Thursday, June 9, 2011

Team of Rivals Geithner

According to this article, Geithner has become Obama most trusted economic advisor. Be very afraid.
Even before the president had been inaugurated, Geithner had been urging him to set a target for the budget deficit that would require shrinking its size to 3 percent of the U.S. economy. At that level, the national debt would eventually become manageable.

“From the earliest moments of the administration and even before, he clearly had a big focus on long-term deficit reduction and making clear, not just to the markets but for the entire economy, that the government is living within its means,” Goolsbee said in an interview.

The economic team went round and round. Geithner would hold his views close, but occasionally he would get frustrated. Once, as Romer pressed for more stimulus spending, Geithner snapped. Stimulus, he told Romer, was “sugar,” and its effect was fleeting. The administration, he urged, needed to focus on long-term economic growth, and the first step was reining in the debt.

Wrong, Romer snapped back. Stimulus is an “antibiotic” for a sick economy, she told Geithner. “It’s not giving a child a lollipop.”

In the end, Obama signed into law only a relatively modest $13 billion jobs program, much less than what was favored by Romer and many other economists in the administration.

“There was this move to exit fiscal stimulus a lot sooner than we should have, and we’ve been playing catch-up ever since,” Romer said in an interview.

Some of Obama’s Democratic allies felt let down. Andrew Stern, former president of the Service Employees International Union, said in an interview that Geithner looks at the world “from his experience, which is predominantly a Wall Street, Treasury, fiscal and monetary policy point of view.”


I thought this passage was telling as well:
Even as Geithner stumbled in his first months, Obama stood by him. And they grew closer, their relationship nurtured by daily meetings and occasional basketball games. “They don’t get worked up when things are going wrong. They don’t get worked up if things are going well,” a senior White House official said.
While I understand it's a bad thing if the President or someone advising him are losing their shit constantly for no reason, I gotta say this worried me quite a bit.

Things are really "going wrong" with the economy.

I think 9% unemployment is something worth "getting worked up" about.


  1. What I got from this article was that if Christina Romer or Larry Summer played basketball, millions more Americans would have jobs right now.

  2. Haha, surprised someone is covering this angle. We need start the rumor that Dean Baker has been training with John Wall this offseason, maybe obama will listen to his thoughts.

  3. Maybe it would be easier to go the other way and teach Scottie Pippen some economics.