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Hudson's Bay Has Still Not Completely Frozen Over

Who Should Replace Larry Summers?

From my perspective, the scary thing is that as of now nobody has replaced Larry Summers inside the White House. Either promote Jason Furman to the job, or tell him who he is going to be working for. Keeping your staff positions staffed is the first task of government. It's not rocket science.

Mark Thoma:

Economist's View: Who Should Replace Larry Summers?: Noam Scheiber defends Gene Sperling as "a leading candidate or the leading candidate to replace Larry Summers as head of Obama’s NEC":

Is the Favorite to Replace Larry Summers Too Close To Wall Street?, by Noam Scheiber, TNR: ...Gene Sperling, a counselor to Secretary Tim Geithner,... was director of Bill Clinton’s National Economic Council (NEC) in the late ‘90s, a period when the White House got pretty good marks for its understanding of business and the broader economy. But ... Sperling often speaks up for the little guy in internal deliberations—he was one of the administration wonks most concerned about executive pay, and he argued passionately for saving Chrysler...

Sperling’s record has suddenly become highly relevant because, depending on who you talk to, he’s either a leading candidate or the leading candidate to replace Larry Summers as head of Obama’s NEC. In light of the forgoing, you might also think he’d be a liberal favorite for the job. But Sperling has recently taken some lumps in the Huffington Post for his alleged sympathy for bankers and his ties to former Clinton Treasury Secretary Robert Rubin....

Sperling was NEC director when the Clinton administration ushered in some unfortunate deregulatory changes, pretty much every account I’ve either read or heard from people involved confirms that ... Sperling was a marginal player at best....

What about his instincts when he did work on issues of interest to Wall Street?... Sperling turns out to be the Treasury official who was most influential in helping persuade Geithner to embrace a fee on large financial firms to make the government whole after TARP, the vehicle for its various bailouts. The president unveiled the 10-year, $90 billion fee in January of 2010. Wall Street promptly howled....

Long story short: This hardly strikes me as the profile of a man out to do the banks’ bidding. Sperling may not be the kind of populist who makes the average HuffPo reader swoon. But I doubt his record as a policymaker inspires much chuckling on Wall Street.

I still think a break from the Wall Street connected side of the Clinton administration would have political value. Even better, no matter the choice, would be to show through action that the administration is, in fact, determined to reduce the chances of another meltdown by being tough on the financial sector. But, so far as I can tell, that doesn't seem to be the direction Obama intends to go.

Gene would, I think, be one of many possible excellent choices for NEC Director.

Here's what I wrote about this last November:

Obama's Next NEC Director: At the moment the lead candidates to replace Larry Summers as NEC Director--big shoes to fill--appear to be Roger Altman and Gene Sperling. I think both of them would probably do very well. But there are other people who I think would also be very good. And the professional economist in me wants somebody who thinks more like an economist. I don't think the administration has enough economists in it's top ranks.

So let me throw out a few names of people who would, I think, be as good as Roger and Gene--and who also think more like economists: Alan Blinder, Lael Brainard, Roger Ferguson, Jason Furman, Larry Meyer, and Laura Tyson...

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