Keith HennesseyKeith Hennessey is the outgoing chief economic adviser to President Bush and director of the National Economic Council. When Obama takes office, Lawrence Summers will take his place.
“Our assumptions are that the economy will begin to recover early in the next president’s term,” Hennessey recently told CNBC, “but it’s too early to say exactly when.” (I can already hear the cynics among you: he’s just setting up his old boss as the real fixer and the new guy as the lucky inheritor.)
Hennessey held this job for just over a year; for the five years before that he was deputy director of the N.E.C. and spent the previous five years working for Trent Lott. He has also done governmental work in health economics and tax reform; early on, in the private sector, he worked on Symantec’s Q&A database program.
There are an awful lot of economic issues to consider these days — the estate tax and gas tax, the T.A.R.P. drawdown, oil prices – to say nothing of the broader recession and the stock-market miasma.
Feel free to ask Hennessey questions about all these subjects and more. I am guessing you will ask far more questions than he’s able to answer, but whatever the case, we will post his replies here in short order.
Addendum: Hennessey answers your questions here.
and 
. You can also watch it on 
How much of a president’s economic policy is influenced by external factors such as Congress, party pressures, etc.?
I suppose there are subsets to this question: how much of the highly publicized policy and how much quiet, everyday policy are influenced as such?
My question:
“What does America have to do to have a budget surplus next year?”
hopefully that will make my headline prediction come true
In theory, the ‘market’ will correct itself after a sharp downturn in the economy much faster than if the government artifically props it up over a longer term. This artificial stimulation will inturn make a recession or depression last longer than if the ‘market’ were left to its own stimulants.
Question
Does the government take this into consideration? I believe the governments main reason for the artificial stimulation is to avoid mass chaos if the job market collapsed overnight. However, could we expect faster recovery otherwise?
What do you think of dramatically increasing the gas tax (say, maybe $2-3 a gallon), and to offset that increase with a reduction in income tax so that net taxes to the government stay the same. Do you think this is an appropriate way to manage the traffic and environmental issues caused by American drivers?
Why did Treasury not just allow the weak banks to fail and inject capital into the more stable banks to buy those assets?
What are some of the most absurd economic assumptions Washington politicians are guilty of making, and that you’ve had to ‘advise’ against in your position?
On what economic merit does the government justify farm subsidies?
Why does ethanol warrant such heavy government support when all indications are that it is an inefficient fuel substitute? What explanations are given to justify the inflation of other food prices to make an inefficient fuel supplement?
A few questions:
Was there a conscious attempt by the Bush administration to pursue a weaker dollar to shrink the trade deficit?
Why is an economic downturn now viewed as enough of a crisis to increase deficit spending?
As the deficit continues to climb by unsustainable amounts, who will be lending the money to the government to maintain normal operating costs?
And just out of curiosity:
Did Bush express a fondness for any particular economists’ theories?