Lawrence Lindsey
Lawrence B. Lindsey | |
|---|---|
| Born | July 18, 1954 Peekskill, New York, U.S. |
| Occupation(s) | Economist, writer |
| Known for | Director of the National Economic Council (2001–2002); Member of the Federal Reserve Board of Governors (1991–1997) |
Lawrence B. Lindsey (born July 18, 1954) is a prominent American economist and writer. He held the position of director at the National Economic Council from 2001 to 2002 and acted as President George W. Bush's assistant for economic policy matters. Earlier in his career, he was appointed by President George H. W. Bush to serve on the Federal Reserve Board of Governors between 1991 and 1997. Lindsey significantly contributed to the formulation of President Bush's $1.35 trillion tax cut initiative, recommending the establishment of an economic "insurance policy" to guard against potential downturns. His departure from the White House in December 2002 followed disagreements regarding the estimated expenses of the Iraq War, where he projected costs could escalate to $200 billion, contrasting sharply with Defense Secretary Donald Rumsfeld's figure below $50 billion. Subsequent estimates by the Congressional Budget Office placed the war's total expenditure near $2.4 trillion.
Biography and achievements
A native of Peekskill, New York, Lindsey completed his secondary education at Lakeland Senior High School in 1972. He graduated magna cum laude with an A.B. degree from Bowdoin College, where he was inducted into Phi Beta Kappa. He then pursued graduate studies at Harvard University, earning both an A.M. and a Ph.D. in economics.
During the administration of President Ronald Reagan, Lindsey served three years on the Council of Economic Advisers as a senior staff economist specializing in tax policy. Subsequently, under President George H. W. Bush, he was appointed special assistant to the president for policy development.
From November 1991 until February 1997, Lindsey was a member of the Federal Reserve Board and simultaneously chaired the board of the Neighborhood Reinvestment Corporation, an organization focused on community redevelopment through public-private partnerships, until his departure from the Fed.
Between 1997 and 2001, he held the Arthur F. Burns Chair in Economics as a resident scholar at the American Enterprise Institute and acted as managing director for Economic Strategies, an economic consultancy based in New York City. Additionally, he served as chief economic advisor during Governor George W. Bush’s presidential campaign from 1999 to 2000 and has experience as an associate professor of economics at Harvard.
Currently, Lindsey is chief executive officer of the Lindsey Group, which he co-leads alongside a former colleague from the National Economic Council. He regularly contributes articles to The Wall Street Journal and various other business-focused publications and has also been a visiting scholar at the American Enterprise Institute.
Writings
Lindsey has authored four nonfiction works addressing economics and political themes. In 2021, he expanded into fiction with his debut novel, Currency War, which delves into an economic confrontation between China and the United States.
His professional writings have appeared widely across scholarly outlets. Among his accolades are the Distinguished Public Service Award from the Boston Bar Association (1994), an honorary doctorate from Bowdoin College (1993), recognition as a Citicorp/Wriston Fellow for Economic Research (1988), and receipt of the Outstanding Doctoral Dissertation Award from the National Tax Association (1985).
Nonfiction
- The Growth Experiment: How the New Tax Policy is Transforming the U.S. Economy (Basic Books, 1990)
- Economic Puppetmasters: Lessons from the Halls of Power (AEI Press, 1999)
- What A President Should Know ...but most learn too late: An Insiders View On How To Succeed In The Oval Office (Rowman & Littlefield Publishers, 2008)
- Conspiracies of the Ruling Class: How to Break Their Grip Forever (Simon & Schuster, 2016)
Fiction
- Currency War (Forefront Books, 2021)
Views
Lindsey became notable for forecasting the U.S. stock market bubble of the late 1990s while serving as a Federal Reserve Governor in 1996. He questioned the optimistic forecasts for corporate earnings growth, predicting that profits would underperform expectations—a forecast later confirmed by the decline in corporate profit shares between 1997 and 2001. Although stock valuations reached their peak in March 2000 and the S&P 500 remained above its 1996 level, his warnings underscored potential overvaluation risks within the market.
Contrary to Chairman Greenspan’s approach, Lindsey maintained that the Federal Reserve should intervene to prevent asset bubbles from inflating further, referencing historical precedents such as the U.S. market in the 1920s and Japan’s economy in the 1980s. He argued that early action would reduce the severity of long-term economic consequences. This viewpoint attracted political scrutiny during the 2000 Presidential race when Governor Bush was criticized for appointing Lindsey—who had liquidated all his stock holdings in 1998—as an economic advisor.
As reported by The Washington Post, Lindsey was part of an advisory panel at Enron alongside Paul Krugman prior to his White House tenure. Lindsey and his team cautioned Enron regarding underestimated economic risks present in their operating environment.
Cost of the Iraq War
On September 15, 2002, Lindsey projected that the maximum cost of the Bush administration’s plan for invading Iraq and regime change would be between 1 and 2 percent of GNP, roughly $100 to $200 billion. This estimate was dismissed by Mitch Daniels, then Director of the Office of Management and Budget, as "very, very high." Defense Secretary Donald Rumsfeld forecasted expenses below $50 billion and optimistically expected Iraq’s oil revenues to cover much of the cost, labeling Lindsey’s figures as "baloney."
By 2007, expenditures had surpassed $400 billion, with projections from the Congressional Budget Office indicating that appropriations might exceed $1 trillion. In October 2007, the CBO estimated that combined costs for the Iraq and Afghanistan conflicts could reach $2.4 trillion by 2017. In response, Democratic Representative Allen Boyd criticized the administration’s dismissal of Lindsey, noting that he had been reassigned away from a central role within the administration.
Presidential campaign leadership
Lindsey has held senior advisory roles in multiple Republican campaigns. He headed the economic advisory team for Governor George W. Bush’s victorious 2000 presidential bid, earning significant confidence from Bush, who remarked, "I am very fond of Larry Lindsey and I value his advice." During the 2008 election cycle, Lindsey acted as Senior Economic Advisor to Fred Thompson. On election day in 2012, he predicted Republican Mitt Romney would win against President Obama. In April 2016, Lindsey publicly supported Ted Cruz over Donald Trump in the Republican primary, praising Cruz’s economic platform as deserving a "top grade."