Yes­ter­day the announce­ment leaked that Pres­i­dent Obama would name Aus­tan Gools­bee, the wun­derkind Uni­ver­sity of Chicago eco­nom­ics pro­fes­sor, to replace Christina Romer as Chair­man of the White House Coun­sel of Eco­nomic Advis­ers, extend­ing America’s tra­di­tion of pro­mot­ing peo­ple who get most things wrong.

Gools­bee with Barack Obama

How wrong is Gools­bee? Read this New York Times op-ed from March 29, 2007—after the bub­ble had begun to deflate—in which he neatly ties together wrong­ness about the hous­ing bub­ble, wrong­ness about the “effi­ciency” of mort­gage mar­kets, and stu­pid, disin­gen­u­ous wrong­ness about preda­tory lend­ing in minor­ity communities.

I could not hope to take this op-ed apart with more grace or a sharper wit than the late Doris Dungey did in this Cal­cu­lated Risk post, so I won’t even try. But I’ll ask the ques­tion, so often asked but never answered: Why do we keep lis­ten­ing to, employ­ing, pro­mot­ing, and pay­ing ridicu­lous amounts of money to the peo­ple who get things mostly wrong?

Why? Why? Why?

In this case, part of the rea­son could be that Gools­bee is so quippy. Here he is on The Daily Show last sum­mer, going on about how, thanks to the Obama stim­u­lus, happy days were here again.

Being right is much less valu­able than being per­son­able and loyal, it appears.

But the real key to political—and aca­d­e­mic and economic—viability can be summed up in one word: centrist.

HuffPO: He is “con­sid­ered to be a cen­trist economist.”

NYT: He is “known for his cen­trist, free-trade views.”

Oh, right; two more words: “free trade.” Can’t be a seri­ous econ­o­mist with­out also being four-square for “free trade.” And “free markets.”

“He’s a seri­ous free mar­ket guy,” the WaPO’s Ezra Klein assures in today’s “Seven Things to Know About Aus­tan Gools­bee,” of which only two are relevant—numbers four and five.

Goolsbee’s aca­d­e­mic work falls into two broad cat­e­gories. The first I’ll call the New Econ­omy is Dif­fer­ent the­ory, in which he talks about com­put­ers and the high-tech mar­kets and how these are mostly won­drous, “effi­cient,” etc. Gools­bee has said that he drifted toward this line of study because he is a “data hound,” and that’s where the data were. Those who con­sider this sort of rea­son­ing akin to the guy search­ing for his car keys under the street lamp because he can see bet­ter there are get­ting my drift. What he misses are the basics—the monop­oly power and planned obso­les­cence that every non-economist expe­ri­ences and grum­bles about when buy­ing or oper­at­ing com­puter hard­ware and soft­ware. This blind spot is by no means unique—it is stan­dard among econ­o­mists, par­tic­u­larly those of the Chicago per­sua­sion. Its utter wrong­ness should be self-evident.

Goolsbee’s sec­ond, and more promi­nent, set of papers con­cerns tax pol­icy. The cen­trist take-away here: Tax­ing the rich (or cor­po­ra­tions, or inter­net com­merce, or any­thing else with a pow­er­ful polit­i­cal lobby and/or pha­lanx of lawyers at its dis­posal) is not quite as futile as wingnuts claim. Here’s one from 1997 regard­ing exec­u­tive com­pen­sa­tion. And another from 1999 (PDF).

This is not wrong, but it’s not com­plete. The prob­lem with econ­o­mists’ tax stud­ies is that they don’t con­sider tax col­lec­tion pol­icy or poten­tial, prob­a­bly because improv­ing tax col­lec­tion has been a polit­i­cal non-starter for at least two decades. If you were a foot­ball coach and your defen­sive line kept allow­ing short passes, would you con­clude that the short pass was unde­fend­able and for­feit the game? What if the oppos­ing team’s QB was rou­tinely throw­ing his short passes after cross­ing the line of scrim­mage? Would you, maybe, call for some bet­ter offi­ci­at­ing? Not if you actu­ally worked for the oppos­ing team, you wouldn’t—and that’s what the I.R.S. effec­tively does today.

The refs—that is, the fed­eral judges—also mostly work for the other team. One key rea­son for that—the pri­macy of the Law and Eco­nom­ics Move­ment—can­not be blamed on Gools­bee. But from 2001 to 2004, he did edit one of the movement’s pre­mier jour­nals.

It’s not that Gools­bee is secretly on the pay­roll of the Olin Foun­da­tion or the Koch Broth­ers. He’s a crea­ture of the Demo­c­ra­tic Lead­er­ship Coun­cil, the respectably “cen­trist” Repub­li­can wing of the Demo­c­ra­tic party. Here’s Gools­bee, in a 2006 DLC mis­sive,  echo­ing George W. Bush’s “own­er­ship soci­ety” con:

Econ­o­mists don’t know whether the stag­nat­ing wage growth of recent years will be a per­sis­tent fea­ture of the econ­omy. But the returns on cap­i­tal invest­ment are as high as they’ve ever been. So at least until there is some clar­ity in the wage pic­ture, the clar­ion call for pro­gres­sives ought to be: Democ­ra­tize cap­i­tal ownership!

Got it? 1) Econ­o­mists “don’t know” if stag­nat­ing wage growth will per­sist because they can­not pre­dict future events, not even with full knowledge—hell, author­ship—of the mass of his­tor­i­cal pol­icy changes—“free trade,” dereg­u­la­tion, pri­vate sec­tor union destruction—that were designed to lower reg­u­lar peo­ples’ wages. How­ever, 2) they can pre­dict future events in cap­i­tal mar­kets. Gools­bee just gets them wrong. Total un-inflation-adjusted returns in the Dow Indus­tri­als over the past decade = +.15 per­cent.

So, no, Gools­bee didn’t get the George Will Stamp of Approval because he’s Skull and Bones. He got it because he believes that the mete­oric income and wealth inequal­ity that arose dur­ing his life­time owes not to the tax, labor and trade poli­cies engi­neered by “cen­trist” econ­o­mists in the thrall (and often the pay) of cor­po­rate oli­garchs, but to a com­bi­na­tion of new tech­nol­ogy and “rad­i­cally increased returns to skill.”

It’s skill.

An excel­lent the­ory, that. Very sound-biteable. But if Gools­bee is right about that value of skill (and yet so pub­licly wrong about the hous­ing, mort­gage, cap­i­tal, and wage mar­kets and the util­ity of the first stim­u­lus pack­age) how can he explain his own suc­cess and prominence?