate to really understand the economy. One thing becoming a specialist has taught me is that every question in every field is far more complex, and requires far more knowledge to have a justified opinion on, than most laypersons really understand. So a president damn well better have good advisors–not lobbyists or interest group whores, but people with actual expertise. That’s why I find this to be key:

ETA: As usual, someone posts what I want to say, more eloquently than I, and earlier than I.

The reply posts indicate that Obama may have ADVISORS that know the economy, but the question was if Obama HIMSELF has shown that he understands at least the basics of how the economy works.

Not to put this on a “But McCain . . .” hijack, but if neither candidate understands the economy, then why does it matter for McCain to admit it (implying that he knows that he’ll need top-notch advisors). Or is that what we are voting on? Not the candidate that knows how to deal with the economy but who will get the best advisors?

This is the most accurate thing I’ve ever seen on the Dope, and why the recent partisan politics are so damned irritating. Bring on December.

Because part of the problem is McCain didn’t see it coming and has essentially voted along with Bush to set this all in motion. Obama certainly doesn’t have a crystal ball to see the future, but he has been talking about the sorry state of our economy for a long time (although few paid much attention) while McCain had to be bitch slapped with this crap over the weekend for him to make note of it.

Ran out of editing time
I looked on Obama’s website and the quote is

So a free-market leading to prosperity for all? Isn’t the overly free market what led to this mortgage bubble burst?

Please let’s keep McCain out of this debate. We’re assuming he’s bringing nothing to the table, but the question is what is Obama bringing starting at 12:01pm on 20 January 2009?

Actually yes, we are hiring an executive, not an economist. Obama being capable of assembling a top-notch executive staff in that particular advisory position commends him. We are paying him to put together and run his team. That’s what the job is supposed to be. The experience of running his campaign gives me a lot of hope for how meticulously he’ll handle his cabinet.

Well, he’ll no doubt replace all the folks who brought us to this current economic debacle.

Ok but unlike philosophy economics is grounded upon a pretty well defined paradigm. So you can go pretty far with 2 or 3 semesters of economics.

Those with a solid grasp of public policy will know about adverse selection, counter-cyclical fiscal policy, moral hazard, externalities and the like. Bill Clinton certainly knew this stuff and I suspect that Obama does as well, given his professorship at the University of Chicago, an institution known for its law and economics program.

So maybe he knows economics. But there’s an opportunity cost. That means he won’t be an expert on foreign policy, or crime prevention and control, or energy policy, etc., etc. You can become an expert on a couple of things. But you can’t be really knowledeable on everything–not even just on everything the President and his advisors will have to make decisions on.

I’ve got an undergraduate degree in economis and 7 years institutional experience in investment banks (including a year at Lehman’s).

IMHO Obama has a decent understanding of economics. Much more so than your average university graduatealthough that’s a low bar.

He has ex fed chairman Paul Volker as an advisor. Volker navigated the Savings & Loan crisis (not dissimular to today’s problem) and was the poster child for killing inflation that was near 20%.

Another advisor is Rubin, ex Gioldman partner and Clinton’s treasury secretary. His was a very successful reign in the business and government.

Look at the OP a different way. How would Obama rank compared with Presidential candidates/Presidents over the past few decades? Pretty obviously in the top 3 if not the number one position. And not to be partisan but Bush, McCain and Palin would obviously be nowhere near the top 3.

Standard answer: the price mechanism permits the most efficient allocation of goods and services and promotes economic growth.

But there is also something known as market failure, which can occur under certain well defined circumstances. These ideas aren’t really in conflict: markets are the engine of growth, the regulator and manager its engineers, to stretch a metaphor.

Most economists believe in free markets as opposed to central planning, but that doesn’t mean that they don’t believe that there’s a role for regulation, particularly financial regulation.
As for the current financial mess, it’s certainly possible that a Democrat would have been asleep at the switch. But in the case of a modern Republican administration this becomes a near-certainty, given Fox News et als constant drumbeat against intrusive governmental regulation. I would not say the same about Nixon or Eisenhower, but those days are past.

I agree that expertise is important. What I’m saying is that 2-3 semesters of economics gives you some general knowledge, which will aid in oversight.

For example, if the President is familiar with the concept of opportunity cost and scarcity, it will endow him with a certain perspective and frankly skepticism when an associate proposes a new program or a new war. This isn’t so much knowledge as conceptual infrastructure. It’s what permits a knowledge overseer to grill one’s staff, insist upon competence and smell out BS.

Heh. I am reminded of a blog post with the phrase Everything I Know I Learned At A Very Expensive University.

That’s fair. A president should know basic things, like basic economic concepts, whether it is Switzerland or Sweden that is an officially neutral nation, a bit about energy security and the politics of the Middle East, etc. I guess I am reading the word ‘understand’ in a pretty strong way. Read that way, I don’t expect the President to understand all the issues; I expect him to have competent advisors who have moral integrity and the best interest of the nation at heart.

Obama strikes me as someone who at least understands the power of presidential influence on the economy. This, as compared to Bush, who started his presidency with some statement to the effect of “the economy is in bad shape” followed pretty quickly with markets tanking. (This effect happening again this past week).

The economy needs a balance between realism and cheerleader. Bill Clinton understood this, in my opinion. I think Obama does as well.

That’s eloquent and pithy to boot.

I think Obama knows enough to avoid doing what his opponent did back in the '80s in the Keating Five Savings and Loan scandal.