Treasury Staffs Up, Brings More Progressives On Board

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President Obama has taken a lot of heat for having an understaffed Treasury Department, so earlier this week he named three new assistant secretaries. I have a web article up on one of the three, Alan Krueger, who will be the assistant secretary for economic policy. Krueger has never worked for a bank, doesn’t have any connection to TARP or its later iterations, and has never pushed finance sector deregulation. Oh, and he shifted the conventional thinking on the minimum wage dramatically leftward in the 90s. From my article:

“To my mind, he would be one of the best people we could hope to get in this position,” says Dean Baker, head of the left-leaning Center for Economic Policy Research. Adds CEPR’s chief economist, John Schmitt: “He has done a lot of research that progressives would be very happy about. He is certainly one of the absolute top labor economists in the country.” One-time Clinton economic aide and Berkeley economist Brad DeLong calls Krueger a “good choice.”

Krueger is best known for his work on the minimum wage. In 1997, he co-wrote a book with economist David Card called Myth and Measurement: The New Economics of the Minimum Wage. They argued that the moderate increases in the minimum wage typically seen in the US don’t raise unemployment numbers—a thesis that went against much of the conventional wisdom at the time—and that such pay boosts have a substantial impact on the take-home pay of low-wage workers. The book, says progressive economist James K. Galbraith, established the minimum wage’s value “very firmly and to the horror of the mainstream.” At first, Krueger’s ideas on the minimum wage were highly controversial. “He took a lot of heat for that, and stood up,” says Schmitt. Krueger’s extensive background on issues related to job creation and wage distribution, Schmitt adds, will serve him well as the Obama team attempts to implement the stimulus bill, which aims to create over 3 million new jobs.

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