The President's Most Excruciating Decisions
WHY YOU SHOULD CARE
Wouldn’t you like to know what gives the president gray hair?
CEO and co-founder of OZY
By Carlos Watson
Gene Sperling is soaking up the SoCal sun these days, but he still keeps one tanned finger on the pulse of the nation’s capital. It’d be hard not to. After all, Sperling helped craft economic policies that now affect the lives of most every American, from job-creation initiatives to China’s entry into the World Trade Organization. As former director of the National Economic Council — think of it as the Oval Office’s in-house think tank — Sperling was the trusted economic adviser to Presidents Bill Clinton and Barack Obama. He was involved in Hillary Clinton’s 2008 campaign too, and though these days he’s working for Airbnb and Pimco, Sperling is advising HRC once again.
For now, the onetime ball boy for the University of Michigan basketball team is collaborating with a bipartisan group of wonks on the project Moneyball for Government, in which they’re trying to solve a particular problem: There’s no evidence whether $1 of $100 in government spending is being used wisely. Last week, Sperling, 56, spoke with OZY’s Carlos Watson about how big data can influence government, the hardest part of being president and how he met his wife through The West Wing — the show, that is. An edited version of their conversation follows.
OZY: President Bill Clinton told me he studies economics for an hour every day. What are a few things that presidents learn about economics that they didn’t know before?
Gene Sperling: First of all, presidents end up learning far more about federal budgets than they could’ve ever imagined. You are the nation’s CEO. It’s your budget. A president also has to learn how to deal with crisis and make the best call amid it. For Clinton, it was the Mexican peso crisis and the Asian financial crisis. Obama had to be able to throw himself into a degree of arcane detail on issues from A president also has to learn how to deal with crisis and make the best call amid it. For Clinton, it was the Mexican peso crisis and the Asian financial crisis. Obama had to be able to throw himself into a degree of arcane detail on issues from AIG to whether to bail out Chrysler that were not predictable 18 months before.
OZY: Is that what gives them the gray hair?
G.S.: It’s trying to understand what the ideal choices are and what’s the closest to our ideal that we can get given the political restrictions. Unlike the CEO of a company, it’s not about the perfect policy, but the most perfect thing that can be passed into law. How to do this is excruciating, and it’s the most consequential type of decision a president makes. That’s what gives them gray hair.
OZY: So how exactly does the concept of “Moneyball” fit here? Using data or evidence to support policies doesn’t exactly sound controversial.
G.S.: That’s because being committed to evidence is not a partisan position. Still, those of us who believe in progressive government have a higher stake in establishing that dollars deployed are meeting their stated purposes. Just because something didn’t work doesn’t mean we should say government should get out. When we fund research for cancer, for instance, we don’t simply give up if a particular experiment doesn’t pan out. As another example: Studies have found that raising the minimum wage can be “pro job,” because higher wages reduce turnover and increase motivation. That goes against the textbook view that any higher price of labor would cost jobs.
OZY: What are two or three tools a president has to shake up the economy that most of us are not aware of?
G.S.: Presidents have the ability to mobilize disparate people in our society to act on common purpose. Think of John F. Kennedy asking the bar community in 1963 to do pro bono work on behalf of the civil rights movement. Bill Clinton made the case for refundable tax credits, and over the past 25 years, one of the most significant progressive policy achievements has been the expansion of refundable tax credits — it lifts some 10 million people out of poverty. President Obama called on colleges to increase efforts to help low-income youth and helped change the hiring practices of major companies. Some people call it a bully pulpit, but it’s more a call to action.
OZY: Changing course, who are one or two of the most creative policy thinkers out there that most people don’t know about?
G.S.: Someone who may have already done research that will win him a Nobel Prize is Raj Chetty from Harvard University. He’s been remarkable in using data to help us understand economic mobility. And two of the most creative people at blending rigorous economic analysis with viable economic policy are Jason Furman [Obama’s chairman of the Council of Economic Advisers] and Brian Deese [another Obama adviser].
OZY: And what’s something that people don’t know about you?
G.S.: A lot of people know that I consulted on the TV show The West Wing. What they don’t know is that during my interview, in the first 60 seconds, I met a TV writer who is now my wife. The real West Wing is the highlight of my professional life, but the fake West Wing is the highlight of my personal life.
An earlier version of this story misstated the name of a company President Obama considered bailing out.