All-Star Panel Draws Cheers, Jeers : Business Leaders Hail Wilson’s Picks as Critics Question Experience
Gov. Pete Wilson’s new Council of Economic Advisers won quick praise Wednesday from business leaders and conservative economists for its stellar cast of characters--most of them advocates of free-market solutions to the state’s economic troubles.
But others expressed frustration that the group does not include more members with recent, hands-on experience at efforts to spur job growth and tame the state’s unwieldy bureaucracy.
These critics added that Wilson’s council fails to reflect the support that arose in California with Bill Clinton’s election for diversity and new ideas, including government intervention to restore economic prosperity.
While a new Administration in Washington is looking at spending to create jobs and tax increases to pay down the burgeoning national debt, Wilson’s council, announced Tuesday, is largely made up of members who have long favored tax cuts, less state regulation, less state support of industrial growth and market incentives to solve socioeconomic woes.
“For all of them, especially the theorists, (the emphasis will be on) incentives--allocating scarce resources through the use of incentives,” said Mark Green, an economist with Wells Fargo Bank. “And the people who are more business oriented, the CEOs, they’re going to see things in the exact same way.”
Green and other economists expect the new council to emphasize such measures as streamlining the regulatory process and lowering costs to business of workers’ compensation and unemployment insurance.
William Campbell, president of the California Manufacturers Assn., said Wilson’s group has “an excellent opportunity to give California a solution to its economic problems.”
Yet other economists complained that most of Wilson’s new advisers have not spent much time in the trenches attempting to revitalize the California economy.
The council, chaired by former Secretary of State George P. Shultz, is made up of 16 prominent business leaders and academic economists who will advise Wilson on tax, regulatory, trade and other economic policies. It includes Nobel prize-winning economists Milton Friedman and Gary Becker, former U.S. Trade Representative Carla Anderson Hills, management expert Peter F. Drucker and former Bush Council of Economic Advisers Chairman Michael J. Boskin. Also on the panel are BankAmerica Chairman Richard Rosenberg and Southern California Edison Chairman John E. Bryson.
“These are people of global note--not people who study regional economies, which is what we need,” said Joel Kotkin, who teaches international business at Pepperdine University and is a senior fellow at the Center for the New West, in Denver.
“There doesn’t seem to be an emphasis on the people who are likely to be able to help California in its transition, people who are experts on small industries, enterprise creation, people who actually deal with low-cost ways to spur job growth, who know how to get more out of bureaucracies for less.”
Eric Best, senior economics consultant at Global Business Network, Inc., a Bay Area business strategy consultancy, also faulted the panel as unlikely to offer new ideas to solve California’s problems.
“It may be that they know what to do with massive defense cuts and corporate retraining and a host of things that appear to be necessary in an intensely transitional economy, but I don’t look at that group of people and think that a big change is coming,” Best said.
However, several economists who saw a lack of diversity in Wilson’s choices pointed to First Interstate Bank chief economist Lynn Reaser as an exception, as one of the few regionally active economists on the council.
“I hope I can bring a very practical perspective to the table, as part of the reality check,” Reaser said.
The “Wilsonomics” Team
Gov. Pete Wilson on Tuesday named an all-star team of conservative economists and business people to his new formed Council of Economic Advisers. Here are some members of the council and their economic perspectives:
George P. Schultz, chair of the council: Schultz, who has served in five Republican administrations, strongly favors tax cuts and lower government spending, less regulation and more free-market solutions. But he has advocated government involvement in such safety-net programs as worker retraining.
Gary S. Becker, Nobel laureate and senior fellow at the Hoover Institution at Stanford University: Becker applies economic analysis to such untraditional questions as why people divorce and other household issues. He generally favors voluntary, private-sector efforts instead of government involvement.
Michael J. Boskin, former Bush Administration chief economic adviser: Boskin has long opposed government intervention to jump-start economic recovery and subsidize specific industries. For example, he fought a proposal for federal support of a U.S. effort to build high-definition televisions.
John E. Bryson, chief executive of Southern California Edison: One of the few Democrats on the council, Bryson has led Edison’s effort to emphasize energy conservation and has supported Calstart, the public-private consortium attempting to develop an advanced transportation industry.
Milton Friedman, Nobel laureate and Hoover Institution senior research fellow: A guru of free-market capitalism, Friedman has recommended cutting state regulations, state taxes and spending, including support for welfare and the public schools.
Lynn Reaser, chief economist at First Interstate Bank: Reaser believes that California should encourage its international trade and avoid supports to stimulate the state economy. She’s called for reforming workers’ compensation and environmental regulations to lure businesses to the state.
