What to make of the Obama economic team

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I think it’s pretty clear what Barack Obama was up to in choosing Tim Geithner to be his Treasury Secretary and Larry Summers his chief White House economic adviser. He knows we’re in a serious economic crisis, and he wants people who know what they’re doing and can get stuff done, quickly.

As for Summers, who has got to be the first former Treasury Secretary ever to have accepted a role as a White House aide (Don Regan switched from Treasury to being Ronald Reagan’s chief of staff; but chief of staff is more than just an aide), there’s been lots of speculation that he’s just setting himself up to succeed Ben Bernanke at the Fed in two years. Color me at least slightly dubious on that. Summers doesn’t strike me as a Fed material (too much discretion and self-abnegation required). Although I guess it would fit into his continuing quest to build the most insanely over-the-top resume ever. Next up after the Fed: A Nascar Sprint Cup!

My own entirely uninformed speculation: Summers took the job because running administration economic policy in the middle of the worst economic crisis in 75 years is an historic opportunity–regardless of what comes next. You’d have to be a putz not to say yes to the President-elect in an hour of such need.

As for Christina Romer as chairman of the Council of Economic Advisers, the presence of Summers over in the White House means that she’s not going to take the lead role in formulating economic policy. But CEA chairman seldom do. Bush administration CEA chief Glenn Hubbard had a brief moment in the sun after rivals Paul O’Neill (the Treasury Secretary) and Larry Lindsey (the top White House economic adviser) imploded. But that was sort of the exception that proves the rule.

If the role of the CEA is to be a fact checker for the proposals emanating from the White House, then Romer is a spectacular pick. In fact, her appointment is evidence of the Obama transition team’s skill at assembling a diverse administration without resorting to the obvious stretches that characterized the Clinton era. The Obamanites clearly wanted somebody who wasn’t a white guy to occupy the administration’s third most visible economic post. But they ended up picking one of the great number-crunching scholars of our time, an expert on monetary and fiscal policy, a historian of the Great Depression. After the fact, Romer seems like the entirely obvious choice.

Romer’s appointment is also, because of a recent paper (pdf!) co-authored with her husband David on the economic cost of tax increases, giving heart to the tax-dislikers among us. I think they’re overstating her likely influence. But hey, you never know.