The Economic Brain Trust

By Dan Froomkin
12:49 PM ET, 02/ 6/2009

Neil Irwin and Michael D. Shear write for The Washington Post: "The Obama administration today announced a team of outside economic advisers, chaired by former Federal Reserve chairman Paul A. Volcker, to help sculpt a response to the deepening recession....

"Those voices include corporate leaders such as General Electric chief executive Jeffrey Immelt and James W. Owens, head of Caterpillar, the heavy equipment manufacturer that recently announced it would lay off 20,000 workers worldwide in response to the economic downturn. Richard L. Trumka, secretary-treasury of the AFL-CIO, is also on the board, as is Anna Burger, secretary-treasurer of the Service Employees International Union.

"Former government officials are also on the panel, including former SEC chairman William H. Donaldson, Clinton administration economic adviser Laura D'Andrea Tyson, who is the dean of the Haas School of Business at the University of California at Berkeley, and Martin Feldstein, who was President Ronald Reagan's chief economic adviser and is an economics professor at Harvard University....

"The president already has many strong voices advising him on economic issues, including Volcker; Treasury Secretary Timothy F. Geithner; Lawrence H. Summers, director of the National Economic Council; Christina Romer, chairman-designate of the Council on Economic Advisers; as well as other staff members who were at his side during the campaign."

Robert Schmidt and Julianna Goldman reported for Bloomberg yesterday that Volcker was growing increasingly frustrated over delays in setting up the group, and blamed Summers for slowing down the effort to organize the panel.

Christopher Hayes writes for the Nation: "The main players in Barack Obama's economic team can be cleaved roughly into two groups: (1) center-right neoliberals like Larry Summers, head of the National Economic Council; his deputy, Diana Farrell; and Treasury Secretary Tim Geithner; and (2) progressive labor-liberals like Melody Barnes, director of the Domestic Policy Council; Biden's chief economic adviser, Jared Bernstein; and labor secretary nominee Hilda Solis."

He notes that "wage stagnation, rising inequality and this financial crisis have pushed the neoliberals in a more progressive direction. It's hard to imagine the Larry Summers of 1993 saying that income inequality is the 'defining issue of our time,' as he recently did, or, for that matter, advocating a stimulus package that may run as high as $900 billion."

But, Hayes writes: "The problem is that Summers and Geithner seem to have retained their dispositional trust in the market and skepticism of public sector involvement. So instead of nationalizing banks, as many economists urge, they're reportedly busy crafting a plan for TARP II similar to former Treasury Secretary Henry Paulson's ill-fated attempt to purchase bad assets from the banks. According to The New Republic's Noam Scheiber, whenever someone proposes a policy that crosses Summers's delicate threshold for Big Government, he derides it as 'Putinesque.' Unfortunately, reviving the financial sector may require measures that would make even Putin blush."

Robert Scheer writes in his syndicated column that "Goldman Sachs runs the Treasury Department - no matter which party is in power." And David Sirota writes in his syndicated column that the White House's economic team is "a squad of corporate lackeys disguised as public servants."

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