As Larry Summers nears the end of his term as director of the National Economic Council, the list of potential replacements has been whittled down to three, according to Obama administration officials familiar with the deliberations: Treasury adviser Gene Sperling, Wall Street banker Roger Altman and Yale president Richard Levin.
The three represent a range of ideologies, from sympathy for Wall Street to vigilant consumer protection. At this critical point in the economic debate, the president's choice will send a powerful signal about the administration's leanings. If it's Sperling or Altman, critics say, the country can likely expect a continuation of a Wall Street-sympathetic approach to policy for the next two years.
The stakes are high, both for how the administration is perceived and how it determines policy. As Peter Orszag, Obama's former director of the Office of Management and Budget, has taken a senior position at Citigroup, pundits like Joe Klein and Jim Fallows are griping about the government's ties to Wall Street.
"This move only reinforces my growing sense that the Democratic party has to pry control of its economic policy away from the Wall Street caucus -- the Rubin, Summers, Geithner, Rattner and now Orszag etc. gang," Klein writes.
On the other hand, Wall Streeters have been whining in recent months that Obama -- despite presiding over a policy of historic bailouts and, more recently, record corporate profits -- isn't sympathetic enough to their interests. "He hurt their feelings," said Dean Baker, co-director of the Center for Economic Policy and Research in Washington. When Summers' departure was first announced in September, pundits speculated that the replacement would be someone with real-world business experience. Altman, and even Sperling, would fit that bill.
The appointment of either Sperling or Altman would cement the administration's symbolic ties to the financial sector. A Levin appointment, however, would signal a break from previous policy, and a step toward tight Wall Street regulation, with a more muscular job-creation agenda.
Judging by Sperling's record in government and on Wall Street, he would likely favor a policy of lenient regulation of the banking sector. Like Summers, Sperling has ties to Robert Rubin, the former Treasury Secretary, Goldmanite and, more recently, chairman of Citigroup, who pushed for deregulation under President Clinton.
After serving as deputy NEC director, Sperling took the commission's top spot in 1996, overseeing a policy of deregulation of Wall Street. Under Sperling's watch, Congress repealed the Glass-Steagall Act, a rule-easing that many believe contributed to the financial crisis less than a decade later.
Sperling has made his share of Wall Street cash. Before becoming adviser to Treasury Secretary Tim Geithner, he did time at Goldman Sachs. The year before taking office, he reportedly earned nearly $900,000 as a Goldman consultant.
If Sperling's background is mostly policy with some business experience, Altman's is mostly business with some policy. Altman is the founder and chairman of Evercore Partners, a boutique mergers and acquisitions firm that advised General Motors through its bankruptcy, pulling in fees that the Department of Justice called "unreasonably rich." In the early years of the Clinton administration, Altman served as a deputy Treasury secretary.
It seems likely that Sperling or Altman, if appointed, would continue the policies of their predecessor. But Sperling, for his part, would likely depart from Summers in style. Whereas Summers has been known for his assertiveness in the administration, Sperling is more inclined to defer to others' opinions, Baker said.
"The biggest difference is if they're a Summers type, calling the shots, or a bureaucratic type, getting the ideas," Baker said. "[Sperling's] particular views on stimulus probably wouldn't matter much."
While it's difficult to say how assertive Levin would be as NEC director, his views make him stand out from the pack. As HuffPost has reported, his appointment would signal a departure from previous administration policies, a move toward the Elizabeth Warren camp of tight Wall Street regulation and proactive job-creation.
According to Robert Shiller, Levin's colleague at Yale, and judging by speeches Levin gave last year, the Yale president would likely support a second stimulus, with job-creation as a focus.