-- In most countries, economists are behind-the-scenes individuals who serve on advisory panels and write reports read primarily by other economists. But as leaders of the European Union meet this week to try to resolve Europe's debt crisis, economists will play a major role in the success or failure of efforts to prevent the region from lapsing into a deep recession.
Italy will be represented by Prime Minister Mario Monti, an economist and former EU official who replaced the erratic and flamboyant Silvio Berlusconi last month. On Monday, Monti announced a $41 billion package of new taxes and spending cuts that's designed to reduce the nation's debt, the second-largest in the European Union.
Greece will be represented by Lucas Papademos, a former vice president of the European Central Bank, appointed interim prime minister last month. He's negotiating a debt swap agreement with private lenders in hopes of preventing that country's debt from ballooning to twice the size of its economy. Wednesday, Greek lawmakers approved an austerity budget extending deep spending cuts into next year.
Given the financial challenges facing Europe, as well as the U.S., it's not surprising that hard-nosed number-crunchers are attaining more power and prestige. Other examples of economists called to lead during fiscal crises include Alassane Ouattara of Cote d'Ivoire, Manmohan Singh of India and Ernesto Zedillo of Mexico, says Anthony Elson, an economist at Duke University's Sanford School of Public Policy and a former senior staff member for the International Monetary Fund.
While no full-time economist has been elected president of the U.S., several modern presidents have had a background in economics. Ronald Reagan graduated with a bachelor's degree in economics and sociology. George H.W. Bush and Gerald Ford also earned undergraduate degrees in economics.
Only 8.4% of lawmakers serving in Congress majored in an economics-related field in college, according to a July survey by the Employment Policies Institute, a conservative non-profit. An additional 14% majored in business or accounting, the survey found.
The art of the deal
To succeed as political leaders, economists must be able to negotiate with other lawmakers, Elson says. Compromise may not come easily to individuals who are trained to seek the optimal solution for every problem, he says.
They must also learn how to explain their policies in ways the public can understand, says Michele Boldrin, chair of the economics department at Washington University in St. Louis.
That's particularly difficult for research economists, because their deep immersion in economic issues makes it difficult for them to simplify things, Boldrin says. "You ask a simple question, they go on for 25 minutes."
While Monti has a background in economics, he's not a researcher, and he's familiar with the world of politics, says Boldrin, who was born in Italy. Boldrin likens him to Larry Summers, the outspoken economist who served in the Clinton and Obama administrations. "This is like having Larry Summers as a prime minister, without Larry Summers' personality," he says.
Papademos is also familiar with machinations of European politics. He was vice president of the European Central Bank from 2002 to 2010 and governor of the Bank of Greece, Greece's version of the Federal Reserve, from 1994 to 2002.
The technocrats have plenty of detractors. Alexander Somek, a University of Iowa law professor and native of Austria, says the ascension of Monti and Papademos reflects a larger trend in the EU that disregards the will of the voters. Austerity measures aimed at satisfying credit-rating agencies could lead to deep cuts in social programs that enjoy broad support, Somek says. This week, Standard & Poor's threatened to downgrade 15 eurozone countries, citing the rising risk of a recession and high levels of government and household debt.
Such measures could cause Europeans to become alienated from their democratic governments, Somek adds, which could lead to a rise in the nationalism and authoritarianism that rocked Europe before World War II.
Michael Szenberg, professor of economics at Pace University's Lubin School of Business, argues that Monti and Papademos could be just what Europe needs. Both are unlikely to run for office when their terms expire, which makes them convenient scapegoats for the backlash against cuts in public programs, Szenberg says. "We all have to tighten our belts," he says. "You blame them — the technocrats."