Obama to the Economic Rescue: Is He Picking the Best Team?

By Alexander Zaitchik, AlterNet. Posted November 25, 2008.

Whatever their take on the Summers and Geithner appointments, progressives have reason to cheer the recent lower-key selections of Peter Orszag to run the Office of Management and Budget, and Patrick Gaspard as White House political director. Orszag has been educating himself on the inefficiencies of our health care system at the Congressional Budget Office, and Gaspard comes to Washington from the political office of SEIU's massive New York-based Health Care Workers East Union, aka local 1199.

As for the Big Four announced yesterday, here's a quick cheat sheet:

Timothy Geithner, Treasury Secretary

Currently: President and CEO of the Federal Reserve Bank of New York

Resume: Worked in the U.S. Treasury for three presidents; spent two years crafting policy at the International Monetary Fund. Like the president he will serve, he spent a chunk of his childhood in Southeast Asia.

Permanent stain: Worked for Kissinger Associates for a few years after graduating Dartmouth.

The progressive critique: William Greider writes that the choice of Geithner "raises very serious questions about where the new president intends to lead. Geithner has been a central player in the [recent] deal-making, from Bear Stearns to AIG to Citi. The strategy has not only failed, it has arguably made things worse as savvy market players saw through the contradictions and rushed out to dump more bank stocks. On Wall Street, Geithner is known as a highly competent technocrat, well versed in the financial complexities. But he has also been seen as a weak and compliant regulator of Wall Street firms, someone who did not see the storm coming. Occasionally, Geithner would anguish publicly about the accumulating time bombs like credit derivatives and urge bankers to do something, but he did not use his supervisory powers to compel action. In bailout negotiations with Wall Street titans, Geithner and the Federal Reserve were spun around like a top more than once. No wonder the stock markets rallied explosively when they heard [he] would be their new boss in Washington."

Larry Summers, Chief White House Economic Advisor

Currently: Economics professor at Harvard University

Resume: The OG Robert Rubin protégé served as deputy and undersecretary of the Treasury and as the World Bank's top economist before being named secretary of the Treasury in 1999. Was president of Harvard from 2001 to 2006, a period marked by his famous "girls suck at math" comment and the defection of Cornel West to Princeton.

Permanent stain: Single-handedly drove up the suicide rate in Lithuania.

The progressive critique: David Corn concedes Summer's towering intellect, but  writes "it's worth remembering that he did blow one of the major calls of the 1990s: what to do about financial derivatives -- those esoteric financial products (such as credit default swaps) that helped grease the way to the subprime meltdown. Not only did Summers oppose greater regulation for those financial instruments; he led the opposition against it. [During the '90s] while others presciently spotted potential problems arising from the exploding derivatives market, Summers, [along with] Rubin and [Alan] Greenspan, blithely fell back on the conventional view: regulation is a growth killer. Obama -- and the rest of the nation -- should hope that when it comes to thinking about regulation these days, Summers has experienced a market-driven correction."

See more stories tagged with: obama, larry summers, geithner, melody barnes, economic council, orszag

Alexander Zaitchik is a freelance journalist.

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