Where is the Economic Team of Rivals?

Barack Obama has promised to fill his cabinet with rivals, which in theory will keep policy discussions and decisions lively and balanced. However, it appears there is at least one area of his fledgling administration that is not open to discussion or debate - the economy.

In Obama's economic team, only the voice of Bob Rubin's "Rubinomics" is represented: balance the budget, deregulate, and expand free trade. Those appointees and advisors such as Timothy Geithner, Lawrence Summers, and Peter Orszag are all Rubin disciples, and therefore represent a similar position on the economy. They are hardly rivals. The appointments of men who share a common philosophical umbrella is unwise enough, but Obama is so enamored with Rubin that he went a step further and hired the man's spawn, James Rubin, as a headhunter.

Individuals will remember old Bobby Rubin from his days in the Clinton administration where he was Treasury of the Secretary. Rubin then went on to serve as Director and Senior Counselor of Citigroup. Of course, the government now finds itself in the position where it is bailing out Citigroup, yet another bank deemed too big to fail.

There are patterns here, and the patterns are ideology and investment. While economic experts now agree that some kind of regulation is needed, especially in the realm of multi-billion dollar bailouts, the overall ideology of free trade being good for the world remains intact. As President Bush so helpfully reminded us during his recent trip to Peru, there is nothing wrong with free trade. Free trade will show us the way. All hail Free Trade!

The second pattern is investment. When government officials travel through the revolving door directly into private sector banking and investment positions, and then sometimes travel BACK into government jobs, they of course represent the interests of the market, and not the people, of the United States. The almighty dollar is their most prized constituent. This second pattern is so powerful that it doesn't take direct conflict to persuade opinions. All it would take, for example, is for a man like Bob Rubin to have an investment in a group like Citigroup in order to extend his persuasive hand to his former disciples, who now have the ear of the President-Elect.

Both of these patterns are reasons for why an economic team of rivals would be a good thing. Otherwise, only one narrow alley of the country is represented: Wall Street. Of course, Obama promised rivalry within his administration, and not departmental rivalry, but a mix of economic ideologies is important primarily because the ideologies of deregulation and free trade are failing. In the case of Citigroup, they have failed. Risky investments and deregulation have led us to this clusterfuck arena, and the solution isn't packing the treasury with more Yes-men Rubinites.

As Obama is so fond of saying, the solution is to develop an economic team of rivals, or at least include one fan of regulation and accountability in the new economic team. It's not enough to reinstate the economic players of a bygone era. Besides, Clinton shares the blame (See: NAFTA) in the current economic firestorm, so simply bringing back his Treasury team isn't enough to cure America's recession blues.

It will take radical new thinking to dig us out of this one, and a lively discussion about the broader economic system is where we need to start. Bring on the rivals.

Click here to read more developments and analysis on Obama's cabinet picks

Comments

[adamsmith3]

Obama.....perhaps a neoliberal in protectionist's clothing.....and thank God if that is the case. I feel bad for the progressives that were expecting the resurrection of tariff walls. Who knows though....we may see the nationalizing of a bank or two....or the re-emergence of labor union power with the card check initiative. But, as an economic conservative, I feel relieved and optimistic after seeing Obama's economic team. Instead of a Reich, Krugman, etc. team, we have a team that isn't still pretending (or wishing) that it were the 1930s all over again. Obama has shown with this team that he is a results-oriented technocrat and that all of the fears that many conservatives had about him being some leftist were misplaced. Then again, maybe Obama is so politically shrewd that he is using a centrist economic team to achieve a progressive agenda only to make the center move to the left.

[davidly]

Thanks for lending this site more credibility, Allison. Maybe I'm singing the obvious to the choir, but one mustn't forget Clinton's signing of the Gramm-Leach-Bliley Act, which he now claims "has helped stabilize the current situation" - using Bank of America's ability to buy Merrill Lynch as support of his assertion.

Interestingly, had he not signed the bill, which had passed straight down party lines, I wonder how many Dems would have flipped in order to override his veto. In other words, I wonder if he was giving his party cover. After all, we just know that it's only those evil Republicans who favor deregulation. At least out in the open.

[ArturoYee]

I'm hoping for Christina Romer - she is only the chairperson - but they may bring in different economic views. The rivalry is between politics and economic policy.

[Erdgeist]

Well, if Robert Rubin was a champion of free trade, NAFTA proved enough of a flop to change his views in addition to the fact that the U.S. had to bailout Mexico after NAFTA. NAFTA, in retrospect, didn't help Mexico at all. It has remained a poor country, while the gap between the rich and the poor continues to be huge.

Personally, I hope that the new president has learned a number of lessons from Clinton's mistakes, and Rubin's, above all, that free trade is rubbish. I have found no convincing evidence that free trade has created good paying jobs for Americans. What the American economy really needs is a halt to offshoring, which is part of free trade, and a recrudescence of domestic manufacturing.

[kristycu]

I think so, what people seem to miss it that Obama understands more than people gives him credit for. He understands free trade and what needs to be done. He tells them what he wants and they have to come up with the plan. why people don't see that. i don't know. Obama can say i want these types of restrictions and safe guard and protections.."make it work" "give examples of how that can be structured". this is how that works. pretty simple really

[tavote08]

Most act as though P.E. Obama is some kind of fool that is going to be lead around the Oval Office and White House by the nose like some kind of jack a$$. Let not lose site of the fact that each and everyone of these people are employees, and I for one don't agree with may of by bosses policies/ideas/requests but I want my job; and at the end of the day that's all that matters.

I don't care if every person he hires has the same mother, as long as they know how to list, follow instructions, and produce...

[Kassandra]

Why do I keep feeling sick to my stomach about nearly everything Obama is doing so far?

[aubrey8]

you must be a conservative.

[JRsNana]

Gee, I don't know. Bad tuna?
Listen, he announced his full economic team today and the market shot up historically. What else do you want from him? Wine from water?
Maybe you could just let him actually become the President first before starting the whining.

[davidly]

You mean he's sworn in it'll be possible to criticize without being labeled a winger or a whiner?

[Mason]

I feel exactly the same way and I am at an utter loss to comprehend the blind faith of so many who post here. I've been called a troll, a Republican, a Hillary hater, a complainer, and stupid for daring to question what he is doing and why he is doing it. I always question authority and I never trust politicians. I voted for Obama and do not regret it, given the alternative. I do not believe that most of the people he has selected to serve in his administration have new ideas to offer. I'm also seeing a lot of people who agree with each others views and not the collection of advisers with different ideas that Obama said he wanted. The message so far is clear: Left wing progressives have nothing useful or important to contribute. Therefore, they will be ignored and unwelcome in his administration. Pretty stinging rebuke to a lot of good people who worked hard and contributed money to his campaign.

[watereddown]

BO called himself a pragmatist from the beginning but the pie-in-the-sky- daddy-is-gonna- save-us-left saw a savior on a white horse who would slay the right wing and institute a hallowed dawn. The Rorschach here is delicious- people see what ever their wishes reach for. BO has assembled a good solid team who will keep things essentially the same but patch up capitalism. He is not going to throw it out- HE IS ONE OF THE RICH ONES! Wake up. The system needs regulation, deleveraging, tax cuts for the poor and middle class. But anyone who believes a golden chalice is around the corner is sorely mistaken. The best we can hope for is a 1990's style of governance, where people do reasonably well- have middling jobs, struggle, but have enough for a beer everyonce in a while. But the rich will always do the best. That is simply the way it is. that will never change. I can say wake up- or I can say grow up- take your pick. We need to escape the economic crisis- anything after that is gravy.

[MasterX]

"You say you want a revolution, well you know, we all want to change the world."

J.L. 1968

[Kassandra]

I see no "Knght in shining Armor" myself. AND I think most of us are a little more pragmatic than that.

[super]

For a breath of fresh air, how about Naomi Klein?

[raoulhubris]

Klein is Canadian but she recommends Joseph Stiglitz. The U.S. economy has been ruled and destroyed by the Chicago mafia in economics. She warns against Summers and Rubin who had their filthy hands in the deregulation scam. This economy doesn't get in gear until you, the consumer, trust someone. Doesn't hat give you the willies?

[Sagantech]

I wholeheartedly agree with the author. Put people who predicted this mess in the highest office. We need people like Max Keiser and Peter Schiff to be running the economy of this country. You can't just throw paper money at the problem to solve it.

Before bailouts are issued, the top executives need to be replaced and all of their pay while they were losing company's money, needs to be returned. All of it.

[cheforacle]

Geitthner was predicting it but to mention that would constitute a refutation of your main point so I guess that's why you exclude it. And why doesn't anyone mention the former Kennedy aide that was appointed head of domestic policy today. She's not a Rubin disciple. People seem to overlook the facts that don't fit the simplistic theories being proferred here

[leftLibertarian]

But Peter Schiff would be against any bailout. WIMHO would be a good thing. The US Government is running on borrowed money from China and India. We will never be able to pay them back and sooner or later they will stop lending us money.

[oldgeek1]

The economic team of rivals is what we have had for 8 years.

We now have a President who has the intellect to make judgements, does not suffer from attention deficit disorder. Obama has surrounded himself with smart qualified people rather than 3rd rate political hacks who have experience. Let's not lose sight of the huge mess that we are in and who got us there.

My wife and daughter know how to manage a budget better than this current crop of fools.

Forget the economic team of rivals, it appears an economic team of professionals is what we are getting.

[marijam]

It's outrageous and I'm not buying into the theory that "they broke it so they know how to fix it". It was Rubin and Phil Gramm that got us into this deregulation mess in the first place.

[FearlessFreep]

If they know how to fix it, why didn't they know how to keep from breaking it? (The latter would seem easier to figure out.)

[cheforacle]

Do you really believe two people got us in to this mess. The combined decisions of thousands of people got us to where we are. but that's too difficult to conceive so blame all the bad loans, stupid business decisions and lack of SEC oversight on those two individuals.

[harriscrl3]

I dont buy this argument because Obama said at the outset that one of the things that all these people share is the belief that you grow the economy from the BOTTOM up. So I fail to see how all these people are deregulators.

Obama also said something I really wish people would listen to he said its not a choice between heavy handed regulation and No regulaiton that there is a middle ground. To me folks just cant seem to get out of this extremist thinking, Its either regulation or no regulation we have to STOP thinking like that. This is what Obama's philosophy balance finding that middle ground.

Carol

[FearlessFreep]

To me it sounds more like "Split the difference and hope for the best."

[joebhed]

I feel for you, Carol.
I'm afraid this will be a long four years of giving him a chance.
To do something.
Different.
Like, change.
Don't see it coming yet.
But, we can all hope.
For another four years.
Oh, I almost forgot.
He ain't Bush.

[kohoutek]

I love how all you people who don't actually know squat choose to criticize picks based on not really knowing squat.

Obama's picking pragmatic adults to deal with a catastrophe. Put aside the pie-in-the-sky, juvenile progressive wishlist and just let the man get on with it. He's smarter than any of you and he's got the job.

[unfiltered]

i just replied too but realize these articles are for entertainment. dumb people wish we left dumb ideas on the table to consider.
no one is a strict protectionist because they wouldn't be respected due to overwhelming evidence against it.
next, she'll wonder why his energy team won't have someone who doesn't believe that man contributes to global warming.

[wigglwagon]

Please show one shred of evidence that free has benefitted the US economy. It is not there.

[DannyRose]

Are you speaking of the same "adults" who have brought this calamity upon us in the first place? FYI, Mr. Geithner has been directing U.S. monetary policy for the past 5 years from his perch atop the N.Y. Fed. How do _you_ think he's doing? Also, you haven't addressed anything brought up in the article, instead resorting to empty name-calling. Do you believe that free trade is conducive to the maintenance of a substantial middle class or not? Do you believe that de-regulation has benefited the financial system in the run-up to this meltdown or not?

[cheforacle]

Well the NY Fed does not run the show by itself and monetary policy is only one aspect of why the economy is where it is today. What specifically has he advocated and when? I look forward to hearing about what he has actually decided and its effects?

[FearlessFreep]

"He's smarter than any of you and he's got the job."

Just like the people who introduced the disastrous deregulation policies were smarter than any of us. (Stupid is as stupid does.)

[leftLibertarian]

Please define 'pragmatic adult.'

[zjr909]

To all those who say "Shut Up Already! Let the man do his job!", I would just like to point out that the time to speak up is, in general, before it's too late. A done deal is hard as hell to un-do, because it assumes a life of its own once it's done. I read another post, in another blog, which suggested that the Clintonites were just about the only Democrats with any experience - so there was little choice for Obama but to go to them. That, in turn, raises an interesting question: why were these the only experienced people for the Democrats to choose from? One very likely answer: the Democrats don't see things all that much differently from the way the Republicans do. And now we're being told that Obama is hedging on raising taxes on the wealthiest Americans. Hmmm. Wonder which almighty Centrist advised him on that one? But, hey: let's not be all gauche and complain; let's just sit tight and see how it all plays out. And, rest assured, it'll all be for the best, no matter how much richer the rich get or how much poorer the poor get. Besides, our kids and grandkids are good for it; they'll thank us for letting them pick up the tab for bailing out one mogul after another. You just watch.

[FearlessFreep]

What the "experience" argument comes down to is that because various outsiders weren't given a chance under Clinton, they shouldn't be given a chance to do so under Obama either.

There's a columnist here who was just asking why the next CIA director is more likely to be someone who got the Iraq war's prospects wrong then one who got it right. You could also ask why people who got bank deregulation wrong are more likely to be directing Obama's financial policies than people who got it right. And the inevitable answer is that being right is less important to the president-elect than being one of the Big People.

[sportsjefe]

... or because the only Democratic administration in 28 years was Clinton's...

[hortonhearsawho]

How about they each carry a battle-axe into meetings and snarl at each other.