I knew Steve Hanke, professor of applied economics at Johns Hopkins, was on staff at (Republican) President Reagan's Council of Economic Advisors in the early 1980s. What I didn't know is that he was part of a similar CEA under (Democrat) Gov. Marvin Mandel in the 1970s. It was "an analytical shop," Hanke recalls, designed to analyze policy and forecast revenue through an economic filter.
"There's no question about it; it was a tremendous help to have it," Mandel, who'll turn 91 next month, said in an interview.
Mandel, co-chairman of Maryland Business for Responsive Government, thinks Gov. Martin O'Malley should revive the council to save the state from economic miscues. A good example, Hanke says and I agree, is O'Malley's multibillion-dollar proposal to build electricity-powering windmills of Maryland's coast. An even cursory analysis from within the governor's office might have kept the project from being proposed and might have identified more affordable alternatives.
On the other hand, I believe chief executives in all types of organizations usually do what they they think will sell to key constituencies and then cobble up the "analysis" ex post facto. Nevertheless, says Hanke: "While a governor's CEA couldn't stop all the nutty proposals, it stopped quite a few of them. This was the same experience I had on Reagan's CEA."
