A glimpse inside Biden’s CEA
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Hi, I'm Cardiff Garcia, and this is The New Bazaar. Coming up on today's show. At least economics has a seat at the table. And I saw that very front and center in a lot of ways. It doesn't mean that it always wins the day, but it's a part of the conversation. Martha Gimbel and Gopi Chagoda on how economic policy gets made and sometimes unmade by the U.S. government.

Hey, everyone. Cardiff here, and I am skipping the usual intro essay to this podcast. Our two guests today are both former economists inside the White House Council of Economic Advisors, or CEA. Is it the CEA or CEA? Did you just say CEA? Oh, God. This is like a constant subject of debate of like CBO versus the CBO, CEA versus the CEA. I say CEA. We're going with CEA. I like it. Under Joe Biden, but they're both

out of CEA now and they can therefore spill all the tea.

Martha, Martha Gimbel, I know you. You I know. How are you? I know you as well, Carter. I'm doing well. How are you? Longtime guest on other podcasts that I've hosted. Why don't you introduce yourself to our audience? Hi, my name's Martha Gimbel. I'm a research scholar at Yale Law School. I've sort of bounced around economic policy for many years, including at CEA, which was my second tour there.

Our other guest is Gopi Chagota. Gopi, how are you? I'm great, thanks. Introduce yourself, please, to our audience. I am a senior fellow at the Stanford Institute for Economic Policy Research, and I served as a senior economist at CEA from July 2021 to July 2022.

Okay. So exactly one year. Exactly one year. And Martha, your tenure was like right at the beginning. You were there at the beginning of the administration, if I recall, until at the end of last year? Yeah. So I started January 20th, 2021 at 12.01 p.m. And I left on Friday, February 3rd this year. So on jobs day was my last day. Okay. So two full years. Okay.

Excellent. Lots to talk about. Before we get into it, just want to note that Martha and I once played a game called Ms. Monopoly. Oh, my God. Do you remember this? Yes, I do. This is a game for our audience that hasn't had the pleasure of playing it. It's obviously based on the original Monopoly, except...

It reverses the gender wage gap that exists in the real world. So women start with $20 more or 20% more money than men do. And then the themes throughout the board are like women inventors, women entrepreneurs, and so forth. And what's funny about this is that Martha won. And she beat me by a very small amount, which means that that initial advantage was the reason you won and you felt gross about it. I did feel gross about it.

Yeah, and I remember you and my then co-host Stacey Vanek-Smith were like, I don't know if I like this game very much. Just for people who are listening, like one of the cards you get was like, stuck on a bad date, have to go out the window, lose $20. Like it was not...

The most feminist economics board game that one could have created is the way I would put it. Maybe well-intentioned but didn't maybe execute the hope for plan as well as it could have. Anyways, great. Let's talk about CEA, OK? Yeah.

So the Biden administration is coming in. I want to know from you, Martha, if before you started, since you started on the very first day, you had any kind of meetings with your outgoing counterparts from the Trump administration? Because economists are a more kind of friendly, genial bunch than like other people in politics, I think. Were you able to talk to them? Did they give you any advice? Yeah, I mean, so I started on January 20th, but I had been the head of the CEA transition team for,

which started earlier, obviously. The transition team meetings got delayed a little bit, as I think everyone is aware, while we were waiting for the General Services Administration to certify the election.

There was some drama in the background going on. I remember that. It was a somewhat dramatic transition in various ways. You know, the transition for CEA just looks different than it does for other agencies, right? So I'd be in meetings with transition heads for other agencies, and they would be having all these conversations about, you know, what they were trying to do for career staff and how that was going. And then they would turn to me and go like, so Martha, how are your career staff doing? And I was like, well, Steve is fine. He would, you know, like more Diet Coke.

Brian has some concerns about office placement, but we're working through those. Who are Steve and Brian? Like the only two people on the team yet at the time? Steve Braun and Brian Amorosi are the two main career employees at CEA who have been there forever. Steve Braun is the director of macroeconomic forecasting. Brian Amorosi – Brian, if you're listening to this, I'm so sorry. I've forgotten your exact title. But I believe he's the director of the statistical office. Yeah.

But the point really is, right, I mean, one, Steve and Brian are both amazing, but it's a really small group of career employees. I see. These are the people that work across administrations. They work across administrations. People who have been at CEA under the Trump administration, under the Obama administration, under the Bush administration, we've all worked with Steve and Brian. Yeah. And the people that you were swapping places with, the ones who were leaving, did they like leave a note in the drawer or anything like that with advice the way presidents do? I believe so.

I believe actually that Tyler Goodspeed – I'm actually now remembering this. I believe he did leave a note for CeCe, but I can't remember if I'm like fully hallucinating this or not. Tyler Goodspeed being the former CEA chair, CeCe Rouse being the CEA chair when you joined or who was eventually appointed CEA chair. OK, so –

There was minimal, let's say, interaction with the outgoing Trumpers. Well, so one thing to keep in mind, right, is the way CEA works is we hire on the academic calendar. So every year, generally people start in the summer and then generally leave the next summer. And so what that means is when a new administration comes in, it is largely staff from the last administration who are staying on for the first couple of months while you're getting up to speed.

Does it mean you're understaffed for those first few months until the summer hiring begins? It can mean that because, you know, sometimes, you know, people will leave at the beginning. It depends on how many people they've gotten to come on at the end of an administration. It can be hard to hire in the last six months because people don't know who they're going to be working for after that.

So it can be a somewhat stressful time. I'm sure. It sounds like it. And you were in charge of some of that process, too. The transition team means you have to, like, actually start finding economists who could conceivably come work for CEA once Biden takes office. Yeah. I mean, you're trying to get an entire organization kind of up and running. And one thing to keep in mind also is that files, understandably, get wiped from administration to administration. Right.

So, you know, and it sounds so sinister. It sounds sinister. I mean, to be clear, there's before anyone freaks out, they're stored in the presidential records and all the things, but we do not have access to them. So, you know, you're recreating an entire infrastructure from scratch, even though you do. There are people who are working there on January 19th who are still working there on January 21st.

They've just lost a lot of their files. This is fascinating in part because there was a massive piece of legislation that was to be passed quite quickly after Joe Biden took office. I'm going to ask you about that in a second. But first, I have a quick question for Gopi. Gopi, you ended up joining later. But my question is, as all this was happening, right, as Biden was coming in, you knew there was going to be a new CEA. Was this something that you thought of as a possible career move eventually? Was this appealing to you?

Yeah, I feel like I came into economics because I had an interest in policy. I mean, that in the end of the day is what motivates me in my research. But I didn't really know how the other side of the equation worked. I had spent my whole career in academia doing research, teaching. And at some point in my career, it was about five years actually before I came to CEA, someone planted a bug in my ear that, you know, I was asking them about their experience in Washington and

And they said, you know, you should find a time to serve sometime. I think you would really enjoy it. And that is what got my wheels turning. And so for a few years before I came to CEA, I was thinking about how could I make this work from, you know, family perspective and what would happen with the election and what kind of opportunities could there be? And I

That was kind of what got the process moving. I also was really fortunate to have funding support from Stanford through this program called Scholars in Service, which is actually... Stanford, where you are an economist. That's right. Yeah. So Stanford has this great program run out of the Stanford Impact Labs and the Haas Center for Public Service that...

Yeah.

It ended up being at CEA, and I feel so fortunate to have had that opportunity. One question I have, too, is that a lot of universities have rules, maybe all universities or something, have rules on how long you can be away and still be able to come back. And I don't know if that's something where it only matters if you're tenured already or if that's a senior thing, but was that something that played a role into, like,

okay, I can be gone for a year or maybe two years or something like that. Yeah, I mean, I think that the way that the CEA is staffed is sort of a response to that because a lot of people can take off for a year and come back in academia, but it might be harder to be away for longer than that. But that's why the CEA model is to sort of

have this rotating thing where people are coming in during the summer and leaving at the next summer. It also means that there's almost 100% turnover, though, from year to year, which is, you know, sort of... It sounds not ideal, though, to be honest. It sounds kind of volatile. Because, Martha, you were there for two years, so you must have seen a lot of that turnover, experienced it. Yeah. I mean, so the other time that I was at CA as well, I was there for two years. Under Obama, that's right. Under Obama. And so I've seen the turnover twice. Yeah.

You know, there's pros and cons. You get new perspectives on policy issues. You lose people like Gopi who are amazing, which is upsetting. Silver lining is like the people you don't like have to leave also. I will make no comment about that, Cardiff. One of the things that is really hard is, you know, Gopi can talk about this.

When you come into CEA, part of what you're doing is establishing credibility with the rest of the building as someone who can be really helpful and productive on policy. That's something Gopi was really, really good at. The rest of the White House, when you say the building, you're talking about the White House. Yes, sorry, when I say the building, I mean the White House for people who are going to fact check this, including the Eisenhower Executive Office building, which is where most of the people who we think of as working at the White House work on the side. So it's not physically in the White House. Not physically in the White House, yes. I got you.

But so when you have people who are leaving after a year, you have people who've built really, really strong relationships and are trusted in the building. And you then have to rebuild those relationships, which can be really hard. It can be especially hard in the virtual world that we started in. I didn't really... Because of COVID. Because of COVID. I didn't really appreciate just how important that relationship building was for the job until I was maybe halfway through and I realized that...

You know, you want people to trust you. You want people to come to you when they have economic questions and they're more likely to do that if you have some kind of, you know, existing relationship with them where you've worked with them and they value the way that you've communicated the information that you have to communicate.

One thing to keep in mind about CEA, right, is it was established by law, actually. But there's very little that CEA legally has to do. We have to write the economic report of the president, which is like a 700-page report that comes out once a year. But there's no written reason that CEA has to be included in a meeting. Generally, people do because they're— In a meeting, say, of the president's economic chief advisors or whatever—

There's no legal reason why CEA would have to be involved. Not even that, right? Because they're not going to leave the chair out of it. I'm talking even more like at the staff level, right? Like if the National Economic Council is running a process on economic policy. Let me stop you right there. Let's actually situate the CEA. Let's actually situate the Council of Economic Advisors where the two of you were inside the larger economic policymaking apparatus of the executive branch. So there's CEA and your job is

as economists at CEA is to give advice to the president and to do research and arrive at conclusions and say, this is what we think should happen. This is the good economics, so to speak, right? That's one thing CEA does. And at the top of CEA are essentially three quote unquote members. This is a weird structure, by the way. There's the chair, right?

who oversees the whole thing. And then there's two other members who are very senior people there. When you were there, the chair was C.C. Rouse. And then there are the two members. And at the time, they were Jared Bernstein, who eventually became the chair, and Heather Boucher. So those are the three members. And then underneath them, there's like, what, 50 economists, 100 economists? How many people are there? Oh, that would have been so nice. No, 30? Yeah.

There were about 10 to 12 senior economists, which is gopy, and then about 12 junior staffers. So research assistants, people on leave from graduate programs. Are those PhDs? The senior economists are PhDs. Of course, of course, but the staffers? The staff economists are people usually in PhD programs. So they do not yet have a PhD. They are taking –

a year of leave from their PhD program. Wow. Okay. So like 12, let's say 12 PhD economists, maybe double that when you add PhD student, staffers, that kind of thing. And RAs, right, are also in there. So, and then you have the Brian and Steve, who we mentioned earlier. The career folks. The career folks. Yes.

And then you have people who are what's called front office, who are in charge of kind of running process and making sure that the organization works. But in general, CEA is, you know, between 30 and 40 people. It's not that big. Yeah, okay. Now, the chair of CEA is usually somebody who's always included in meetings when the president is like, hey, what does my economic team think?

But the National Economic Council, which is this whole other different thing and was headed by a guy named Brian Deese, I believe, when you were there, when you were at CEA. He was the head of the National Economic Council there.

They're tasked with coordinating all the economic advice coming from various places, including CEA, but possibly also, let's say, what, the Treasury Department? Who else? Is like Commerce there? Labor Department? OMB. Yeah. OMB, Office of Management and Budget, right? Okay. I always have to stop with these acronyms. I'm like, wait a minute. There's a whole alphabet soup. Right, the whole alphabet soup. But the NEC, the National Economic Council, is tasked with –

Basically taking all this incoming information, including what comes out of CEA, and presenting it to the president. Is that right? They're in charge of running the process, making sure that you're taking the right issues into consideration, interfacing with stakeholders, etc. The way that I kind of describe this sometimes is like NEC is the body. Like they are there. They are getting stuff done. They are like moving things forward.

CEA is like, we're just sitting there and thinking our thoughts and writing our memos. And hopefully those are helpful thoughts and helpful memos. But if they're not, then maybe the staffer who's at NEC working on your issue, Gopi won't be their first call if they don't think Gopi's useful. And so it's great for us if NEC thinks Gopi is useful and is just calling her over and be like, hey, we're starting to pull this process together. What do you think about it?

Got it. Let's go now to the very beginning of the Biden administration, all right, which obviously took office in January 2021. By early March 2021, so less than two months later, the American Rescue Plan Act was passed. There was a lot in this bill. It's like $2 trillion worth almost.

And it included the extension of a lot of provisions that had been part of COVID era policy during the Trump administration, like more unemployment insurance for people who still didn't have a job. It included some other things like the direct payments. I think it was $1,400, right? That was in there. But it also had some other things too, a massively expanded child tax credit, which I know is one of Martha's favorite policies, but it was temporary. It only lasted a year, I believe.

So there was a lot in there, but my question is, how did CEA come up with the recommendations for what could be in this plan and what their effects would be in that small period of time? Given that there wasn't much time, but also you were still staffing up, you were new. How do you sort of get that done?

So a couple of things on that. One, I do want to say, you know, since CEA came up with, this is a very collaborative process, right? Like every, you know, NEC is having thoughts, you're getting input from the Hill, OMB has thoughts on what the budget can stand, et cetera, et cetera. So I don't want to be like, CEA wrote a bill. You know, one thing on the ARP is a lot of the thinking on that happened on the transition. And, you know, this administration, I think, did a really, really good job of

of trying to get as much work pre-done ahead of time so that when people took office on January 20th, that you could really hit the ground running. The other answer to your question is that no one slept, right? You know, I'd love to say that, you know, like, oh, we were just hanging out and we were working nine to five and seeing our families and...

You were not. We were not. That was absolutely not happening. And so part of it is, you know, a feature of these jobs is that you are just going to be working crazy, crazy hours a lot of the time. And particularly at the beginning when there wasn't as much staff, people were just working.

At the time, this was all remote, right? It was all remote. I mean, I will just say on a personal note, because CC Rouse didn't get confirmed until March. So when I started at CA in January, the only new people who came in were me, Jared Bernstein, and Heather Boucher. That was it. And so, and I forget when the next new staffer started, but it was quite some time.

And the day we had the next new staffer start, Jared and Heather sent me flowers basically as a we are so sorry that this has been happening for the last – And good luck. Like there's – we can't solve this, right? Like we have to hire new people. This takes time. But we appreciate it, which was very kind of them.

Okay. So that passes in March 2021. Just a few months later, Gopi rolls into the building, right? All the work is done. Yeah. Okay. But what's interesting, what I want to talk to you about, Gopi, that I find really interesting is that there's this idea that a lot of economists are there to help inform policy. And that, of course, is a big thing that economists do.

Your experience was partly on the implementation of policy side. So tell us what you were tasked with when you got to CEA. Yeah, one big lesson for me is that the policymaking doesn't stop when the legislation is passed. There's a lot that needs to be figured out after that point in the implementation of that money, in the implementation of those policies and a lot of the

the payments that AARP was making. How do you determine who is eligible for what is a huge task that is still-- - Because that wasn't specific enough in the original policy, and so you have to figure that out? How does that work? - It's almost never completely spelled out in legislation, just exactly how the mechanics of something will work. And so the agencies often have to figure that out on the other end.

And in the case of the ARP, I think another big objective was to monitor it and see what was happening, both because maybe there would be a need for more stimulus or insurance.

but also because part of the big Build Back Better agenda was being temporarily put through the ARP. And we wanted to see what its efficacy was on things like the child tax credit, for example. Yeah, let me just take everybody back a couple of years and remind them the Build Back Better agenda was originally designed and it was hoped that it would be

a bill in and of itself. And it had all kinds of things in there, especially I think around like the child tax credit. I think childcare was a big component of it as well. There were all kinds of things in it. So you're there evaluating some of those things. Is that a fair assessment of what was going on? Trying to the best as we could. Yes. Okay. So what are some examples of like the things where you show up and the chair, CeCe Rouse or Jared Bernstein or Heather Boucher is like, Gopi, thank God you're here.

Here's a huge stack of work. Like, what was in the stack? Well, one of those things was the extra health care subsidies that were in the American Rescue Plan that would allow people to reduce their out-of-pocket payments for premiums for health insurance through the exchanges. And

Just understanding what impact that was having on the market and different kinds of outcomes was one of the things that I was trying to understand. It's very difficult, you know, to come up with very clear answer, clear and crisp answer, because in a lot of economics, what we try to do is understand the causal impact of some type of payment on some outcome.

But it's really hard, especially in a situation where there's a pandemic going on and these payments are being made very broadly, how to understand what would have happened in the absence of those payments. It sounds like a very big difference between academic research and policy research, especially when you're in the policymaking circles that –

When you're at a university, you can put together like a years-long study, very careful experiments if that's a part of it or whatever. Whereas when you're in a policymaking environment, you kind of just have to work with whatever's available, whatever's coming out in, I don't know, like the national economic accounts.

whatever economic indicators are being released, and you have to sort of figure it out from there. Is that right? That's exactly right. You're very much constrained by the timeline, by what data you have available, and you just have to answer the question as best as you can within those constraints, which is just very different from academic research where you can

think about the perfect way to examine something over a series of months and then, you know, have a paper, an answer to that question over a few years. And it's just the timescale is...

completely different, which took some getting used to. More ambiguous, probably, right? Like in terms of your conclusions, like, okay, is this definitely right? Or is this the best we can do with what we've got? Yeah, although ambiguity is also difficult in government. You know, people really want an answer. And so sometimes they push you to have an answer, one number, and instead you're more comfortable with a range or something. But that doesn't always...

fly. So you kind of have to do the best that you can. So the complaints about the two-armed, one-armed economists, whatever, the famous thing about like how Harry Truman was like, give me a one-armed economist. These people are saying on the one hand, on the other hand, like it applies even at the level of like economists in CEA. I think so. Yes. Yeah. And then when you do something like that, and let's say it filters up,

And then the politics people get involved. Do they ever then say like the thing where you're like, I'm not comfortable saying that. And then they're on TV or whatever being like, yeah, this definitely had this amazing effect. Americans love it, et cetera. This is where I think that just the leadership of the CEA is really important. I felt very comfortable telling Cece and Heather and Jared when what were the limits as to what I was comfortable with saying and

And then they wanted to know that. They didn't just want a particular answer. And they saw it as more of their job to kind of go to the outside of CEA world sometimes. And they would have your back on that, which was, I think, very, I don't know. Oh, important. Comforting, I would imagine. Yes, absolutely. That, you know, I felt...

I didn't feel so pressured to say one thing or the other because I felt like the leadership of the CEA wanted to really know the true answer to something. And you were the senior economist in charge of, like, health issues, right? Healthcare was what I started with.

Oh, I was so hoping we were going to get to this. That's what you started, but not what you ended with, I take it. Not what I ended with. So I will say this on Gopi's behalf. So Gopi had a problem, which was that she was too good at her job. And so...

We ended up in the situation where we would like have a random topic that didn't like really fit into anyone else's portfolio or was like maybe a little bit more controversial and we needed someone who we knew could handle it. Gopi was the she'll figure it out person. Yes, Gopi was the she'll figure it out person. I think Gopi started to develop PTSD about me like knocking on her office and was like something terrible is about to happen. It's not another thing. It's another thing, right.

Martha's here. It's a whole other thing. You don't want me in your office. But so, you know, I joke, but, you know, Gopi did take on a lot of things that were, I don't want to say outside of your comfort zone because you did them very well, but, you know, were not your academic research that you had experience. Oh, I would say outside. But also, like, that's part of being in government, right? Like being willing to kind of

say, like, okay, this may not be my particular area of expertise, but I can figure out a lot about it in a short time frame. I know who to call, and I can provide a perspective on this that is important.

That also seems like a big difference between academia and policymaking is that actually in policymaking circles, sometimes you're either encouraged or out of sheer desperation forced to go outside your comfort zone. In academia, it's like, no, stay within your very narrow niche. Exactly. I kind of joke about it and say that if I had been at Stanford that year and someone was talking about inflation, I would

I would have been like, la, la, la, inflation. I can't hear you. And you just could not avoid that if you were at CEA during the time that we were. Of course. And Jared, if you're listening, thank you for bringing me back to first principles on some of that because –

This is Jared Bernstein, who's now the CEA chair. Yes. What did he say to you when you say that he brought you back to first principles? What did he say? I mean, he reminded me of some of these topics I just hadn't thought about because, you know, in some ways I had the luxury to just work on what I wanted to in terms of research and not necessarily what is the most pressing issue of today, right? And

inflation was something that touched almost everyone's work. You would think, oh, healthcare, inflation, what's the connection? But there were some that I didn't really see until I was in it. So it was, I learned so much from that experience. And I feel like I grew as an economist too, from being thrown different topics and thinking about, you know, what is the supply side? What is the demand side? Learning to ask the right questions and know

where to find people who were more of experts is part of the job. I want to ask you about something specific. Martha had mentioned that you'd worked on OSHA regulations. OSHA stands for Occupational Safety and Health Administration. Yes, but these are the workplace regulations that keep a workplace safe, essentially. You were doing this during a time of COVID, of course, still. And the vaccines were out, but we didn't know exactly what the path was.

what path COVID would take. Would it go away entirely? Would it reemerge? It did, in fact, reemerge. What was that experience like? Yeah, so when I came in in July 2021, there was a lot of

talk out there. Maybe the pandemic is over. You know, vaccines were widely available. Case rates were very low at the time. I think there were some people who were ready to kind of turn the page. We all wanted to believe that, right? Yeah. We all wanted to be like, I'm vaccinated. This thing's a wrap. Yeah. And that just wasn't the case. Go ahead. And instead, the Delta variant sort of hit and it hit certain places very hard. This was winter of 2021, right? That was Omicron. Omicron.

Oh, okay. This was before that. This was the Greek letter before that. Multiple waves, Karthus. Yes, okay. So it was Delta, then Omicron, both in 2021. Correct. Yes, okay. Yeah, so when the Delta wave hit and...

I think a lot of people noticed that it hit particularly hard in places that had lower rates of vaccination. I think the administration was thinking about what levers can we pull to try and mitigate further harm from this virus, both from a health perspective, but also to get our economy back where it needs to be.

And so one of those things was to authorize OSHA to write new standards of workplace safety that had to do with COVID vaccination and testing. And so I remember this very vividly. There was one day where my phone rang in the middle of the day and Martha said, can you come down right now? Oh, God. Wouldn't even go to the office. That's how bad it was. We

Where you're like, is no an allowable answer here? Anyway, so what happened? So it was the day that the president was scheduled to make a big speech about COVID and new actions that the administration was taking to combat COVID spread. And Martha basically told me there's going to be this aspect of what he's going to talk about. You're going to be on point. And it's going to be great. Wow.

And I went back to my office and I looked up OSHA and what does it do and what is its authority and what is this emergency temporary standard thing? I had no idea. Oh, my God. You never told me this.

So you were starting from literally like Wikipedia. Let's see what's going on. Pretty much. Pretty much. And then I was terrified because I was like, I don't know the first thing about how to evaluate a big policy like this. But in hindsight, it was a great experience because it was a very fast moving process that took place.

You know, in the beginning part of my year there, which I saw from beginning to end and really helped me understand the role of an economist at CEA or within the government in informing how these regulations get passed.

So the idea is you need to be able to fully evaluate kind of the costs and benefits of such a standard and try to kind of figure out what will happen if this goes into effect. So you did make economic estimates for, okay, if we put into place these regulations, it'll have these costs on some companies because it does cost money to put in place new rules and to change, let's say, I don't know, how you clean a factory or how you ventilate a class

room or whatever it is, right? And then on the other side, what would be the economic benefits if the economy avoids a worse COVID outcome because these rules are in place? Is that how it works? Yeah. I mean, a lot of those things went into the writing of the rule and the standard. And, you know, it was one of those classic examples of something where there were no papers about this that you could go and consult that would tell you what the answers were.

You had to really figure out what can I learn from previous literature that was talking about, say, flu infection and how that affects, say, the healthcare sector, vaccination requirements in the healthcare sector. You had to rely on some just—

surveys of companies, what would you do if there was this rule that would require testing or vaccinations and try to understand what will happen as a result and do the best that you can. And, you know, the pressure is kind of guiding the way you do this analysis are you don't want to overstate the benefits. It could become an easy litigation target. You also don't want to understate the benefits because then people will be like, well, why are we doing this in the first place? So there's kind of a

a balance you have to hit. You just really want to have it as accurate as possible. What were some of the lessons, and this is a question for both of you actually, what were some of the lessons you learned about how to present your analysis, both to your bosses at CEA, but also with an eye towards what they're going to eventually have to recommend to the president himself or the president's team? Very early on, I...

I had to even ask, can someone give me an example memo? Because I didn't know how to write a memo. Like a literal template of a memo. Yeah, I was used to writing academic research papers. And then I learned very quickly because of all the red marks on my memos that you really have to get to the point very quickly early on. And then you can expand on it, but people have limited time. And

You want to make sure your message gets across as quickly and efficiently as possible. You sound like a journalist. Was there an emphasis, I'm assuming, on clarity –

No jargons and acronym and everything. It's like this needs to be understood by a bunch of dorks who don't know anything about economics. Is that right? Well, certainly if you're writing internal memos, then you could assume some level of, you know, understanding of economics. But for sure, if you're writing to people who are not economists, you can't necessarily use a word like elasticity and expect that people understand what you're talking about. Yeah. Yeah.

I want to ask a question now about inflation. Okay. Here's another little revelation for you, Go, but you may not know this. I spoke with Martha before she left CEA, and one of the points she made, I think it's okay to reveal this, is that she didn't want to leave until inflation was headed in the right direction. You felt a sense of completeness. I'm not sure.

You felt like you wanted a sense of, hey, I did all I could while I was there. I think what Cardiff is saying is that I personally brought inflation under control. And any breakouts of inflation that may happen in the future are entirely because I left. No, it's because I left. It's because you left. Specifically, there's a causal chain here, right? It's because I'm not there. Gopi's going to do an analysis of inflation versus Martha being a CEA and-

We're going to find a causal relationship there. I bring up inflation because I have to imagine that that was maybe the central topic going on inside of CEA for a long stretch of time. And in fact, Gopi, you just said that one of the things you had to expand into was from healthcare to doing some research about inflation as well.

And if I can take listeners back a little bit in time, right, like inflation really became a problem last year. And there was a debate that's very much still ongoing, by the way, about the extent to which the inflation problem of last year was caused by inflation.

the supply side and specifically a lot of like supply chain bottlenecks that were the result of what was happening with COVID all throughout the world versus the demand side. In other words, was fiscal policy and monetary policy perhaps being too stimulative? And obviously the answer could be some of each too, may not be one or the other. Like I said, it's still a kind of ongoing debate amongst economists and not just amongst like politics types, right?

And I have to imagine that inside of CEA, there was a lot of discussion about, okay, what can we do to help inflation? And also, what can we do to help inform the public about what's really happening? Is that right, Martha? So I think there's a couple of things. I mean, one is obviously not going to get into specific conversations. But there's the, like, what is going on? What is driving this? Where do we think this is coming from conversation? Right.

And then there's the what can we do about this from a policy perspective? And there I kind of want to break it out into two things, and Gopi can talk about some of this. You know, some of it is the, you know, what can we do about the inflation specifically? Right.

But some of it also is about prices. And I think to a normal person, those things feel very, very similar. If you're addressing inflation, you're addressing prices. In an economic policy context, they can actually be quite different, right? So you can be at a time when people are very price sensitive and hurt by rising prices, you can be taking action on prices that isn't necessarily about inflation and certainly not about the most recent economic

inflation bout, but that help people and help people feel that they have more money in their pocketbook.

What's a good example of that? Because I love this point. One example would be the capping of insulin for some people in the Inflation Reduction Act, which I will, I'm looking at Gopi, sorry for people who, but, you know, there are things like that, that- Where you're affecting a specific price of something that really matters to a lot of people, even if it doesn't have a massive effect on the overall inflation level. Is that what you're saying? Yeah. You know, there are structural issues there, but it helps people and that's a price that they can see in their everyday lives-

And that really makes a difference. Yeah. Gopi? Well, I think it highlighted the bout of inflation kind of highlighted a lot of ways in which the costs that, say, families have for childcare and other things are overtaking more and more of the household budget and really highlighted some of the policy problems.

priorities that the administration was thinking about a lot. So while they don't necessarily impact inflation immediately, it's kind of the idea that, well, here are some ways that we can think about addressing prices in a more long-term sense. Yeah.

I have a question that requires me to do just a bit of editorializing, and you don't have to agree or disagree with the editorializing. My question is about what was happening inside CEA at the time. It seems like there actually was...

some overlap between the economic agendas of the Trump and the Biden administrations. China trade war is one, right? Preaching resilience against disruptions to global supply chains is another. Infrastructure Week was like a thing. It was like an ongoing joke during the Trump administration because it never happened. But Joe Biden actually got a bipartisan infrastructure bill passed, right? So in some ways, it was almost like the realization of something that had been hoped for in the past.

Agree again or disagree with that. My question is more about the fact that at least a lot of economic policy does seem driven by public sentiment. And that's a good thing too, right? We live in a democracy. You want to take societal feedback and incorporate that into the agenda. And my question is inside of CEA, to what extent are you also reading the tea leaves of what the public thinks and saying, you know what, this makes sense. Who cares if the previous guy did it or the guy even before that wanted to do it?

To what extent were you paying attention to that, just to public sentiment? I think this gets back to the point we were talking about earlier about NEC running a policy process, right? And when you're running a policy process, each group is supposed to be bringing something to the table. CEA's job is...

is to bring economic analysis. I don't think the Office of Public Engagement, which is, you know, engaging with stakeholders or comms, the communications people, would have been that interested in my thoughts on communications strategy, which to be clear is fair. I'm very bad at communications. But at the same time, you know, if they,

And they did all the time. If they were writing a speech and they had a question about how to describe inflation, I expected them to call me and make sure that that was described correctly, which to be clear, they did. A lot of our jobs is being on the phone with comms to make sure that the talking points were correct. And so I think there's a difference in your question about...

how the administration as a whole is thinking about things as opposed to CEA. CEA's job is to provide unbiased economic analysis. That is what we are there to do. It doesn't help anyone if we're walking in the room and going, this is our unbiased economic analysis, but according to our vibes, this other thing would perform well in Ohio. We don't know anything about that.

And so that really was not our focus. Fair, fair. The way I think about your question is some people come to a job like CEA and they might leave sort of disappointed because, you know, the best economic policies maybe didn't happen or something. I have a much more...

glass half full take, which is at least economics has a seat at the table. And I saw that very front and center in a lot of ways. It doesn't mean that it always wins the day, but it's a part of the conversation. So in a previous job, I want to emphasize this was not in this most recent job. A boss of mine went into a meeting with a senior policymaker and they were having a very contentious debate about something. And there were a bunch of stakeholders there.

And at the end of the conversation, the senior policymaker turned to my boss and said, I totally hear your perspective. You've convinced me on the economics. But because of these political considerations, I've decided against you. And my boss's response was, great. My job is to make sure that you are able to balance the many different considerations that you have discussed.

coming at you. And if you understand the economic issues here and you've decided to make a different decision because there are other priorities as well, that is fine. But it is my job to make sure that you understand the economics underlying your decision.

I bet it got super annoying, though, when economists on social media or out in the public or on TV or whatever would be like, yo, what are they thinking? What kind of advice is Biden getting? This is BS. And I bet you guys were like, oh, no, we told them the politics people overruled us and that's how it goes. Wait, can I actually take this moment to address a controversy? Please. That I would like to address. Oh, my God. I can't wait. So...

People may not remember this, but there was a graph that the administration issued, Gopi remembers this, about GDP growth. What year was this or when? 2021, I think. I think it was 2021. And we were talking about how great GDP growth was. And the axis on the graph was 1, 2, 3, 4, 5, 5.5, 6. Okay.

Evenly spaced. Definitely evenly spaced. And the internet lost its mind and was like, the Biden administration is like specifically trying to like screw with the y-axis in a way that makes them look better. Why would they even do this? It's already a good number. They're so horrible, et cetera, et cetera.

Graphs that come out from the Council of Economic Advisors are made in Excel. So you can't screw with y-axes like that very easily. Graphs that come out from the official White House feed are done by the graphics people. And they do those in Adobe Acrobat. It is very, very easy when you are hand-drawing numbers on there to make a mistake.

This is actually a thing that I – this is not the first time I've seen this happen, actually. It's happened in the Obama administration as well. It's a thing that I tell junior staff when they come in and they're fact-checking. They have to actively look for – because normally you don't think to check the spacing on the y-axis. It would just be automatic. Yeah.

But they had to. And so I would like to say to everyone who got really mad at that graph, it's not because a specific decision was made. Someone misdrew a number and no one caught it before it got sent out. And I am done now. This is great. I like that you just had that in your back pocket for like two years. It's because...

Because people thought it was like a specific nefarious thing. And like, I think this is in general a thing about government, right? Is people think that it's, you know, some nefarious plan that's been built out for six months. Like, no, some 25-year-old was going fast and they made a mistake. That's fantastic. Any others like that? That's the main one. That's the big one. That's a big one.

By the way, something that you realize when you do this job for long enough is like you read people's like body energy, right? Like their body language. You know, when we were talking about inflation, Martha, you kind of like your arms. You had your arms crossed. Your voice dipped like an octave or two. It was a little softer. Like you now want to be talking about inflation again. But this...

You exploded onto the scene. Full power posing my way through the GDP graph. Fantastic. But no, in all seriousness...

There is like obviously a very large contingent of economists and economic commentators on Twitter, now X, Substack and some of the other social media accounts as well. And of course, they're in the newspapers and they're going on TV and everything. And do you ever reach out to them when they're like, hey, what the hell is going on? And be like, OK, here's the story, right? Like here's what's actually happening. Because it's so easy to say, OK, the Biden administration did this.

what the hell is going on. But you don't want to be confused with someone who gave bad advice as opposed to, hey, there are political considerations here as well for why certain policies get enacted or pushed forward. Gopi's looking at me, so I'll take this one. You know, I think there are a lot of things that are really, really hard about being a policy staffer, really hard. One of them is

that you may not always agree with every decision that your boss makes. I would like to emphasize that I personally have agreed with every decision anyone I've ever worked for has made. And, you know, your job when you work at CEA is to go into the room and vociferously make the case for something on the economics. And then if...

they get decided against you. Your job is to make sure that that policy gets implemented in the best way on the economics moving forward. And that can be really, really hard. And it can be really, really hard at cocktail parties where you'll be standing there and someone will say to you, can you believe, you know... Why haven't you repealed the Jones Act yet, dude? Yeah. I was going to go with the fake one, but sure, let's go with the Jones Act. And...

You know, you can't say, I know, I think that X policy is the worst thing this administration has ever done and I don't support it because... Because you worked there. You worked there. And then the next thing you know, someone said something to someone else and there's a news story about, you know...

CEA didn't support X policy, which again, to be clear, CEA has always supported all policies at all times. And so I think that can be really, really hard for people, particularly economists who are used to being able to be independent and being able to be known for their own particular views. But it's a really important part of being a policy staffer, and it's a really important part of

of being an effective policy staffer. If people think that... Maintaining discretion. Maintaining discretion. And, you know, if people think that if a policy process gets decided against you, you're going to immediately start complaining and bad-mouthing about it to everyone, they're not going to involve you in the next one. But it's hard. Yeah, speaking of maintaining discretion, Gopi's been filibustering on this question for a little while. What do you think about all this? Well, no, I... That...

Takes some getting used to, I think, if you're used to talking freely and, you know, you're sort of talking for yourself, not for an institution. When you join the CEA, you're speaking on behalf of an institution. You have to remember that all the time. I mean, even we were sometimes told in the subway, don't be talking about work unless you want it on The Washington Post.

not that everything you talk about is Washington Post worthy, but just that you want to be careful that you're not just representing yourself. You're also representing the CEA and the administration. So, you know, there's some responsibility that comes with that kind of role. Uh,

One question for – same question for both of you. Your one single favorite thing that you worked on while you were at CEA, Martha? Oh, make Gopi go first. Gopi. Martha's turned a filibuster for a little while. All right. All right. Well, so one of these questions that was just constantly being asked is how to understand the effect of COVID on the labor force.

specifically COVID infection and long COVID, and how do we measure something like that? And it was one of these things that, you know, it was a really important question that needed to be answered, and yet the data available was just not what you would ideally want. And one of our amazing junior staffers noticed that in one of these publicly available data sets, the Current Population Survey,

There was something that measured your absence from work for health-related reasons. And if you looked at that series, it was spiking exactly when COVID cases were spiking, which the advantage of that is you have some information on what's happening to that before COVID, during COVID, and then you can follow these people after they've had a health-related absence and try to understand something about their labor force participation.

And so, you know, we worked on that and it was –

I think, a very creative way to try to answer that question when there wasn't really good data available to answer it as well as you might want. And it ended up being something that we actually worked on. It's a working paper now, right? Yeah, it's published. It's published, okay. So we expanded on the analysis outside of CEA after we left and ended up publishing it because I think it has academic interest as well. That's great. Yeah, we'll definitely link to that in the show notes. By the way, it occurs to me that I've been getting my –

politics terms mixed up. Filibustering is when you talk a lot and say nothing. It's not when you just sit something out and let the other person talk. Right? That's what I meant. So, Martha. I'm not saying it was always the most fun.

But I do think I learned really a lot from working on inflation for two years. It was not something I knew a lot about beforehand. And not only the data sets, but just the analysis that we did and the concepts we were thinking through changed.

And how quickly we were having to adjust priors and take in new information, that was really great. And I do want to shout out here Ernie Tedeschi, my office mate who worked on all of those with me, from whom I learned so much. You know, when you and Ernie joined CEA, it was funny because those of us who'd gotten accustomed to seeing your analysis on Twitter quite a bit, a lot of us were like, what the hell, man? See?

CEA is just taking away like all our favorite people on Twitter, like Twitter econs taking a real blow here. You were all disappearing. And now in your case, like you're out.

But Twitter has fallen apart. Nothing to go back to. Can I answer, provide another answer to that question, which is it's it probably wasn't my favorite thing that I worked on. But it was something that if you had told the Gopi of pre-July 2021 that she would be writing a memo on this, she would have not believed you.

But there was this point where lumber prices were increasing. And I was at that point working on competition policy. Wasn't this Canada's fault or something like that? I forget exactly what was going on. There were a lot of interesting economic issues behind this price of lumber increasing that I had no idea about. I had no idea.

I didn't even know what lumber was relative to timber. And there was this beetle infestation. We had terraced or something on lumber for a time, or maybe they're still there. What was going on? That part I don't know exactly or don't recall, but there was like this beetle infestation in Canada and British Columbia, I believe, that affected the supply of lumber and then sawmills in the South. Anyway, it was super interesting and something that I knew nothing about. And I learned and I just...

Would have never, ever thought about if I hadn't been at CEA. Let me ask this next question diplomatically. I want to ask what your biggest disappointment of the experience was, or if you're more comfortable with the phrasing, what you might change about how things work inside of CEA or the overall economic policymaking apparatus. Yeah.

You know, this is going to sound like a cop out, but it really wasn't. I think one of the things that was really, really hard, particularly when we started, was that we were still in COVID. And there were so many things that are great about working at CEA that really do involve in-person interaction. And I don't just mean, you know, the things in the hallways, also like some of the perks of working at the White House, of like getting to go to certain events and things like that.

And people particularly who were in that first cohort really missed out on those because they weren't happening in the same way. And that's particularly hard to be clear. It's like an incredibly privileged position to be in, to be working in these jobs. But also like you're working really hard and it's nice to be able to say to staff like, OK, but you can like do this fun thing where you'll be able to like see the president from a distance. And we couldn't do as much of that. And that was...

I'm glad that that's back now, but I'm sad that our staff missed out on some of it. This might sound like a cop-out too, but I feel like...

I don't know what the optimal length of time is for someone to spend at CEA, but it seems like it's something a little bit more than a year, maybe a little bit less than two, because it takes a while to just get up to speed and hit your stride. And then it can sometimes feel like you've just hit your stride and then it's time to rotate off. I mean, when I was kind of...

briefing the new person who would be taking over a lot of my portfolio, I realized as I was speaking to her, I didn't know any of these things before I joined. And she was looking at me with, you know,

deer in headlights kind of thing. And I just reassured her that I was exactly in the same position, except no one was telling me this stuff because, you know, in the beginning of the new administration, there wasn't that handoff really. So I don't know what the ideal time is. I think the longer you serve, the more burnt out you can get. So there's that pushing in the other direction, but it may be a little bit more than a year. Yeah.

because I still felt like I had something more to do when I had to kind of head back. Do you feel, because you worked there, a kind of lingering pressure to be loyal now in the aftermath? Like if somebody asks you, hey, do I agree with something that the Biden admin's doing? Well, you're out now, so you can be critical, but you also worked there. Do you worry about that when you're sort of trying to assess economic policy after the time you left?

I don't feel very conflicted in that way. I don't think that it's going to make headlines if I say something that is in somehow, you know. Let's make some headlines. Let's try it. Let's go for it.

So I don't feel like I – even while I was serving, internally, I never felt conflicted, honestly. I felt like I could say what I thought about a certain policy, and I still feel like I can, you know, say what I want about a certain policy. So I don't feel terribly conflicted about that. So, I mean, I feel like I have a better understanding of –

of why something may not go the way that economists think they should go. And in those kinds of conversations where someone's like, can you believe the administration's doing this? You know, you can kind of respond with, well, it might be this consideration or that consideration, and you have a better kind of sense of what the discussions may have been around that without actually knowing even. But other than that, yeah, I still feel like I can maintain...

my integrity as an economist. Actually, this is one quote that really stuck with me. Cece at some point said, I want this to be a CEA where you don't have to give up your PhD when you leave the door. So she wanted good, solid evidence, and she didn't want her staff to lose any credibility from serving in her CEA.

So when I will say my job at CEA was to provide unbiased economic analysis, I consider that now my job is to provide unbiased economic analysis. And so...

you know, no, I'm going to, you know, the data are the data. And that's one of the nice things about being an economist in some ways. Do you spot the pattern sometimes where you're like, oh, they're announcing this thing. I bet anything CEA is pissed right now because the politics people took over this one. Well, but can I actually talk about one policy, you know, on Gopi's point there? You know, I think an example of a policy that a lot of economists really, really want is a carbon tax, right?

A carbon tax is not a huge winner politically, I think, is sort of the general consensus. And so I think many economists kind of sit around and be like, well, if we could just have a carbon tax, all of our problems would be solved. And like, oh, well, and then, you know, return to their papers. And, you know, the administration says,

did some thinking around this. And one thing that came out in the last budget was, I'm going to get the exact name wrong, but basically a crypto mining tax. I think it was a digital assets mining tax is the technical name. And basically what this was, was, you know, at a certain point, if you were crypto mining, you had to pay a tax on the energy you were using. Right.

For listeners who don't know, crypto mining uses up an astonishing amount of energy. So much energy. It's a huge contribution to like carbon emissions. Yeah. And even if you're using clean energy, then you're taking up that energy and other people have to use dirtier energy. It is a huge problem. And this is a policy CEA was excited about. And I will actually give a shout out here to two junior staffers, Ryan Cummings and John Eislin. John, I know I always mispronounce your last name.

Because they really worked on it and did a lot of the thinking on it. Not to say that the seniors and everyone didn't as well. It was a group effort. But that was one where people were trying to think really creatively, okay, we're not going to get this thing that many economists want. But what's a version of it that like many people can agree on? And this was a version that ended up getting proposed in the president's budget. Nice. All right. Well, that was a good story.

You know, there's the political constraints, like why a carbon tax doesn't fly. There's also the legal constraints, which I feel like I did not have any appreciation of before I went to CEA. Just what the federal government has authority to do is in some cases very limited. Yeah.

And you have to kind of look for these levers that you have or carrots or sticks that you can use because sometimes it is not the perfect lever, but it's the one that you have at your disposal that matters.

And that was very eye-opening. Last question. Are there any others? Like just things that people, especially in academia perhaps, but just in general with the public, don't get about policymaking that you now better understand because you've been inside CEA.

So I have to admit, this is kind of embarrassing. I had no idea the whole regulatory process really existed before I was at CEA. You know, I had a very naive view of policy, which is it happened through legislation and then poof, you know, you snap your fingers out, ACA was passed and then boom. And that's just not at all true. And so much policy happens through that implementation process, through the regulatory process.

And this is actually a process that has a place for people to provide public input into it.

And that was also something I didn't have appreciation for until I was on the other side. And then there would be a proposed rule that was being discussed by an agency. A few months later, they would receive comments and they would actually sift through those and actually read them and actually try to address them. And I'll bet if you didn't know that, that that is a really widespread misunderstanding amongst academics. I have had countless discussions.

conversation since I came back to Stanford with people both in Stanford and outside. And I think a lot of people have no idea that this actually is a place where researchers can have more of an impact. You know, I think in general, particularly when you're not close to the policymaking apparatus, which is most of us, you know, it's really easy to demonize people and say, you know, like, how could they make such a stupid decision? Or, you know, why didn't they think about X?

And I will just emphasize, you know, these are being done by people who generally really do have the best intentions and are really there trying to figure out the right policy that will make people better off. And sometimes mistakes get made, particularly when people are sleep deprived. Or just because there's uncertainty. Right, there's uncertainty. You're never going to get everything totally right. But people really are there to try to do the right thing. All right.

This has been a real pleasure, super enlightening, super entertaining. And the two of you are just wonderful. Thank you for being here. Thanks, Cardiff. And that's our show for today. We're going to post links to work from Martha and Gopi in the show notes for this episode. And it will include work that they contributed to while at CEA and a bunch of other stuff too.

The New Bizarre is a production of Bizarre Audio from me and executive producer Amy Keene. Adrian Lilly is our sound engineer. Our music is by Scott Lane and DJ Harrison of Subfloor Studio. Please follow or subscribe to The New Bizarre on your app of choice. And if you like today's show, leave us a review or tell a friend. It really is how people find out about us. If you want to get in touch, I'm on Twitter slash X, I guess, as at Cardiff Garcia. Or you can email us at hello at BizarreAudio.com.

And we'll see you next episode.