No Team of Rivals on the economics side.
The deep ideological divide that is emerging in the economics profession between those who worried about manic neoliberalism and Bob Rubin-style turbo-charged tilts towards an increasing unregulated finance industry is not hitting the Obama administration – because it is only hiring one side of that divide.
As best I can tell Obama is stacking his team with those who George Soros disdainfully calls “market fundamentalists.”
Liaquat Ahmed metaphorically profiles the Rubin-led financial ideologues in his Depression-focused new book, The Lords of Finance: The Bankers Who Broke the World.
George Soros has told me that there is a big difference between them, but honestly, I’m still straining to see the the difference between Hank Paulson’s views and those of Lawrence Summers, though i know Summers is working hard to revise his vies.
But take a gander at Joe Stiglitz’s comments on the nation’s financial crisis. His candid comments near the end of the piece that the U.S. must do something to better align the interests of failing financial institutions with American priorities and needs makes sense — and his prescriptions make sense. . .but they are starkly different than what we are hearing from Obama Land right now.
Interestingly, I learned recently — and this is a bit of a counterpoint to my argument — that Lawrence Summers called Stiglitz privately to get some counsel on what was going on. Summers apparently made clear that he didn’t want to be making the call to Stiglitz — but had to. In other words, there is someone above Summers who wants diverse inputs into his economic policy thinking. The problem is that this interest in diversity is completely missing on his actual team.
There were names here and there who might have kept some balance between those who could think through the micro-economic dimensions of economic policy and the macro types who helped contribute to today’s problems — but Obama’s selections have mostly been the latter type of Robert Rubin acolytes. I would count Council of Economic Advisors Chair Christina Romer in that mix as well as both National Economic Council Chair Lawrence Summers and Treasury Secretary Timothy Geithner.
Today, we hear the news that former Hamilton Project Director Jason Furman (good guy — and friend of mine) who also served as Obama’s campaign senior economic policy director is going to be one of the National Economic Council deputies. The other is McKinsey Global Institute director and former Goldman Sachs alum Diana Farrell, who admittedly is also a friend but tilts towards market fundamentalism like all of the others on the Obama team.
Obama has essentially brought in the same crowd of people or ideological fellow travelers who helped hatch the Clinton era manic finance fest that the Bush administration made worse.
Labor must be freaking out.
Obama chose in his decision for Commerce Secretary not to run with Leo Hindery, a Democratic CEO, who has vast experience in the broadband and telecommunications field but who helped animate many of John Edwards’ progressive campaign ideas on rewriting America’s domestic economic social contract.
Skipping over Hindery may have been the work of some others close to Obama who worship at the alter of Robert Rubin. And they too are part of the increasingly ideological incestuous pool of thinking on economic policy.
Now, word is that outgoing Symantec CEO John W. Thompson may be the next Commerce Secretary. I know Thompson only at a distance and have nothing good or negative to say about him — other than it’s great he knows something about American technology and high wage jobs given his deep roots in Silicon Valley.
But he should also know that while many IT software firms produced vast wealth in the middle of the internet industry bubble, the American job base did not get a high wage job trickle down from those sectors, at least not to the degree that was expected.
In fact, Silicon Valley — while clearly a revolutionary place — mimicked much of the pattern of Wall Street. Another go-go bubble with a few getting vastly wealthy while the rest of the country chugged along in the real economy, detached from the growth and gains of those sectors.
I realize that this is a bit of an overstatement unless acknowledging the many efficiencies American and global society absorbed from the IT boom, but still — my point is that Obama has no one on board who essentially is considered an economic heavyweight who thinks that America’s domestic covenant, or social contract, with its citizens must be redesigned.
Wait, there is one person — former Economic Policy Institute labor economist Jared Bernstein, but he is assigned to Vice President Biden — not to President Obama’s economic slots.
Obama and Rahm Emanuel have hired a group of people who are going to make the rich stay rich — and who are not designed to really change things for the middle class or the struggling lower end.
After all, it was they who said that the economy was booming, that offshoring was great, that manufacturing was not important, that those CEOs deserved that high pay and little could be done about it, and the reason that the middle class was being left behind is that they were becoming less globally competitive and/or they didn’t have the educational background or fortitude to keep pace with the highest end earners.
John W. Thompson looks interesting – but at this point, he’s not being considered as a core part of the “economic war room team” — but I hope if he is good and reads this blog post that he will get in there and demand his seat at the table (if nominated and confirmed) and that he will take his Commerce Secretary job seriously. Few have in recent decades.
Thompson is an entrepreneur, an African-American, and a former “Bush Ranger” — yep, it’s all part of the bipartisan thing. . .but what is most important is someone who can get our “winner takes all economy” to really help all boats rise again. My choice would have been Hindery — but if Thompson is going to get the job — he must take on the cause of seriously wrestling with Obama’s manic neoliberals to help promote American high wage jobs.
Here is an interesting profile and Q&A of Thompson that a friend just sent me from the Silicon Valley Community Foundation.
Because while business is important to have in the room — so too must people think about how the whole operation — not just capital works. That means workers, families, technology, firms, and government. Hilda Solis from Labor should be in there too — but Labor always seems to be just outside the door when the big economic guns are making their plans.
– Steve Clemons