Obama Sticks to the Establishment for His Economic Team

Consolation for fiscal conservatives: it could have been much worse.

November 25, 2008 - by Jennifer Rubin
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After a three week skid of the stock market following his election, President-elect Barack Obama rolled out his economic team. As expected, New York Federal Reserve President Tim Geithner was named as Treasury secretary and former Clinton Treasury chief Lawrence Summers was named to head the President’s National Economic Council. Melody Barnes was named to the Domestic Policy Council spot and Christina Romer was appointed to head the Council of Economic Advisors. (New Mexico Governor and former U.N. Ambassador and Energy Secretary Bill Richardson is rumored to be up for commerce secretary and will be officially named later.)

Geithner has been front and center in the current economic crisis, advocating greater government involvement but also weighing in against a plan to rescue Lehman Brothers, whose demise many credit for a severe worsening of the financial collapse. He will insure a smooth transition from the current administration in oversight of the widely-flung government rescue efforts. However, he does not offer any significant background in trade or tax policy.

Summers is equally well-schooled in crisis management, having worked to overcome concerns of his former boss, Treasury Secretary Robert Rubin, and devise a rescue plan for the Asian financial crisis in the 1990s. He has consistently advocated big, bold, and expensive government stimulus efforts.

His selection won’t be universally hailed. Women’s groups were infuriated when, as president of Harvard, he posited that gender differences might play a part in the number of women in the science professions. (He was later forced out of his post but remains the the Charles W. Eliot University Professor.) Liberals are not pleased with some aspects of his economic track record either. CNN reported:

Summers’ critics contend he played a role in the current financial crisis. They cite, among other things, his support for the Commodity Futures Modernization Act, which allowed many derivatives – like the credit default swaps that have rocked markets this fall — to go unregulated.

Nevertheless, whatever baggage he brings won’t weigh him down significantly. His position is not subject to Senate confirmation — which explains perhaps why he was placed in this role rather than Treasury.

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Jennifer Rubin is PJM's Washington, DC, editor. She also blogs at Commentary’s Contentions.

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19 Comments

1. David Thomson:

“Whether that is a successful strategy for digging out of the economic slump remains to be seen.”

The historical evidence is not even slightly encouraging. Franklin D. Roosevelt only made things far worse with his meddling. We can expect the same results with Barack Obama’s economic interventions. The best option is essentially to leave the economy alone. Alas, ego tripping “elites” prefer to tell people what to do—while increasing their own power and sense of entitlement. Libertarian economic doctrines marginalize the political class and its allies. This is the number one reason they are ignored.

Nov 25, 2008 - 12:46 am 2. syn:

“These selections will be hailed as “centrist” and “experienced.” What is certain is that they will show no hesitation in using the full force of the federal government to intervene, regulate, and direct the economy.”

Centrist policies are the way Leftist Progressive plutocrats hide their intentions.

We are bailing out these plutocrats so they can have enough money to stay in power forever.

As for keeping Bush’s Tax Cuts, for cosmetic purposes those will stay. The stealth tax increase will be in property tax, fed gas tax, food tax, wrong type of car tax, and whatever else evil tax the Left Progressive plutocrats can invent.

One thing Left Progressive plutocrats won’t do is spread around their personal wealth; no way in hell will Leftist Progressive plutocrat Oprah Winfrey will spread her $2.7 billion with anyone.

All the while Dumb Females(I can say this I’m female) will suck up Oprah’s crap to maintain well-being as they suffer under severe economic misery; it’s called the Vicious Cycle for Stupid People.

Nov 25, 2008 - 4:10 am 3. Sheepish:

The President-elect continued to harp on his campaign pledge of a tax cut for 95% of Americans and to urge that the rich could pay more, while leaving open the possibility that the Bush tax cuts might simply expire on their own in 2010. (The market dove as he spoke on this topic.)

Oh Dear Me!

Lets be sure and do everything the ‘Stock Market’ would have us to do.
We cant have the market upset or diving.

Throw all the money at anything or everything that pleases the Great Anointed Markets.

Why don’t we just get a computer and let it tell us how to run our lives and our government and what not to say or do around the markets?

Instead of ‘Stock Market’ why don’t we rename it ‘The Great God Market of the Universe.’

SHEEEEEEESH!

Nov 25, 2008 - 4:47 am 4. mk:

Sheepish,
What in God’s Name are you talking about?

The market’s in the crapper and it will continue to be there no matter how much cash is tossed at it.

Is that what you meant? Clarity in posting is your friend.

Nov 25, 2008 - 5:28 am 5. anton:

Sheepish, the markets (and by that I mean the world-wide markets) are de-capitalizing. Anybody with cash is standing pat on the sidelines, why would you invest in US markets when the president elect has promised to tax the pants off the profits?

Without money liquidity dries up and the market stutters, this scares the faint-hearted and they ring up their broker screaming “sell, sell, get me out” this drives down prices further and more money leaves the market. The folks with cash to invest find it hard to justify putting cash into a falling market and so it goes. Businesses fold, people get laid off.

So, yes we should pay attention to what the market is doing, especially when we have a president-elect that seems to think you can cut taxes on 95% of the population when only 65% PAY taxes in the first place. He plans to increase the taxes on those at the top bracket (is that the top 5%, or those in the top 125%, his math is fuzzy) to make up the shortfall. His tax policy promises to penalize investment and success, therefore successful investors go elsewhere; which brings us back to that point about falling markets and dissappearing jobs.

Nov 25, 2008 - 6:35 am 6. Gloom and Doom:

A leading Russian political analyst has said the economic turmoil in the United States has confirmed his long-held view that the country is heading for collapse, and will divide into separate parts.”The dollar is not secured by anything. The country’s foreign debt has grown like an avalanche. By 1998, when I first made my prediction, it had exceeded $2 trillion. Now it is more than 11 trillion. This is a pyramid that can only collapse.” Asked why he expected the U.S. to break up into separate parts, he said: “A whole range of reasons. Firstly, the financial problems in the U.S. will get worse. Millions of citizens there have lost their savings. Prices and unemployment are on the rise. General Motors and Ford are on the verge of collapse, and this means that whole cities will be left without work. Governors are already insistently demanding money from the federal center. Dissatisfaction is growing, and at the moment it is only being held back by the elections and the hope that Obama can work miracles. But by spring, it will be clear that there are no miracles.”
He predicted that the U.S. will break up into six parts - the Pacific coast, with its growing Chinese population; the South, with its Hispanics; Texas, where independence movements are on the rise; the Atlantic coast, with its distinct and separate mentality; five of the poorer central states with their large Native American populations; and the northern states, where the influence from Canada is strong.
He even suggested that “Russia could reclaim Alaska – it was only granted on lease, after all.”

/I really dread having to drive all the way to California to get Chinese food.

Nov 25, 2008 - 7:53 am 7. anton:

Gloom, That is kind of funny coming from a Russian, his country (empire) has already collapsed and the rump of it is in far worse shape than the US.

Nov 25, 2008 - 8:36 am 8. anton:

I’m with you on that Chinese food thing though.

Nov 25, 2008 - 8:36 am 9. The Historian:

AMERICA’S REAL ECONOMIC CHAOS
Those in charge, trying to fix this economy, don’t have a clue:

http://greensrealworld.blogspot.com/2008/11/americas-real-economic-chaos.html

Nov 25, 2008 - 8:42 am 10. Charles:

As 2008 Nobel Price in Economics winner, professor Krugma said, “Rebpulican party becomes a party of stupid.” This is global economy, if US sniff then the whole world get cold. So the US market needs to get up and running. BTW, we have 10+ trillions of debt (half of that is constrbuted by Bush alone), and the interests is killing next few generations. Supply-side economy simply does not work!!

Nov 25, 2008 - 10:58 am 11. Sandy Salt:

Gloom and doom is driving this crisis, which much like the oil crisis of this summer is solely caused by the media scaring the crap out of the stupid public. Things are not so hot, but they are nothing compared with the 1980-1982 recession or the 1930’s. We need to stop bailing companies out because it only adds to the problem not solve it. I found it very interesting that when one company was going under there were two there ready to carve up the remains. If we had not listened to the media and paniced, we might have seen some companies fail and the government might have taken regulatory action to limit the fallout, but instead the congress whipped up in a frenzy by the media gave us $2 trillion in bailouts and nothing to show for it. We the people let our congress know 100-1 that we were against the bailout, but we still got it because the congress is scared of the media. The media now picks Presidents and forces congress to act just to fill 24 hours of news. If congress really wanted to help America they would pull the plug on 24 hour news coverage.

Nov 25, 2008 - 12:19 pm 12. Sandy Salt:

And another thing, the only part of the union that would break away is Texas because the rest enjoy the federal tit way to much to risk its loss. So take that Boris!

Nov 25, 2008 - 12:25 pm 13. Hyphenated American:

Sheepish, don’t be stupid…

“Lets be sure and do everything the ‘Stock Market’ would have us to do. We cant have the market upset or diving. ”

The market, my little friend Sheepish, is the sum of knowledge and understanding of the society. If this sum is saying that some idea is wrong – then it is very likely wrong. Very few people can project the future better than the market – and practically none can beat it in the long run. So, yes, there is a very good reason to listen to the market. Who else are you going to listen to?

Nov 25, 2008 - 12:34 pm 14. Hyphenated American:

About Summers:
“He has consistently advocated big, bold, and expensive government stimulus efforts.”

I never heard an explanation on how these “big, bold and expensive” government programs work. I mean, it’s not like the theory of broken window has been disproven. The money has ti come from somewhere. Where would the money come from, comrades? It’s not like the government can create the wealth out of nothing…

Nov 25, 2008 - 12:42 pm 15. Sandy Salt:

The money comes from our pockets, our kids pockets, our grandkids pockets, and probably their kids pockets. We need to stop the bailouts now! We are out of money and companies need to man up and suffer some pain. I didn’t see them running to the government to offer their huge profits to pay off the national debt, so they can just keep walking with hat in hand.

Nov 25, 2008 - 1:00 pm 16. Gloom and Doom:

$800$- billion more just announced today for those home owners that didn’t help me pay my mortgage.

If I stop making my house payments,
will the Feds send money?

/you cant make this stuff up!

Nov 25, 2008 - 2:14 pm 17. thegr8_1:

For those of you who wanted to be a part owner of a bank, insurance company, maybe automaker, hospital, or oil company or just about anything else, congratulations you elected and appointed the imbeciles responsible for making your wish or nightmare come true. We have 7.4 trillion dollars in the pot and I’m sure much more to come. Thank you to the morons who vote for politicians knowing less than those who vote on American Idol. There are a few people with brains out there but too few and far between. I don’t want to own any of these cancerous companies but I am stuck like everyone else. Quit bailing out these terminally ill companies and hold people accountable. We now reward failure and penalize success and this must stop now.

Nov 25, 2008 - 6:08 pm 18. Someone75:

I’ve actually been saying that Obama is a centrist for a long long time, but of course nobody listened to me. Let that be a lesson.

Nov 25, 2008 - 8:57 pm 19. ew:

Here we go again. It looks like the illuminati’s promise of “change” isn’t so much of anything, rather than the same.

Nov 27, 2008 - 5:58 am

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