Obama Taps Goolsbee Chair of Economic Advisers

Yesterday, President Obama named Austan Goolsbee as his new Chairperson of the Council of Economic Advisers. Goolsbee succeeds Christina Romer who resigned earlier this month.

You might remember that in the run up to the Ohio Democratic Primary in 2008, Barack Obama was railing against the North American Free Trade Agreement (NAFTA) and had threatened to renegotiate it. For instance, during a February 2008 speech to workers at the National Gypsum plant in Lorain, Ohio, Obama said, "I don't think NAFTA has been good for America - and I never have." (It's worth noting that Obama's speech didn't much good for the National Gypsum employees in Lorain. Less than two months later, the company announced it was laying off all employees at the plant.)

While Obama's anti-NAFTA rhetoric might have appealed to Ohio voters it no doubt created anxiety amongst our NAFTA partners namely Canada and Mexico. Enter Austan Goolsbee. During a meeting with officials at the Canadian Consul General's office in Chicago, Goolsbee said that Obama's commentary on NAFTA was mere campaign rhetoric and that it should be taken with a grain of salt. The Obama campaign, however, denied such a conversation took place (as did the Canadian government.) The Obama campaign continued to deny a conversation took place even when the Consul General's Office produced a memo of that conversation.

Byron York, then a correspondent with National Review Online, wrote:

So it’s not likely that the story will go away, given the Obama campaign’s inaccurate and misleading statements about it and the Clinton campaign’s interest in keeping the controversy alive. The only question is whether it will do Obama any significant damage and Clinton any significant benefit.

Well, the episode did enough damage that Hillary Clinton won the Ohio Democratic Primary on March 4, 2008. But by then it was a day late and a dollar short. A Canadian dollar short. The Goolsbee affair did no long term damage to Barack Obama.

Goolsbee committed a gaffe. He told the truth. There was no way President Obama was going to jettison NAFTA much less entertain ideas of negotiating it. It took years for the U.S. government and the Canadian government to negotiate the Free Trade Agreement (NAFTA's predecessor.) Any renegotiation would have taken years. Any initiative to abrogate the agreement would have caused a significant diplomatic row. Throw Mexico into the mix and matters get that much more complicated. Obama was doing what politicians have done before him and will continue to do - tell people what they want to hear. The only unfortunate byproduct of that was some Ohioans believed him.

But if nothing else, the memo from the Canadian Consul General's Office in Chicago was right about one thing. It stated, "Should Obama win the White House, Goolsbee figures to remain a close advisor." Not only has Goolsbee remained a close advisor he will now chair a group of them.