Can Obama's New Chief Economist, Alan Krueger, Create More Jobs?
There's no doubt that Alan Krueger, President Obama's newly named top economist, has his work cut out for him. From an economy that's seemingly stuck in a rut to a housing market immersed in doldrums, the nation's economic problems are many.
Not the least of those, of course, is the stubbornly high unemployment rate, which has been hovering around 9 to 10 percent for the last year.
But with Washington lawmakers maniacally focused on not spending one more dime on stimulus programs that might actually help to put Americans back to work, Krueger's options may be limited.
Krueger comes to the job of chairman of Council of Economic Advisers with some unique skills, as The New York Times notes. He is a microeconomist -- essentially someone who focuses on the components of the economy rather than the whole -- who specializes in labor issues.
The Princeton University economist also has served in government before, working at the Treasury Department in 2009 and 2010 on tax policy and public debt, among other things.
As a labor economist, Krueger's expertise is similar to that of Robert Reich, former labor secretary under President Bill Clinton, says Christy Caridi, director of the Bureau of Economic Research at Marist College in Poughkeepsie, N.Y.
Unlike his predecessor Austin Goolsbee, "[Krueger] has a true understanding of labor markets as they exist -- not based on theory, but based on reality," Caridi tells AOL Jobs.
Krueger's expertise is in the areas of income inequality and labor relations, and he is better versed in labor issues than his predecessors, she says. That includes an understanding of what's required to bring about full employment, generally viewed as an overall jobless rate of around 5 percent.
Further, she says, Krueger's expertise will allow him to pinpoint obstructions in the labor force and "to offer suggestions for clearing up the bottlenecks."
He isn't without his critics, however. Despite his reputation as a leading labor economist, Krueger, writing in a piece for Bloomberg, predicted in March that unemployment would continue to fall, as it had sharply in the previous few months.
But, as CNBC.com notes, Krueger got it wrong "from almost the moment the column was published." After falling to 8.8 percent in March, the rate continued to tick up to 9.2 percent in June. (The government will release fresh employment data Friday, including August's jobless rate. According to consensus estimates compiled by Bloomberg, the U.S. unemployment rate is expected to remain at 9.1 percent.)
Still, Krueger is known for being a stickler for the integrity of his data and his leadership at the Princeton Data Improvement Initiative, making him a fan of some on Wall Street, including analyst Daryl Jones.
Writing in Fortune, Jones notes that Krueger is knowledgeable and a predictable choice for the Obama White House, but his negatives outweigh his positives. "[Krueger] is probably more than qualified based on his resume, but the question is whether is the right man for the job at this time," Jones says.
Comments Krueger made about "ineffective" efforts by the Bush administration to privatize unemployment services essentially argued that "government is more effective than the private sector at managing a wide range of activities," Jones says.
Whether fan or foe, many Americans' eyes will be focused on Obama's latest choice to help lead the nation out of its economic morass. Many more also hope Krueger will be able to do what no one else has yet been able to do -- help create millions of jobs.
Krueger's job -- as well as Obama's -- may depend upon it.
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