Wal-Mart Defender To Direct Obama's Economic Policy

Just days after clinching the Democratic presidential nomination, Senator Obama is naming as his economic policy director an economist who has clashed with critics of Wal-Mart by defending the company as a boon to poor Americans.

The appointment of Jason Furman, 37, a former Clinton administration official who is a visiting scholar at New York University, immediately met with skepticism from some who have faulted Wal-Mart for being stingy toward its workforce.

RELATED: McCain Warns of Broad Tax Hikes Under Obama | Obama-Nomics.

"It's surprising because this guy seems to feel that Wal-Mart's low-wage, low-benefit business model is good for America. That's just flat-out wrong," the executive director of Wal-Mart Watch, David Nassar, said. "This guy helped to lend credibility to the Wal-Mart business model. That was disappointing then and it's disappointing now given this position," said Mr. Nassar, whose group is backed by a board that includes the president of the Service Employees International Union, Andrew Stern. Mr. Nassar quickly added that he was "not critiquing the Obama campaign."

A New York-based labor organizer and writer, Jonathan Tasini, said he was puzzled by the selection of Mr. Furman. "It's legitimate to give you pause," Mr. Tasini, who ran an unsuccessful primary challenge to Senator Clinton in 2006, said. "There have been concerns raised about where Obama's economic policies will trend," the writer said.

Mr. Tasini noted that, while Mr. Obama spurned labor groups by voting for a free-trade agreement with Peru, his past suggests he would be an ally of labor. "It's hard to believe that during his community organizing work in the poorest neighborhoods of his own city he didn't have something sink into him about income inequality. There's no way to read anything he has put out there as anything but rejection for the Wal-Mart model," Mr. Tasini said.

As the company became a pariah in Democratic circles, Mr. Furman stepped out on the issue in 2005 by publishing a 16-page paper titled, "Wal-Mart: A Progressive Success Story." He argued that the huge cost savings the company has delivered to its customers, who tend to have low incomes, far outweighed any impact the chain may have had on wages.

In a debate on Slate.com in 2006, Mr. Furman took on the tactics of the anti-Wal-Mart movement, which include trying to block new stores in places like New York. "If I heard that Wal-Mart was coming to my neighborhood, New York's West Village, I might rush for my mouse. But I wouldn't kid myself into thinking that my opposition had anything to do with helping the poor. If anything, I would feel guilty that I was preventing moderate-income New Yorkers from enjoying the huge benefits that much of the rest of the country already knows so well," he wrote.

"The collateral damage from these efforts to get Wal-Mart to raise its wages and benefits is way too enormous and damaging to working people and the economy more broadly for me to sit by idly and sing 'Kum-Ba-Ya' in the interests of progressive harmony," Mr. Furman added.

A spokesman for Mr. Obama, Joshua Earnest, said the candidate and Mr. Furman have not discussed Wal-Mart.

During the primary campaign, Mr. Obama was sharply critical of the company. He has said he will not shop there and that Wal-Mart should pay "a living wage."

At a January debate, Mr. Obama seemed to play to Wal-Mart's critics when he suggested that Senator Clinton's six-year stint on the company's board paled in comparison to his record as a community organizer in Chicago. "While I was working on those streets watching those folks see their jobs shift overseas, you were a corporate lawyer sitting on the board at Wal-Mart," Mr. Obama said, in one of his sharpest jabs at Mrs. Clinton.

One economist who has disputed some of Mr. Furman's findings on Wal-Mart said the disagreement shouldn't disqualify him. "That's small potatoes. Jason's economic agenda goes way beyond that," Jared Bernstein of the Economic Policy Institute said. "That's not anything close to a deal breaker."

Mr. Furman had been affiliated with the Brookings Institution as director of its Hamilton Project, an economic policy project whose advisory council includes executives of Citigroup, as well as prominent hedge fund executives such as Eric Mindich of Eton Park Capital Management, Richard Perry of Perry Capital, and Thomas Steyer of Farallon Capital,