Congressional skeptics turned to outside economists but found no ready alternative plan

Evidence

One informant suggests that in the first hours of confusion, a couple of economists with close congressional connections were called in to canvass possible grounds for opposition to the plan: for instance, Jamie Galbraith was summoned by some Democrats led by Congressman Brad Sherman; the Skeptics’ Caucus on the Republican side conscripted Bill Isaacs, former Reagan head of the FDIC. Issacs suggested that no expenditure was necessary, and that the crisis could be averted merely by changing a few rules. Staffers started making cold calls to economists down the list on Sunday, September 28, and another conscript was David Levy of George Mason University and the Mercatus Institute. Levy was not an expert on finance, so could not provide an alternate plan, but did talk to some staffers about the role of the ratings agencies. But Mercatus and George Mason were destined to play a more significant role in the weeks to come. — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 636

Categorization

• XREF: The Mercatus/George Mason connection previews Mirowski’s thread on the thought collective’s institutional home — connects forward to his account of Regnier and the market-design economists.
• QUESTION: Why did the opposition camps lack a coherent alternative? Worth tracing how the failure of dissenting economists to mobilize an alternative plan in Sept 2008 shaped the later austerity consensus.
• SEED: Angle: the ‘missing alternative’ as a structural feature of the thought collective — opposition existed but had no coherent expert articulation, so the Paulson frame won by default.