In the wake of World War II, President Harry S. Truman enacted the Employment Act of 1946, not only to secure jobs for returning soldiers but also to lay the groundwork for the creation of the White House Council of Economic Advisers (CEA). This move marked a significant milestone in the field of economics, granting economists an official platform to provide advice to the President of the United States. Such a privilege was rare in other professions, setting economists apart in the realm of policymaking and analysis.
Even though the legislation was signed into law, President Truman hesitated in appointing members to the council. After persistent urging, he reluctantly welcomed economists into the decision-making realm of the White House. The initial council members included two Ph.D.-trained economists and a lawyer with some background in economics. Reflecting on his experience as the first CEA chair, Edwin Griswold Nourse, the University of Chicago Ph.D. graduate, expressed disappointment over Truman’s lack of interest in economists’ perspectives.
Despite economic professionals’ growing presence in policy discussions during the 1940s and 1950s, they remained on the periphery. Key policymaking positions were often held by individuals with legal or business backgrounds, reflecting a prevailing disregard for economists’ insights. A shift occurred in the subsequent years, described as a “revolution” that elevated economists to influential roles. Leaders in the field like Arthur F. Burns and Paul Volcker began assuming pivotal positions, steering economic policies and decisions.
However, recent trends show a resurgence of noneconomists assuming prominent economic advisory roles, signaling a decline in economists’ influence. Current leaders, such as Jerome Powell and Jared Bernstein, lack formal education in economics. Political campaigns have also strayed from conventional economic principles, adopting radical populist strategies that challenge longstanding economic ideologies.
In a surprising turn of events, Yale Law School alumni have emerged as pivotal figures in shaping economic policies, despite the absence of formal economic training. Their collective skepticism towards free trade and industrial policies diverges from traditional economic viewpoints.
While the rise of Yale Law School alumni in economic roles symbolizes shifting political ideologies, it does not indicate indoctrination but rather reflects the school’s elite status and connections to Washington’s elite circles. This trend mirrors a broader disaffection with economists’ perspectives, driven by growing discontent with neoliberal policies and a loss of faith in expertise.
As economists face diminishing relevance in today’s political landscape, the profession grapples with its role in future policymaking. Critics like Binyamin Appelbaum attribute economic policies to deepening inequalities, while others like Allison Schrager acknowledge past successes in maintaining economic stability. Despite challenges, economists may regain significance in times of economic turmoil or political impasse, offering hope for a potential resurgence in their influence on shaping policies for the future.
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