Columbia Economist Leaves Top Bush Post

R. Glenn Hubbard, the Russell L. Carson Professor of Finance and Economics at Columbia Business School and the chairman of the White House Council of Economic Advisers, announced that he would be leaving the Bush administration and returning to Columbia, The Wall Street Journal reported yesterday.

Hubbard, 44, said through administration officials that personal reasons were behind his decision to leave the administration. Hubbard's wife and two young children live in New York, and he had been commuting between New York and Washington on a weekly basis. Administration officials said that they would have preferred Hubbard to remain in his position.

The announcement came at a time when Hubbard's political capital appeared to be rising. Hubbard is regarded as the architect of President Bush's proposed tax cut on dividends, the centerpiece of the President's economic agenda. Hubbard's role in shaping Bush's economic policy led journalist Fred Barnes to call Hubbard "the most influential chairman of the Council of Economic Advisers in two decades" in the winter 2003 issue of The International Economy.

Hubbard, who holds degrees from the University of Central Florida and Harvard University, has taught at Columbia since 1988. While he mainly works at the Business School, he has also held a joint position in the Faculty of Arts and Sciences since 1997. Meyer Feldberg, the dean of the Columbia Business School, was unavailable for comment yesterday, but a spokesperson for the Business School said that "we're looking forward to having [Hubbard] come back."

Hubbard, a self-identified conservative economist, studies "public finance, managerial information and incentive problems in corporate finance," according to the web site of the Business School.

After President Bush appointed him to the chair of the Council of Economic Advisers in February 2001, Hubbard told The New York Times, "You have to see how these things evolve, but my hope for the Council of Economic Advisers is that it plays a very strong participatory role in developing economic policy," a goal that many people say he has accomplished.

Under Hubbard, the Council shifted from its traditionally academic focus to a more partisan role in developing and "selling" economic policy. Hubbard can regularly be seen on public affairs cable programs and has had several opinion articles in prominent national newspapers on the benefits of tax cuts.

Hubbard's policy advocacy opened him up to criticism from other economists. As recently as Wednesday, the online magazine Slate said that Hubbard's "problem is that his eagerness to enact his preferred legislation has made him willing to adopt the bad logic of the administration's talking points and spin. In Hubbard's book, the best policy is tax reform, not honesty." Hubbard's critics point to his recent arguments that deficit spending has no impact on interest rates, which contradicts what he wrote in his textbook, Money, the Financial System, and the Economy, which is now in its fourth printing.

Hubbard's departure completes the overhaul of the Bush economic team that began last month after the President dismissed Treasury Secretary Paul H. O'Neill and National Economic Council Chief Larry Lindsey, replacing them with Thomas M. Snow and Chairman Emeritus of the University Trustees Stephen Friedman.

The White House has not yet announced Hubbard's replacement, but attention is focused on Harvard economist Gregory Mankiw as a likely candidate. Mankiw's name comes as a shock to many conservatives, as the Harvard economist is an avid proponent of the idea that fiscal irresponsibility and deficit spending result in an increase of long-term interest rates, thus damaging the economy--a stance that may conflict with the Bush administration's commitment to a tax cut in times of decreased federal revenues.

Hubbard's announcement also comes on the heels of a new poll which says that Americans are skeptical toward the Bush tax cut plan. In an NBC News/WSJ poll released on Thursday, 40 percent of Americans said the Bush tax cuts would be only "somewhat effective" in growing the economy. The poll also showed that 49 percent of respondents disapproved of President Bush's performance on economic issues.

Hubbard is not the only Columbia faculty member to have served as chair of a President's Council of Economic Advisers. Joseph Stiglitz, a professor of Economics and author of Globalization and Its Discontents, held the position under President Clinton from 1995 to 1997.