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The Economic Brain Trust

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."

By Dan Froomkin  |  February 6, 2009; 12:49 PM ET
Categories:  Brain Trust , Financial Crisis  
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Comments

"whenever someone proposes a policy that crosses Summers's delicate threshold for Big Government, he derides it as 'Putinesque.'"

Just what we need, people on the good side of the fence who use the same GOP demonization tactics. It wouldn't be enough to say he disagrees and to explain the thought process behind his opinion. This is one more example of the virus that has infected our public discourse. I may rail against the GOP on this board but that's only because they have nothing new to offer and are only interested in obstruction. If they bring a fresh idea I'll gladly consider it. If I don't agree I am capable of explaining why without resorting to calling it, say, "Bin Laden like."

Posted by: BigTunaTim | February 6, 2009 1:26 PM | Report abuse

Paul Volcker has grown increasingly frustrated over delays in setting up the economic advisory group President Barack Obama picked the former Federal Reserve chairman to lead, people familiar with the matter said. Volcker, 81, blames Obama’s National Economic Council Director Lawrence Summers for slowing down the effort to organize the panel of outside advisers, the people said. Summers isn’t regularly inviting Volcker to White House meetings and hasn’t shown interest in collaborating on policy or sharing potential solutions to the economic crisis, they said.
http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aaLzJZKNcc6Y

---

They just want his name to provide legitimacy the stimulus package not any of his ideas.

Maybe you’ll see fit to mention this to your readers next time Froomkin.

Posted by: SharpshootingPugilist | February 6, 2009 2:40 PM | Report abuse

Oh Great!
Jeff Immelt? The guy who runs that awful financial in drag GE? Great! We have a failed CEO on the list of Economic Advisers. And how about that great guy, Bill Donaldson?!?!? The one who was head of the SEC when they decided to undertake that fantastically successful effort at self regulation which allowed the 5 major broker dealers to leverage up 40 to 1 instead of the previous 12 to 1. Way to pour some gas on that fire, Bill!

Geithner and Summers are center right neo liberals?!?!?!? If center right neo liberal means that they are completely and utterly beholden to the banks then, yes, you are correct. They are part of the Bob Rubin Citigroup criminal gang.

We are so screwed and since we don't have any money, these idiots are stealing from our kids.
Unfortunately, sharpshoot is right. They only have Volcker there to provide a patina of respectability to their theft. It's a shame to see this happen to a great central banker.

Posted by: pimpinbenzo73 | February 6, 2009 3:05 PM | Report abuse

Obama said he was going to listen to all sides of an issue that means having advisors from different camps. It does not mean he's going to make them all happy.

Posted by: troyd2009 | February 6, 2009 3:36 PM | Report abuse

I must say Ms. Tyson is a horrible choice IMO. I saw her on a BBC roundtable from Davos and she was a complete apologist for Wall St. and couldn't see the value in investigating for possible fraud OR setting up more strict oversight. THUMBS WAY DOWN!

Posted by: trblmkr1 | February 6, 2009 5:49 PM | Report abuse

Would you hire garbage men to run the banks? Maybe auto workers? No bankers run banks. And there isn't a lot of difference between a leftist banker and a centrist banker and a rightist banker-two of them shop at Mens Wearhouse and the center right guy gets his suits custom made.

Posted by: sparkplug1 | February 6, 2009 8:25 PM | Report abuse

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