Why America gave up on economists

The US’s two major parties can agree on one thing: They don’t have much use for economists anymore.

President Joe Biden ignored economists’ warnings about the risks of inflation. President Donald Trump dismissed economists’ arguments against his tariffs. And now, rising Democrats are backing price controls, even though mainstream economists aligned with both parties say they typically backfire.

Economists’ way of thinking has fallen out of favor among the political class more broadly. The right has embraced Trump’s zero-sum worldview and lost faith in expertise generally. Many progressives have rejected economists’ fundamental focus on trade-offs and the unintended consequences of policy interventions. Both sides are down on the free market.

All this marks a major change from many previous decades of US policymaking, in which economists were viewed as having a special sort of status among experts. Believed to epitomize intelligence and technocratic competence, their recommendations were viewed as more high-minded than those from ideologues or grubby interest groups. 

Economists were the gurus of growth — and while, of course, they weren’t always listened to, it was widely believed that a president who wanted a strong economy should take their counsel seriously.

Not so much anymore. Economists, Ezra Klein has written, were “simply far less influential” in the Biden administration, which turned instead to elite lawyers, activists, and the nonprofit world for expertise. And Trump isn’t particularly interested in economists’ recommendations — he has his own vision of how the economy works, and trusts it more than theirs.

The reasons economists fell off their lofty perch are in part personal: Neither Trump nor Biden enjoys highfalutin academic debates (in contrast to Obama and Clinton, who did). They’re in part coalitional: The free market GOP establishment was roiled by Trump’s rise, while Democrats accommodated a rising progressive faction who blamed neoliberalism for the disappointments of the Clinton and Obama presidencies. And the reasons may also be partly structural, connected to bigger-picture changes in the economy, politics, or the information environment.

“I tie it to the rise of populism on both the left and the right,” Greg Mankiw, a Harvard economist who advised George W. Bush’s administration, told me. “Both have a degree of skepticism toward traditional economic viewpoints from both the center-right and center-left.”

“There are certain commonalities between Biden and Trump, in their rejection of a technocratic approach that thinks seriously about tradeoffs,” said Jason Furman, a Harvard economist who advised the Clinton and Obama administrations. “I often find myself in despair about the direction.”

It isn’t surprising that economists would bemoan their own loss of influence. But the question remains: Can a political system that sidelines economists deliver a prosperous, growing economy? 

So far, the results have not been promising. The public’s economic confidence turned sharply negative under Biden, as inflation wrecked his presidency and sunk his party’s 2024 chances. It’s remained quite negative after Trump’s return, turning what was his greatest political strength into his greatest weakness.

There’s another problem. Even if you think mainstream economists have gotten a lot wrong in recent decades, their basic toolkit — modeling that assesses incentives and market behavior — is highly useful if you want to design policies that will actually work. Sidelining economic analysis, in practice, means we’ll get more badly designed policies pleasing ideologues and interest groups — policies that will do little to help the American people or deliver the growth the country needs.

The world of yesterday

Economists’ influence pervaded the policymaking world for much of the 20th century and into the beginning of the 21st.

The dominant economic thinking varied, depending on the problems of the time and the party in power — from laissez-faire conservatives advocating noninterference with markets to Keynesian interventionists to the neoliberals who wanted to roll back that intervention. But across administrations, economists were useful to politicians when they seemed to have expertise that could help fix the country’s problems.

In the neoliberal era, especially, economists’ stature soared. Their advice for escaping the economic woes of the late 1970s — raise interest rates to cut inflation, then get government out of the way and let markets go to work — appeared, amid an economy that boomed for much of the 1980s and ’90s, to have been proven out. 

Though economists aligned with the two parties disagreed on many things, they shared an analytical toolkit and many core ideas: support for free trade, skepticism of unions, a belief that government intervention in markets often backfires, a concern that social programs distort incentives, a dread of running large deficits, and a fear inflation might return. This was the neoliberal consensus.

We shouldn’t exaggerate how much sway economists had back then — politicians often rejected their advice, and individual economists couldn’t depart too much from their party line if they wanted to keep their seats at the table.

Still, they mattered. The Federal Reserve, chaired by elite economists like Alan Greenspan and Ben Bernanke, became a de facto fourth branch of government, and won glowing media coverage; presidential interference in their workings was deemed unacceptable.

In Congress, modeling from the Congressional Budget Office was deemed hugely important in estimating the economic impact of new bills. “CBO is God around here, because policy lives and dies by CBO’s word,” Sen. Chuck Grassley (R-IA) said in 2006. 

And across many different issues — education, health care, environmental regulation — economists’ wonky analysis and modeling became central to policy debates, inside and outside the executive branch.

The Great Recession is often said to have ended this era, shattering confidence in economists and neoliberalism. But in practice, the Obama administration kept neoliberal wonkery alive and well. Obama thought it was important to hear out those he deemed to be the smartest economists, like Larry Summers. Meanwhile, the Romney-Ryan GOP of 2012 zealously defended free market economics. The true rupture came after that — under Presidents Trump and Biden.

The GOP’s breakup with economists

For the GOP, the reason is simple enough: Trump. He carried out an outsider takeover of the party and the free-market-loving establishment. While Trump is sensitive to market reaction and relies to some extent on the advice of financiers, he is largely uninterested in the counsel of economists, unless, of course, they tell him what he wants to hear.

Trump came to office with his own intuitions and beliefs about how the economy actually works, shaped by his career in business and real estate. His worldview is fundamentally zero-sum. He rejects economists’ idea that more immigration and freer trade can grow the “pie” — the size of the economy — overall. Instead, he obsessively views the world in terms of who is winning or losing: who is getting the biggest slice. Furthermore, his desire to amass personal power clashes with economists’ skepticism, particularly within his own party, of government intervention and belief that markets tend to know best.

For the sake of his trade war, Trump often urges voters to simply make do with less, saying: Your kids don’t really need so many dolls, do they?

Immigration was likely more important than economics in powering Trump’s initial rise among GOP voters. But once he did rise, it became clear those voters didn’t actually care so much about conservative elites’ free market consensus. By maintaining those voters’ loyalty, Trump has dominated the party for a decade, and the old economically conservative institutions have either dwindled in relevance or adapted to better fit his worldview. 

The breakup went both ways, as much of the party’s old economics establishment was — like many other college-educated professionals — repulsed by Trump on personal and policy grounds. “Even though I’m supposed to be associated with the right, I view myself as closer to [Democrat] Jason Furman than Donald Trump,” Mankiw told me.

And while mainstream economists had much to dislike about Trump’s first term, his second term has horrified them even more. 

For one, there’s his tariff agenda. Economists think tariffs are, fundamentally, taxes that make things more expensive and suppress economic activity — and that while there are certain situations where they could be useful, Trump’s broad (and erratic) use of them makes little sense, will hurt growth, and will make many things more expensive for American consumers.

Trump’s attacks on the independence of the Federal Reserve — the citadel of economists’ influence — have also been shocking. Trump is frustrated that Fed chair Jerome Powell won’t lower interest rates. Treasury Secretary Scott Bessent, who comes from the world of finance, has made another complaint: “All these PhDs over there, I don’t know what they do,” he said in July. “This is like universal basic income for academic economists.”

Finally, this administration has purchased stakes in major companies and often pressured businesses in ways that look quite corrupt, raising economists’ fears of “crony capitalism.”

So far, the public has hated the results — Trump’s polling on the economy has been dismal this year, as voters remain irate about high prices. Rather than put forward a pro-growth agenda, though, Trump has insisted that the tariffs will continue until morale improves. For the sake of his trade war, he often urges voters to simply make do with less, saying: Your kids don’t really need so many dolls, do they?

Democrats’ breakup with economists

Democrats didn’t have an outsider populist takeover of the party that chucked out their old elites. Rather, their own party elites fell out of love with economists — because they concluded that the economists’ consensus had failed both substantively and politically, and arguably brought Trump to power in the first place.

According to many leftists and progressives, the failures were obvious. Unfettered free trade had despoiled the heartland. Inequality got out of control as the ultra-rich amassed more of the gains from growth and big corporations exercised more and more power over American life. Millions of Americans faced foreclosures and unemployment, while the crooked bankers who got us in the mess got off scot free. The rot of neoliberalism had been building for years, the Great Recession finally exposed it for all to see — and it was the economists (specifically, a particular clique of well-connected elite economists) who led us there.

Critiques like these gained steam among progressive activists and thinkers in the late Obama years. When the enthusiasm for Bernie Sanders’s campaigns seemed to show there was populist energy behind this critique, Democratic elites tried to accommodate it. Still, we shouldn’t be so quick to conclude that the general public thought the economy of the late 2010s was a hellscape. Indeed, just before the beginning of the pandemic, Gallup’s Economic Confidence index hit a 20-year high, even though most of the problems above persisted.

Economists have been skeptical of the claim that economists screwed up everything. But some — for instance, Berkeley economist Brad DeLong — have argued that Obama’s team did screw up one big thing: the recovery from the Great Recession. Per this argument, policymakers were too worried about the nonexistent problem of inflation and deficits, failed to stimulate the economy sufficiently, and the resulting unsatisfactory recovery left voters unhappy. (But it’s unclear voter anger at Obama spurred Trump’s win; Obama was quite popular in 2016.) 

Other changes may have played a role. The internet and social media were part of a broader decline in gatekeeping that meant economists’ knowledge was no longer exclusive. A smart person online can now obtain data and crunch numbers on their own. Furman told me that, during the Clinton administration, staff economists reviewed new economic research papers and brought some to the communications team; under Obama, it was just as likely that the comms team “would see someone tweeting a paper and come to us about it.” 

With the rise of social media came a leftward shift in how Democrats thought about a host of issues. In the age of virality, analyses offering moral clarity and obvious villains tended to win out. Progressives increasingly tended to scoff at the warnings and concerns of economists, believing they were too disposed to excuse an unjust status quo.

A new counter-establishment that relied far more on elite lawyers and the nonprofit world was formed and became highly influential in the Biden administration. There were, of course, economists among Biden’s appointees, such as Treasury Secretary Janet Yellen — but in practice, she was somewhat marginalized. Policy was often driven by White House advisers and independent agency chiefs, some of whom were bold progressives and some of whom were focused on national security or politics.

Biden himself was uninterested in academic policy debates, particularly on economics. A former Biden administration official told me last year that it was “very, very rare” for Biden to be sent a decision memo asking him to choose between different courses of action; the norm was for advisers to reach consensus and send up a “joint recommendation memo” for his signature.

As Biden was taking office, he had planned on a $1.3 trillion stimulus, but this was increased to almost $2 trillion — reportedly because Senate Democrats’ policy wish list added up that high. Economists like Summers and Furman, now on the outside, warned that that was far too big and risked spiking inflation. But they were ignored, as Democrats sought to avoid what they viewed as Obama’s mistake of doing too little stimulus. 

At this point, mainstream economists were viewed as the boys who cried wolf on inflation, but this time, the wolf was coming. (To be clear, inflation was primarily brought about by global circumstances and not Biden’s stimulus, but his administration was slow to recognize just how serious the problem would be, and made it somewhat worse.)

Other important policies also seemed to be set without much regard to economic thinking or analysis. Democrats’ childcare proposal — at one point, a key part of Biden’s legislative agenda — had deep design problems that only got attention after the commentator Matt Bruenig made some basic economics-informed critiques. On climate policy, Furman said, the Biden team “really ignored the economists who had the modeling capability to tell them how to maximize emissions reduction per dollar spent.” Advocates pushed border policies that paid little heed to the incentives they were giving people to come.

Economists are in the policy wilderness. Will they stay there?

To voters, the purported neoliberal hellscape of the 2010s pales in comparison to the post-neoliberal hellscape of the 2020s. Polls show Americans have positively loathed the state of the economy for the past four years.

But this has not spurred either party to re-embrace economists with open arms. And in part, that’s because economists aren’t really sure about how to solve the US economy’s 2025 problems — or aren’t sure what the problems even are.

Tyler Cowen, an economist at George Mason University, speculated that we might be entering a period of “modest stagflation,” in which inflation and unemployment increase simultaneously. In that situation, he told me, “there is no economic consensus about what to do.” Lowering interest rates could worsen inflation, and raising them could cause a recession. “You’re damned if you do, damned if you don’t.”

Economist Brad DeLong of Berkeley told me that he thought Biden’s economic record was actually rather good in a very difficult situation, since it avoided a prolonged recession or a slow recovery, and inflation was generally countered with wage growth. “The problem is that voters really do not agree,” he said. “The pollsters tell me people would be happier if unemployment had been higher and real incomes had been lower. They’re feeling betrayed by the price level. So we scratch our heads and say, ‘Is money illusion a real source of utility?’”

There is, however, some economist consensus about what not to do about high prices — namely, price controls, which economists typically feel will have counterproductive or undesirable consequences. Many would prefer something more akin to the “abundance agenda,” which is focused on increasing the supply of housing, clean energy, and other things the economy needs, often by trying to reduce procedural or legal roadblocks. 

Abundance has won a dedicated following among center-left wonks and certain politicians, but so far, it has been less potent as an electoral message than price controls and promises for cheaper stuff — promises that may be impossible to fulfill. “People want the price level to go back to what it used to be, which is not possible without a massive recession which would not be desirable,” Furman said.

Economists are useful to political elites when it’s believed they know how to solve major problems of the day. But when it comes to high prices, Mankiw said, “I don’t think there’s any easy solution to these problems. And people do not want to hear, ‘I know you’re not happy, but we have no solutions for you.’” 

This series was supported by a grant from Arnold Ventures. Vox had full discretion over the content of this reporting.