Summers to Head National Economic Counsel

From ABC News:

ABC News has learned that President-elect Obama has decided to name former Treasury Secretary Larry Summers the director of the National Economic Council, essentially the president’s senior economic adviser.

Part of the Executive Office of the President, the NEC was created for the purpose of advising the President on matters related to U.S. and global economic policy. The NEC has four functions, by executive order: ensuring that programs and policy decisions are consistent with the President’s economic goals, monitoring the implementation of the President’s economic policy agenda, coordinating policy-making for domestic and international economic issues, and coordinating economic policy advice for the President.

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  1. Anonymous

    MAD: mutual assured destruction.

    The Clintons could not find enough dirt to take Obama down in time for Hilary to win the nomination.

    But timing is the secret of comedy, and history… all concerned are better off with their hands on *some* of the levers of power, so mutually acceptable accomodations are now being made.

  2. doc holiday

    Re: “What deal did the clinton’s make”

    I am really amazed by events in this play, because I thought Hillary was to stay in The Senate to help increase voting power. As I recall, Obama and Hillary were in a secret meeting after she lost the nomination and the press was waiting to see if she would be VP, but guess they cut this fat hog instead and the issue of voting is a non-issue.

    In retrospect, it may be interesting to see why her “power” is being shifted into this globalized role, i.e, maybe they are setting up something in terms of a global policy shift in regard to this financial fire? Could this be a time for a new global policy with currency intervention, or a way to sell some new financial product?

  3. Anonymous

    why is anyone suprised obama has chosen former clinton admin members for his cabinet?

    g. bush staffed his with former members of his dad’s regime. in fact in hindsight his cabinet and the secondary and tertiary positions were essential a “war cabinet”.

    gee i wonder why?

  4. Anonymous


    Driven: Shai Agassi’s Audacious Plan to Put Electric Cars on the Road

    Agassi reimagined the entire automotive ecosystem by proposing a new concept he called the Electric Recharge Grid Operator. It was an unorthodox mashup of the automotive and mobile phone industries. Instead of gas stations on every corner, the ERGO would blanket a country with a network of “smart” charge spots. Drivers could plug in anywhere, anytime, and would subscribe to a specific plan—unlimited miles, a maximum number of miles each month, or pay as you go—all for less than the equivalent cost for gas. They’d buy their car from the operator, who would offer steep discounts, perhaps even give the cars away. The profit would come from selling electricity—the minutes.

  5. Anonymous

    Remarks by Chairman Alan Greenspan
    Before The SOMALIAN PIRATES of New York,
    December 19, 2002
    Issues for Monetary Policy…219/ default.htm

    Although the U.S. economy has largely escaped any deflation since World War II, there are some well-founded reasons to presume that deflation is more of a threat to economic growth than is inflation. For one, the lower bound on nominal interest rates at zero threatens ever-rising real rates if deflation intensifies. A related consequence is that even if debtors are able to refinance loans at zero nominal interest rates, they may still face high and rising real rates that cause their balance sheets to deteriorate.

    Another concern about deflation resides in labor markets. Some studies have suggested that nominal wages do not easily adjust downward. If lower price inflation is accompanied by lower average wage inflation, then the prevalence of nominal wages being constrained from falling could increase as price inflation moves toward or below zero. In these circumstances, the effective clearing of labor markets would be inhibited, with the consequence being higher rates of unemployment.

    Taken together, these considerations suggest that deflation could well be more damaging than inflation to economic growth.

    In summary, as we focus on the dangers of bubbles, deflation, and excess capacity, the marked improvement in the degree of flexibility and resilience exhibited by our economy in recent years should afford us considerable comfort for now.

  6. Richard Kline

    This pending appointment of Summers is significant. Over the last two generations, real power in an American Administration has shifted progressively to non-Cabinet ‘advisory’ positions. They are typically stocked with the closest associates of the serving President, whereas Cabinet Secretaryships are political payoffs to individuals and constituenceis. Advisors are ‘first consultants;’ and now advisors _within the White House_ have added a further and even more powerful layer exactly for this reason. Cabinet positions, and even more their institutional bureaucracies, are closely webbed to Congressional appropriations and oversight, whereas advisors travel light, stay low, and are handed critical real-time missions which enhance their policy leverage and AttP [Access to the President]. Some institutions, such as the Justice Department, have lasting institutional weight over and above what a sitting President commands directly. With a war on, the Sec. Def. manages to come up to par with the NS Advisor, but only barely, and only then. But we could just as well have NO Sec. of Commerce, or Education, or HEW, or frankly of Homeland Beak-wetting; the undersecretaries would run those shops just as well and even better without an appointee down the hall.

    From that perspective, Summers, Gen. Jones, Craig as Pres. counsel, and Rahm Emanuel have been the key appointments. Of course, the media gets all this wrong, as usual. And it is worth noting that all _these_ positions went to Obama’s inside team. That tends to suggest that he will run his policy shop on the inside as a closely held directorate. In case you didn’t notice, that is what Bill Clinton and Dubya have both done. The Thin Fresh Prince isn’t stupid, and does have good administrative advice.

    But in the larger perspective, we have learned something important and useful to know from the round of leaked and announced appointments so far. Now, Obama has never had any experience as a political executive, so it has been hard to project what kind of Executive he would be; that has been a real problem in deciding whether to vote for him for those who vote on a rational basis. Now, we have a view: he has no spine. The Clintonites _completely_ rolled him on the face-out-front appointments in the Cabinet, and in many other nooks and crannies. He caved on Geithner, a Republican deeply implicated in a bad bailout process. (Yes, Geithner brings positives in that he is current-on-crisis and the markets will have an initially favorable response in that he is their ‘remote controlled man.’) All we need is for Gates to be retained at Def for the same reason, and we see who Obama is. Someone whose primary skill is ‘getting elected,’ bereft of real ideas, change, or any interest in either.

    And it isn’t just his appointments. Obama made perhaps three substantive committments to REAL change in the course of his campaign: a) draw down in Iraq [he weaseled on full withdrawal but implied close to it]; b) tax the rich; c) invest in long green [which means nothing, but makes a nice and new slogan]. Obama is making noises that he will stick to c) in 09. We’ll see, but the promise is so vague he could hold photo-ops and claim mission accomplished. Obama has just gone wobbly on b) though, and that is a big climbdown. “Can’t tax in a recession.” Yeah, and who’s going to pay for those bills? Don’t be surprised if those unrescinded tax holidays for the rich Obama is now going to allow to continue find ways to their continuation years down the road after his false promise is forgotten. Obama got rolled by the rich and backed off _fast_, playing nice when he got too near the power center and was shooed away. Don’t be surprised when he backs away from a), that’s coming, too.

    Obama gives early indicators that he has no spine, and wants to look nice and good rather than get all mussed ‘n’ bothered in a bare-knuckle fight over power. O’course I’m biased in that view, since that was my reading on him all along. I regret to say that he is inching toward the deep-carpet of Bought In that I expected, and at a very early date in his ‘Administration’—before he even takes the oath!

  7. luther

    it’s sure beginning to look that way, isn’t it richard.

    i just went over to huff post and took a gander at the summers news post. everyone who is criticizing or even questioning the appointment is being labelled as a troll. the obamabots are out in full force and loaded with venom.

    i’ve really been trying hard to give Mr. O the benefit of the doubt but someone over there posted this quote:

    “The real gamble in this election is playing the same Washington game with the same Washington players and expecting a different result.” — Barack Obama, Dec 27, 2007

    fool me once, shame on me.
    fool me twice, um…

    on the morning after the 45th anniversary of the assassination of JFK, i have come to the conclusion that the US Government is, has been and always will be, corrupted to the core.


    note to the goldbugs: watch your stacks.

  8. luther

    CR has a post up with the stimulus plan proposed by summers in september:

    "There is a compelling case for significant new commitment to infrastructure spending. While infrastructure spending is often seen as operating only with significant lags, I have become convinced that properly designed infrastructure support can make a timely difference for the economy."

    of course, anyone who has ever been near a construction project can attest as to how easily massive amounts of moola can (& does) disappear into a black hole.

    this is all getting too predictable…and more than a tad boring.

  9. Anonymous

    Maybe we shoud wait a little longer, before we grade BO on his administration. Like, at least two weeks after it actually begins.

    I definately share the unease that too many Clinton faces are showing up in critical places. I also link the Clintons with the rise of the New South-Walmart-Citigroup plantation model, which bodes poorly for the working people in America.

    I am struck by Greenspans double speak, cited in the comments above, on the predictable deflationary effects of the war on US labor markets. He still hasn’t put two and two together. The consumer can’t spend what he doesn’t have, especially now that his credit has dried up. Throw in a huge unemployment and underemployment, desperate third world mercantilist supply, and the reality is complete. How can Greenspan, or anyone else, not expect massive deflationary pressures ? Seven dollars an hour and no benefits. The real meaning of “free trade”.

    As the GWB economic strategy has shown, we need a credit binge, at least one war, and criminal, fiscal irreponsibility to keep this boat afloat. Except that boat has allready sunk, with all hands aboard.

  10. Anonymous


    You say that “Summers, Gen. Jones, Craig as Pres. counsel, and Rahm Emanuel have been the key appointments”. Correct me if I’m wrong, but three of the four worked for Bill Clinton and Gen. Jones was appointed Marine Commandant by Pres. Clinton. Sure sounds like the Clintons are not lacking for influence even in this inner circle of advisers.

  11. Anonymous

    To Richard Kline,

    Overall superb posts. I will quibble with one detail:

    With a war on, the Sec. Def. manages to come up to par with the NS Advisor, but only barely, and only then.

    The national security advisor has traditionally been a well educated non-entity dedicated to keeping national security paperwork flowing smoothly. The job is a Defense/Intelligence/State equivalent to the WH Chief of Staff. The WH CoS is a purely domestic side job, i.e. managing porkbarrel spending, patronage and WH staff operations dedicated to “domestic”, plus the President’s personal schedule.

    White House Chiefs of Staff do not get involved in either “National Security” or “Law Enforcement”. And if Rahm Emmanuel can’t keep his nose in joint over those areas those power centers will arrange his swift removal.

    The NS advisor’s job has often been a springboard to bigger and better things. Kissinger, Powell and Rice are examples.

    General Jones is a significant departure from the past pattern. He’s a former Joint Chief, Commandant of the USMC and Supreme Allied Commander Europe.

    There has never been as great an imbalance between inexperience and experience as the BO-Jones combination. Coming as it does in the middle of two wars it comes close to reducing the Presidency to a purely ceremonial role as Commander In Chief, similar to the Queen of England.

    In my mind he represents a power shift not just from ‘cabinet’ to non-cabinet but also from the President to the permanent federal service.

    As noted, the rest of BO’s picks are pure Clinton Admin and Congressional Democratic Party.

    BO is quickly revealing himself to have only been the existing Establishment wearing a halloween mask for the election. A neat parlor trick for evading responsibility, executed by what can only be described as a failed socio-economic-political elite class.

  12. Anonymous

    Change is only for the little people.

    For the elite everything must be done to maintain the status quo.

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