Why Is Mark Zandi Washington’s Favorite Economist?
Barry Ritholtz posts an anonymous critique of Mark Zandi, one of the most frequently cited economists in Washington. The nameless investment banking analyst writes:
The Fed, Treasury and the Senate Budget Committee appear to have a favorite private sector economist, one who has managed to become a favorite even though he works for a unit of the same rating agency whose analysis is intrinsically tied to both the market, banking and housing crisis.
Mark Zandi of Moody’s Economy.com is routinely trotted out as an independent expert. He was the sole economist at the August 17 Treasury Conference on the Future of Housing Finance, the Fed’s REO and Vacant Properties conference and has now testified at the September 22nd Senate Budget Committee hearing on “Assessing the Federal Policy Response to the Economic Crisis.”
Never mind that, based on Zandi’s record, either his analysis is just wrong or his independence is compromised. Everyone seems to like to hear the guy who is saying what people want to hear, even the press appears to prefer “feel good” analysis to considering the accuracy of his record.
I like Mark Zandi quite a bit. He is collegial, considerate, considered and smart. But his optimism is helping Washington avoid addressing the reality of our economic problems and the structural issues that must be addressed before our economy can sustain renewed growth.
So why *is *Zandi the Beltway’s Mr. Congeniality? That question is easy to answer, I think.
Zandi advised Sen. John McCain (R-Ariz.) in his presidential run and is widely respected in the business community. He isn’t seen as a liberal, or a partisan. But, for months now, he has argued for more stimulus, hailed TARP and generally sided with Democrats on major economic questions. Ergo, Democrats get to cite a Republican when arguing for their policies, knowing said Republican adviser will publicly back them up. If Doug Holtz-Eakin did, Democrats would happily cite him too.
None of this is to question Zandi’s work or to say anything about his politics, of course. It is just to note he is so frequently cited because it is so uniquely expedient for Democrats to cite him.