A brief guide to Kevin Hassett, Trump's new chief economist

President Trump has officially named the American Enterprise Institute’s Kevin Hassett as the chair of his Council of Economic Advisers. The CEA chair serves as the White House’s chief economist.

And unlike Peter Navarro, Hassett is a fairly mainstream free market conservative. He was a senior adviser on Mitt Romney’s 2012 campaign and has been a mainstay in Republican economic policy circles for two decades now. Tellingly, a number of liberal economists, including Obama CEA chairs Jason Furman and Austan Goolsbee, cheered his appointment when it was first rumored— not because they agree with him, but because he’s a fundamentally serious thinker who could bring some rigor to the Trump White House:

Perhaps Hassett’s most surprising stance, if you know him only for his work with Romney and advocacy of lower taxes and entitlement reform, is his sympathy for government efforts to directly hire people. "Look at the stimulus and the number of jobs we've actually created, and it comes out to a couple million bucks per job created," Hassett told the Atlantic's Derek Thompson in 2010. "My idea is simpler. Find the unemployed and hire them."

But Hassett’s openness to government employment coincides nicely with the Trump administration’s stated interest in spending big on infrastructure projects and its aggressive focus on job creation. You could imagine Hassett moving Trump’s agenda in a direction that emphasized putting the long-term unemployed, or labor force dropouts, to work again.

Hassett has been particularly vocal in promoting the benefits of trade to low-income developing countries. "The benefits for developing countries are even great — on a proportional basis — than for the United States," Hassett and Glassman continued. "If trade stops or even slows down, developing countries would be devastated."

Like any self-respecting conservative economist, Hassett is passionate about cutting the corporate income tax. But his arguments on this score are slightly different from the typical concerns that the US’s rate is too high relative to other countries, or that it’s out of step with international practice by trying to tax profits made overseas, or even just that corporate taxes discourage investment.

There’s an active dispute among economists about who actually pays the corporate tax. Money that corporations earn goes, roughly speaking, to two groups of people: the people who own the company (capital) and the people who work for the company (labor). So the tax can be paid either by taking money from capital owners, or by reducing wages. This has huge implications for how progressive the tax is. The more it’s paid by capital, the more progressive it is and the less harmful it is to the middle class; the more it’s paid by labor, the worse a deal it is for workers.