Nominee-Designate-Leekees

We do not yet have an Obama-Biden administration economic policy team. We do not yet have nominees sent up to the Senate. We do not yet even have people who have been designated to be nominees sent up to the Senate on January 21, 2009. What we have are people about whom it has been leaked that they are going to be designated as the people to be nominated: we have a bunch of nominee-designate-leakees for three slots. They are:

• Peter Orszag: OMB Director-nominee-designate-leekee. The Director of the Office of Management and Budget is the guardian of budgetary rationality: Do the government’s tax and spending plans add up? Do they make sense? Are the right departments being given the money then need—and are they spending it the right way? Are the entitlement programs the right size and targeted the right way? The Bush II administration was marked by a series of extraordinarily weak OMB Directors who essentially did not try to do their jobs—and the country is much the worse for it. The Bush I and Reagan administrations were marked by very strong but devious OMB Directors who did not work and play well with others—and so in the end failed to do their jobs. Peter Orszag is either the best or one of a very small group of people who are the ones best qualified for this job.

• Austan Goolsbee: CEA Chair- nominee-designate-leekee. The Chair of the President’s Council of Economic Advisers is the guardian of economic rationality: Do the government’s policies make economic sense, or are they bad for the long-run health of the economy? The CEA was created after World War II by the Employment Act of 1947. After the Great Depression and the federal government’s assumption of the role of macroeconomic management and stabilization, it was thought that economists had something to say about this, that as a result that economists needed access to the president, and that this access should be institutionalized. During the Bush II administration the CEA’s offices were moved out of the Eisenhower Executive Office Building and thus out of the bubble that is the White House Complex. As a non-negotiable condition of his taking the job, Austan should insist on at least his two deputies—the other two members of the CEA—having offices inside the Eisenhower EOB. Six eyes can cover three times as much ground as two, and a surprisingly large share of the business of government is done by wandering around the Eisenhower building and the White House talking to people in hallways (or just hanging out in the Starbucks at 17th and Pennsylvania and talking to whoever comes by).

• Jack Lew: NEC Chair-nominee-designate-leekee. The Assistant to the President for Economic Policy chairs the cabinet-level committee on economic policy, and together with their staff serves as the traffic cop for the paper and issue flow on economic policy into the president. The NEC Chair’s job has two components: First, to guide the economic policy team as they hammer out a consensus view on what the best economic policy is in order to leave as few points of entry for spin doctors, lobbyists, or rogue vice presidents to twist economic policy in destructive directions. (The Bush II NEC chairs never understood that this was their principal role, and so they were all catastrophic failures at the job.) Second, in cooperation with the chief of staff, to make sure that the president hears not what he wants to hear but what he needs to hear. This usually means that the president gets pissed off at the NEC chair (and chief of staff) at some point: the best analogue to these jobs comes from track-and-field: javelin catcher. (Condi Rice is the most striking example in recent times of an assistant to the president who simply did not do her job: as NSC chair she set out to make sure that the president heard what he wanted to hear and not what he needed to hear, and in a good world she would now have no entrée into polite society.)

There are far more jobs that have not yet been filled, even in the most provisional fashion:

• Peter Orszag’s naming as OMB Director-nominee-designate-leekee leaves a hole at the equally important post which is the OMB Director’s Capitol Hill shadow: the Director of the Congressional Budget Office. My favorite candidate for CBO Director is Doug Elmendorf of the Brookings Institution.

• Federal Reserve Chair-nominee-designate-leekee. Ben Bernanke’s term as Fed chair is up in two years. Ben might not want to continue—it’s been a rough ride. And Ben will probably be damaged goods: too many people who think that he gave away too much public money to feckless financiers and too many other people who think that he has not done enough to protect and stabilize the financial system. I think Ben has done a good job—certainly a much better job than I would have done in his shoes. But I think the odds are that a fresh start would be good, and for policy continuity it would be a good idea to designate Ben Bernanke’s probable successor now.

• Treasury Secretary-nominee-designate-leekee. There are two ways to go with Secretary of the Treasury: First, to choose somebody with as much gravitas as possible—a Warren Buffett or a Paul Volcker—and give them as a deputy somebody extremely capable but perhaps not yet of sufficient financial stature to be the ideal choice for the top job. (My favorite candidate for Deputy Secretary if the Obama-Biden administration goes down this road is Laura Tyson.) Second, to sacrifice some gravitas and to instead choose the smartest and most energetic person with sufficient knowledge of finance. (This is my preferred option: and my preferred candidate is Larry Summers.) As far as the Treasury is concerned, the bench is thinner than I had first thought: you need somebody who (a) knows finance, and (b) hasn’t been making a fortune over the past five years by benefiting from the creation of the mess that the government must now clean up.

• Financial Regulatory-Legislative-Czar-nominee-designate-leekee. Somebody is going to have to design and win broad congressional support for the reformed financial regulatory system that we need. A Treasury Secretary who tries to do this job in addition to all the other responsibilities of the Treasury Secretary will be spread much too thin to be effective. My favorite candidate for this job is Sheila Bair. Here profiting from the creation of the mess is not a disability for the same reason that FDR chose Joe Kennedy to be the first Chair of the Securities and Exchange Commission.

• Trade Czar-nominee-designate-leekee. This will, I think, turn out to be a much more important job in the Obama-Biden administration than people recognize. Trade agreements are a principal way that we deploy our foreign policy soft power. And trade sanctions are, I think, going to be a principal tool in the construction of the system of global governance to fight global warming.

• Secretary of Labor

• Secretary of Commerce

• Secretary of Transportation

• Secretary of Energy

• Secretary of the Interior

Comments

[Robert Waldmann]

My Dream Team here (don't let it go to your head)

http://angrybear.blogspot.com/2008/11/obamas-cabinet.html

State Juan Cole (I mean it)
Defence Richard Clarke (don't ask why I want him in defence and I won't tell)
Attorney General Glenn Greenwald (this is absolutely serious)
Treasury Brad DeLong (or Paul Krugman if DeLong is not available)
HHS George Mitchell (total hero of the Clinton failed reform effort)
Intelligence Director Valerie Plame
Labor Larry Katz (been there done that -- sortof)
Interior Richard Waldmann (he's my brother)
Energy Michael O'Hare (really the whole RBC community)
Commerce Merge with Treasury
Veterans Max Cleland
Transportation Duncan Black
Education Claudia Goldin
HUD Atrios (OK so I cheated).
Homeland Security Abolish the department
Agriculture Jim Hightower
UN Zalmay Khalilzad
(holy mother of Allah, I agree with Bush on something)

I notice that they (ok you) seem to be a lot of White guys.

[jason voorhees]

What about drug czar?

[Pithlord]

Inevitably, Ms. Rice has the advantage of the soft bigotry of low expectations the catastrophic Bush II administration engendered. You are absolutely correct that she fundamentally failed because she was too much of a courtier to force W. to listen to what he didn't want to hear. (Although, given his personality, could anyone have done this and remained in place a week?) OTOH, she was not completely batshit insane, and had more influence on W. than any other not-completely-batshit-insane person. So I think she basically deserves her reputation for mediocrity.

[James Wimberley]

Science Adviser!

[James Wimberley]

PS: I am not a candidate for Science Adviser, in spite of Robert's kind blanket recommendation of my co-bloggers. Plus I'm an old foreign white guy.

[Dakinikat]

Did I just hear Pritzker's name dropped for Commerce? Can she actually get through any serious vetting process with all her background in Superior and CDOs?

[raft]

where is brad delong in all of this?

it's safe to say you'll get something plum in the admin, no? if you want it.

[Cdn Expat]

As smart as Summers is (and I don't care about the Harvard controversy), I think under the circumstances it is better to have someone who is right up to speed on the current crisis. Geithner.

[Cdn Expat]

As smart as Summers is (and I don't care about the Harvard controversy), I think under the circumstances it is better to have someone who is right up to speed on the current crisis. Geithner.

[Cdn Expat]

As smart as Summers is (and I don't care about the Harvard controversy), I think under the circumstances it is better to have someone who is right up to speed on the current crisis. Geithner.

[Sash]

Brad,

With all due respect, I think Summers wastes way too much political capital. The crap he pulled at Harvard when he was president is, in my opinion, reason to exclude him regardless of his capabilities and no matter how much he advocated for women in the 3rd world. Further, from all reports, he was part of the deregulation team that helped to get us into this mess and failed at any useful point to warn of the disaster to which we were heading. Perhaps I am laboring under a misconception. I hope so. I am not saying making that sort of mistake means he is not qualified. Rather, the political cost of appointing someonelike that (assuming my understanding is right), just ain't worth it.

[Barkley Rosserr]

The new dark horse candidate for Treasury seems to be Jon Corzine. If he gets it, then Geithner would make an excellent Deputy Secretary.

So, who should those other two CEA people be, maybe Brad and Jamie Galbraith?

[vtcodger]

Drug Czar? Why not Keith Richards, who has expressed deep and abiding concern about the quality of the product.

[max]

"As far as the Treasury is concerned, the bench is thinner than I had first thought: you need somebody who (a) knows finance, and (b) hasn’t been making a fortune over the past five years by benefiting from the creation of the mess that the government must now clean up."

I've been thinking that for some weeks.

"I think Ben has done a good job - certainly a much better job than I would have done in his shoes. But I think the odds are that a fresh start would be good, and for policy continuity it would be a good idea to designate Ben Bernanke’s probable successor now."

I imagine the man is worn out by now; if not, he will be. The Fed has wrecked itself at this point, and I don't think Bernanke deserves the blame for that (the title Wrecker-in-Chief goes to Greenspan), but if he gets reappointed, he's going to get increasingly screwed. Let him out and have him come back later.

"Second, to sacrifice some gravitas and to instead choose the smartest and most energetic person with sufficient knowledge of finance. (This is my preferred option: and my preferred candidate is Larry Summers.)"

Putting aside Harvard (which no one else will), there is also the fact that Summers did not go up against the consensus back in the day. Additionally, there's the Russian business. And if that stuff bothers me, people with destructive agendas will make life hell for him at the confirmation. Further, my expectation would be that anyone who takes the Treasury job now is apt to be destroyed in terms of future prospects, and may well have to depart after a year or two. So...

"There are two ways to go with Secretary of the Treasury: First, to choose somebody with as much gravitas as possible - a Warren Buffett or a Paul Volcker - and give them as a deputy somebody extremely capable but perhaps not yet of sufficient financial stature to be the ideal choice for the top job."

I think Volcker is the only choice. He has an excellent reputation, particularly for doing hard, unpleasant things (somebody referred to him as a 'sado-economist' the other day). He has the support of the street AND I expect they'd be a little afraid of him. Which is what you want. I think he's the only person who can creditably believed to be incorruptible, which is important, particularly when we just handed the banks hundreds of billions of dollars to rent-to-own their own Senators and Representatives. Moreover, he's old, so if he only stays for two years and quits, nobody is going to say it was because Obama was incompetent. It could then creditably be said that he's leaving because he's old and he did what needed to be done and now he's going home. The many people who are apt to be pissed off about the things Treasury will do over the next couple of years would have no targets. In short, I think he's the only person that can tell the banks to sit down, shut up, and speak when they're spoken to and get away with it.

Summers would be a much better fit at the Fed, where the effects of the Harvard kerfluffle are unimportant. He would certainly have the intellectual creditability needed to restore the Reserve's wrecked reputation/balance sheet. Particularly if we restructure the whole Treasury/Reserve/CEA mess, which I think we need to do.

"This will, I think, turn out to be a much more important job in the Obama-Biden administration than people recognize. Trade agreements are a principal way that we deploy our foreign policy soft power."

If you were going to slot Krugman in, this would be place to put him. The only downside would be his lightening rod status for the right, which might help with the left.

max
['I don't know if he'd want that.']

[Robert Waldmann]

Dakinikat very impressive. Someone has decided that she didn't get through a vetting process
http://www.politico.com/news/stories/1108/15827.html.

[ogmb]

Sorry Brad, but I can't quite follow your admiration for Laura Tyson. As Haas School Dean she was pretty much ineffective and infamously inaccessible, and certainly trumped by both of her successors. Her biggest qualification is that she's the typical Beltway power player and she spent the last eight years visibly in a holding pattern waiting for the next Democratic administration. If that's what Obama is looking for she might be the perfect pick, but I certainly hope he's more interested in substance than glitz.

[knut wicksell]

Not Warren Buffett! My retirement life-style is in his hands. I want is huge brain completely focused on Berkshire Hathaway. The public be deamned! (I think some financier said that. I don't remember who.)

[knut wicksell]

If Volcker comes in maybe he'd bring back Ted Truman for the international stuff. Ted's getting on (aren't we all?), but he makes the trains run on time.

[davek]

what are all these leeks doing in the administration?

if the government is going to make me cry as much as usual, we'll need a few more onions...

[Ken Houghton]

Making vichysoisse, eh?

Barkley: I suggested Corzine for Treasury, noting that it would be "win-win" for NJ, but I didn't assume anyone else would take Paulson's predecessor being Paulson's successor as A Good Idea. If they are, then "thin" is a very generous description of the bench.

If you're willing to count Corzine under the "it was more than five years ago that he got rich off the market" reasoning, then John Reed is still around.

[Sash]

Paul Krugman provides us with yet another reason to be skeptical of Summers at treasury. Again, I don’t really care if a lot of smart people made the same mistake or could have made the same mistake. Its just not worthwhile having to explain why this is the right guy for the job. http://krugman.blogs.nytimes.com/2008/11/20/california-energy-memories/

[LindaK]

In response to ogmb's attack on Laura Tyson: "Her biggest qualification is that she's the typical Beltway power player and she spent the last eight years visibly in a holding pattern waiting for the next Democratic administration." Oops, sounds like sour grapes to me. Tyson has an incredible record working for the Clinton administration; she helped shepherd in rapid growth, low inflation, and balancing the budget as his advisor. Since then she has served as Dean of both the Haas Business School at UC Berkeley and the London Business School, she serves on the boards of numerous corporations, she is on the faculty at Haas, she recently edited the Global Gender Gap Report for the World Economic Forum, she gives clear and thoughtful analyses of economic events in speeches and media interviews, and on and on. And "infamously inaccessible"? Laura is one of the warmest, most helpful economists there is. Sorry ogmb, you are way off base. Tyson is extremely intelligent, experienced and she works very effectively with people. Obama is making a big mistake if he doesn't tap Tyson.