Election 2008

Rubinomics, Obama economic team, Obama economic advisers
Pablo Martinez Monsivais/AP
President-elect Barack Obama introduces his economic team during a news conference,
Monday, Nov. 24, 2008, in Chicago. From left: Treasury Secretary-designate Timothy
Geithner, Council of Economic Advisers Chair-designate Christina Romer and Obama.

Can Obama’s Old-School Economic Team Handle New Challenges?

November 24, 2008 03:05 PM
by Josh Katz
Barack Obama officially named members of his economic staff Monday. The team, known for its belief in “Rubinomics,” has a daunting task ahead.

Obama Announces His Economic Selections

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In a news conference this afternoon, President-elect Barack Obama announced the selection of some of his top economic advisers, and there were few surprises. Federal Reserve Bank of New York chief Timothy Geithner, 47, will become the next Treasury secretary. Obama also selected Larry Summers, the former U.S. Treasury secretary and Harvard president, to head up the National Economic Council. University of California-Berkeley economics professor Christina Romer has been tapped as director of the Council of Economic Advisers.

Obama did not go into detail about his economic stimulus plan, simply stating that, “It is going to be of a size and scope that is necessary to get this economy back on track,” The Wall Street Journal reports. But on Saturday, Obama unveiled a plan to create 2.5 million new jobs, halt foreclosures, and aid the auto industry.

“We’ll need to bring together the best minds in America to guide us and that is what I’ve sought to do in assembling my economic team. I’ve sought leaders who could offer sound judgment and fresh thinking,” Obama said Monday, according to Agence France-Presse.

Austan Goolsbee, a top adviser to Obama, echoed that statement by saying that Obama was creating “the most experienced, expert team on crisis management that probably has ever existed in an economic field in the White House.”

Geithner is currently right in the thick of the Wall Street dilemma as the president of the New York Federal Reserve. In that capacity he has attempted to bring financial firms under the tighter regulation, which Obama hopes to do during his term.

Obama’s head strategist, David Axelrod, commented on Geithner: “He’s intimately involved with the situation now in his role as president of New York Fed. By temperament and experience, he’s the right man to lead the Treasury now.”

Related Topic: The team, Rubinomics and its critics

The common thread of Rubinomics runs through all of Obama’s top picks for economic advisers. Geithner, Summers and presumed budget director Peter R. Orszag are students of President Bill Clinton’s treasury secretary, Robert E. Rubin. In that post Rubin called for “balanced budgets, free trade and financial deregulation, a combination that was credited with fueling the prosperity of the 1990s,” according to The New York Times.
Balancing the budget will not be on the agenda—at least for the first two years. The economic stimulus package will focus on public works projects and funnel money into states, costing the government billions of dollars in the hopes of fixing the nation’s economic tribulations. According to the Times, Summers “has been especially public in calling for a big stimulus package.”

Although many Democrats have praised Rubin for economic success in the 1990s, some are critical of Obama’s new team. “What worries me is there is not one person in the senior group who is the outsider to this club,” said Robert Kuttner, of the liberal Economic Policy Institute.

In addition, some Democrats favor more “domestic spending and more protectionist trade policies” than Rubin protégés are expected to deliver. Summers has also received his fair share of censure, notably from women’s groups angered by his stint as president of Harvard University, where he made comments believed by some to question women’s level of intelligence.

Background: Recent cabinet picks reveal Washington experience

Although none have been formally announced, sources say that many of Obama’s Cabinet posts are already decided. This week, news surfaced that Tom Daschle will be secretary of health and human services, Janet Napolitano will be secretary of homeland security, Eric Holder will serve as attorney general, and Peter Orszag will be the next director of the Office of Management and Budget. Rahm Emanuel will be Obama’s chief of staff, according to accounts.

Obama has tapped a number of former Clinton staffers for his Cabinet, and choosing Hillary Clinton as secretary of state would further that trend. Some have criticized such a selection of veteran Washington insiders, saying it clashes with Obama’s message of “change,” but others praise Obama for choosing an experienced and knowledgeable cast of advisers.
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