Only days after the election, Barack Obama and his advisers appear to be wasting little time in dealing with the economic crisis that faces our country:
Nov. 6 (Bloomberg) — President-elect Barack Obama will meet tomorrow with his economic advisory group, a team that includes billionaire investor Warren Buffett, ex-Commerce Secretary William Daley and former Federal Reserve Chairman Paul Volcker.
After the meeting in Chicago, Obama will hold his first press conference since winning the U.S. presidential election on Nov. 4, according to a statement from his transition team. Vice President-elect Joe Biden will also attend.
As Obama builds-out his cabinet, all the world markets will watch one key position.
The market is looking closely at who Obama will name as Treasury Secretary. Top candidates for the job included Timothy Geithner, president of the Federal Reserve Bank of New York, Summers and Volcker.
A Reuters poll of economists found 26 of 48 respondents thought Geithner would be chosen for the job, while Summers came second with 14 votes.
Whoever takes the Treasury job will guide the $700 billion economic bailout package and the regulatory reform needed to prevent a repeat of the current crisis.
While it appears that Summers may be one of the two leading candidates, he may not sit all that well with the left side of the Democratic party:
His experience, however, has a downside for a campaign that sold Americans on a message of change. In the Clinton administration, Summers was a major proponent of free trade, deregulation and free market-oriented policies, which have come under fire in recent months as the economy has spiraled downward.
But even former critics note that in the seven years since he’s left government, Summers has taken a more progressive stance on economic issues. In a regular Financial Times column, he’s pushed for greater financial regulation, restrictions on trade and closing the income gap.
“He didn’t understand that stuff five years ago, but he does now,” said a liberal economist and distant Obama adviser. “A lot of times you have the Greenspan problem, where you get to a point in your economic life and you can’t evolve even if the data tells you too.”
I like the sound of the free-market approach and am a little bit scared by the, “He didn’t understand that stuff five years ago” statement. Didn’t understand what? The need for more government oversight in the market? That will not make Wall Street happy.
What about Geither?
Geithner, who like Obama is only 47 years old, has demonstrated ability to handle a crisis, said economists close the transition. And a confidante of Treasury Secretary Henry Paulson, Geithner been at the very center of the government’s fast-evolving response to the financial crisis, chairing meetings at his New York office.
He began sounding the alarm about risks associated with lacking federal oversight over complex financial products years before the current crisis. In 2005, at his urging, financial services companies established a national registry to help process and track their trades of credit derivatives, an insurance-like product bought by financial services companies to cover risky subprime mortgage investments.
What a mess we are in. Hopefully, one of these two will be the correct choice to get things back on line and moving forward again.