Sometimes you can tell something about a politician by their supporters. Oh, I am not necessarily talking about the every day voter but the big time movers and shakers. Take for instance economist and former Obama Administration official Austan Goolsbee. It appears that Goolsbee is a Pete Buttigieg supporter. Why the hell should you care about that? Well, back during the Obama Administration in 2009, Goolsbee proposed that the U.S. government let Chrysler fail, at least according to Ron Suskind in his book Confidence Men: Wall Street, Washington, and the Education of President. At the time, Chrysler’s cars provided work for approximately 300,00 workers. Goolsbee argued that GM and Ford would hire all those out of work Chrysler employees.
Let that sink in for a moment.
Better yet, I am going to provide some extended quotes from Suskind’s book. I think you all need to read it to better understand Goolsbee’s thinking. From page 227:
The strong case for liquidation came, surprisingly, from Austan Goolsbee, Obama’s long-standing economic adviser, who made the case that the death of Chrysler would nourish both GM and Ford with new customers and that both companies, pumping up production to meet heightened demand would hire many of the ousted Chrylser workers. This could save GM. That analysis, with reams of underlying data, would normally have been sufficient to close a private-equity deal.
According to Suskind, there was a meeting with the Auto Task Force and Obama on this matter. Goolsbee was specifically called in to present his case, and the analysis was considered “sound.” However, thankfully, there was one guy on the Auto Task Force who had worked both sides of the street — Wall Street and as an advisor to the United Steelworkers Union — by the name of Ron Bloom. From page 228:
When Goolsbee talked about how Chrysler workers would be “absorbed, Bloom stepped into the fray.
“Mr. President, these are the reseons we can’t kill this company. The damage to these communities and people will never be undone,” Bloom said, drawing attention to the chasm between economic modeling and on-the-ground realities.
Goolsbee continued to push his position that everything would be fine if Chrysler were to fail.
“We need to do this for GM and Ford,” he said. “These people” — meaning Chrysler fired employees — “will have job substitution.”
Bloom called bullshit on Goolsbee’s “job substitution” argument.
Bloom, who later commented, “There wasn’t a one guy in the room who’d spent any serious time having beers with real workers, “ was furious. “It just doesn’t work that way,” he said to the group, his voice rising. Many of these people are nearing fifty and have been working in the auto industry for twenty-five years. They get laid off, they won’t get rehired — by anyone.”
It took the non-economists and political advisers to Obama to point out that the U.S. government had bailed out the banks, but Obama was going to let American workers be thrown out of work? Thankfully, this got Obama’s attention, and Chrysler was not allowed to fail.
Now, Buttigieg supporters are going to argue that this is just one economist who couldn’t look past his data and calculations to really see the damage he was willing to inflict on American workers. It’s unfair to say one callous and stupid supporter represents the candidate or the campaign. And that is a legitimate argument to make, except there is this one other little factoid that makes this story relevant to Pete Buttigieg: the global consultancy firm McKinsey.
Buttigieg worked for McKinsey for many years, and let us say that McKinsey does not have the best reputation:
Just days after he took office in 2017, President Trump set out to make good on his campaign pledge to halt illegal immigration. In a pair of executive orders, he ordered “all legally available resources” to be shifted to border detention facilities, and called for hiring 10,000 new immigration officers.
The logistical challenges were daunting, but as luck would have it, Immigration and Customs Enforcement already had a partner on its payroll: McKinsey & Company, an international consulting firm brought on under the Obama administration to help engineer an “organizational transformation” in the ICE division charged with deporting migrants who are in the United States unlawfully.
ICE quickly redirected McKinsey toward helping the agency figure out how to execute the White House’s clampdown on illegal immigration.
But the money-saving recommendations the consultants came up with made some career ICE workers uncomfortable. They proposed cuts in spending on food for migrants, as well as on medical care and supervision of detainees, according to interviews with people who worked on the project for both ICE and McKinsey and 1,500 pages of documents obtained from the agency after ProPublica filed a lawsuit under the Freedom of Information Act.
McKinsey’s team also looked for ways to accelerate the deportation process, provoking worries among some ICE staff members that the recommendations risked short-circuiting due-process protections for migrants fighting removal from the United States. The consultants, three people who worked on the project said, seemed focused solely on cutting costs and speeding up deportations — actions whose success could be measured in numbers — with little acknowledgment that these policies affected thousands of human beings.
In what one former official described as “heated meetings” with McKinsey consultants, agency staff members questioned whether saving pennies on food and medical care for detainees justified the potential human cost.
That kind of sounds like the same tyoe of “economic analysis” and callousness that Austan Goolsbee would find acceptable. I wonder if Buttigieg and Goolsbee got together over beers to have little chat sessions on public policy? And I know what Buttigieg supporters will say next, “This occurred after Buttigieg left McKinsey!” Yes, but anyone think that this was some on off incident and that it isn’t part of the corporate culture at McKinsey? If not, Buttigieg needs to release the list of his clients from McKinsey to show who and what he was working on at McKinsey.
Anyway, I found that story about Goolsbee because I am still reading Suskind’s book, and it clearly demonstrates that politicians surround themselves with like minded people. And this is very depressing to tell the truth. A number of powerful people float between Wall Street and D.C. with the greatest of ease in both Democratic and Republican Administrations. And these same individuals have power and create real world consequences for the rest of us. Some other characters from Suskind’s book are still handing out their terrible advice to the present Democratic field (e.g., Larry Summers for one).