Kerry Credits Chicago Economist Goolsbee to Debunk Privatization Plan

Kerry Credits Chicago Economist Goolsbee to Debunk Privatization Plan

Original Article on Chicago Tribune

In his nine years at the University of Chicago Graduate School of Business, Austan Goolsbee has become an academic celebrity.

His economics classes are some of the most sought after on campus, and he was named in 2002 as one of 100 “global leaders for tomorrow” by the World Economic Forum. He has contributed opinion pieces to Forbes, The New York Times and Slate.

On Wednesday, Goolsbee’s profile expanded far beyond the world of academics.

In criticizing President Bush’s call for partial privatization of Social Security, Sen. John Kerry cited a Goolsbee study concluding that financial companies would reap some $940 billion in fees through the creation of private accounts, money the Democratic candidate said would be better spent to finance retirements.

Kerry’s reference sparked a flurry of press inquiries and dozens of e-mails from economists eager to get a copy of the study, Goolsbee said in an interview. The 35-year-old professor said he is at best an “informal adviser” to the Kerry campaign who has never met the candidate nor received payment for his counsel.

“It’s been an interesting day,” Goolsbee said. “Most of what I do is research stuff about taxes and business regulation, so this study was more tied to a broader public debate.”

Goolsbee came to Chicago at age 26 after earning a PhD in economics from the Massachusetts Institute of Technology. Made a full-time professor in 2000, Goolsbee’s star quality is due in part to taking positions counter to the university’s conservative reputation, embodied in the Chicago School of free-market economics.

Goolsbee says his work resists easy characterization. Dismissing the label of “liberal,” Goolsbee said he favors smaller government and lower taxes. Nonetheless, he has attracted Democrats’ attention for his critique of supply-side economics, as stated by economist George Gilder: “To help the poor and middle classes, one must cut the taxes of the rich.”

“That hypothesis–that increased taxes on the wealthy don’t generate revenue–is false,” Goolsbee said in 1998.

More recently, Goolsbee published a paper that questioned the fees charged by financial managers administering college savings programs.

“That didn’t make me very popular with the financial community,” he said.