The consensus Leonhardt discerns is based on his conversations with Bob Rubin, Jason Furman, and Obama himself. It includes raising taxes on high income people—not to plug the deficit, but to restore public spending. So far so good. But the big battle will be over scale. The scale the campaign has proposed to date is too puny to generate a real recovery, or to fundamentally alter the trajectory of economic insecurity and inequality. Larger scale public investment would bump into the objections of the Rubinistas.

Leonhardt writes:
“Far more than many other policy advisers, economists believe in the power of markets. What tends to distinguish Democratic economists is that they set out to uncover imperfections of the market and then come up with incremental, market-based solutions to these imperfections.”

Yes, but that’s the beginning of the story, not the end of it. The few-left-of-center economists Obama has reached out to – Jamie Galbraith, Jared Bernstein, William Spriggs, Daniel Tarullo, would counsel much more substantial public interventions to redress market “imperfections,” which are far more than minor blemishes. By contrast, the Goolsbee-Furman-Rubin camp would be for “incremental, market-based solutions” often too feeble to make a difference.

As Leonhardt acknowledges, there is also something of a dissensus in the Obama camp on trade.

Leonhardt accurately quotes me – Bob #3 – as praising Obama for his single gutsiest speech on the need to regulate Wall Street, delivered last March 27 at Cooper Union. But the devil is in the details, and as Leonhardt admits, “There is, plainly, a big potential conflict between the University of Chicago side of Obama and the regulator side.”

And in assessing Obama’s views on tax cutting—he would somehow combine more tax cutting with more public spending (see previous blog post). Leonhardt slips in some views of his own: “When Reagan was elected, in 1980, tax rates on top incomes were so high that even liberal economists now say the economy was suffering. There simply wasn’t enough of an incentive for rich people to start new companies or expand existing ones, because so much of their profits would have gone to the federal government.” Not most liberal economists whom I know. This is just a walk on the supply side.

The big debates within an Obama administration—if we get one—are still to come. It would be nice if the major policy disputes over economic issues had been resolved, just as it would be nice if Fox were fair and balanced. Hasn’t happened yet, probably never will, any more than “the end of history” happened.

--Robert Kuttner