Obviously the pundits expect Obama to select an "experienced and respected" hand. Obama should rush neither selecting an economic team nor defining his prescription for the economy. The great danger for a President-Elect is approving policies enacted during the remainder of the outgoing President's term. Obama will be tarred with the departing administration's failures. Should any succeed, the GOP will claim the success and tie that success to demands that Obama adopt a GOP agenda.

Hopefully, Obama will continue to talk to a number of advisors and be content to have those advisors express their thoughts publicly. If Obama selects an economic team during the week after his inauguration and then begins to define his prescription for the economy, he alone will be in charge.

Dean,

If you could, tell us who are the policy practioners that you would like to be considered as potential candidates.

Almost all the experienced policy-makers have failed to see the bubbles. Who else left?

College professors?

You can pretty much come to the same conclusion regarding every person with whom Mr. Obama is meeting with today...

"Why do we think that his brilliance will lead him to choose the best policies to get us out of it?"

I can answer that one.

'We' don't think that. Nobody thinks that. 'We' didn't pick him though. So the question is silly.

The right question is "What do Obama and his bosses(!) expect from someone [Summers] whose 'brilliance did not prevent him from supporting the policies that got us into this mess?'"

Now that we've framed the question sensibly we can answer it.
They expect 1) that he will continue to support policies primarily designed to enrich power, and 2) that the trope of his 'brilliance' will stifle any opposition from the proles.

1) is a good bet based on on Summer's track record.

And 2), while of manifestly lesser importance [to the bosses], is also a given, particularly in these times of "C'mon, give Obama a chance man, he hasn't even gotten into office yet."

You'd think whoever would try and loot the treasury. Don't worry, it has already been looted. There's nothing left.

Whether or not Lawrence Summers is brilliant is not something I can judge. What I can judge is that he has worked in the interests of finance capital, and that when those interests have not benefited the people of this country, he has chosen for finance capital.

The question should not be whether or not the guy is brilliant, but whose interests he represents. And we already know the answer to that question.

It should also be noted that Nancy Pelosi's support for Summers is no surprise. When she was elected to the House, she lobbied hard for a seat on the House Banking Committee, as that was where the money was. So far as I can see, she's never done anything that was not in the interests of Wall Street. Supporting Summers is just one decision among many.

Dr. Baker,

A few questions:

1 Any chance that you'll work in the Obama Administration, either as on staff, or as an outside advisor/consultant.

As you often say, it would be great if at least 1 actual competent economist, who called the housing bubble in correctly, could be involved in shaping economic policy.

2 Any realistic chance that Obama will implement any of the policy suggestions in your "Conservative Nanny State" book? Perhaps you could write an article about this topic.

Dean. We live in a time when it's not easy to speak truth to power, on either side of the aisle. IMO this makes YOUR observations & analysis that much MORE valuable. Keep up the great work, times WILL change.

I cannot really disagree that the Larry Summers the late 1990s and early 2000s who ushered China into the WTO and did nothing to prevent China from joining Japan in playing currency games with the dollar for a one sided mercantilism would be a disappointing choice for Treasury. But apparently about mid-decade, he, along with Alan Blinder and Paul Krugman (earlier for Krugman) had a road to Damascus moment. If we can't get Dean, Calculated Risk, Nouriel Roubini, or Yves Smith as our economic team, at least Summers now appwars to read your blogs. See http://www.nakedcapitalism.com/2007/03/larry-summers-grim-view-of-housing-and.html. we could do worse.

Summers wouldn't please me, but he'd be better than someone from one of the banks that created this mess - Rubin, Dimon, Corzine, etc.

I'd really what Obama to choose someone who isn't part of the Harvard-Wall Street-Federal Reserve Axis of Casino Capitalism. But who that person might be I don't know.

In addition to getting us out of this mess, how about recommendations for ensuring that we don't get back into a similar bubble-mess?

I just listened to Obama's press conference, and no one asked "What was the cause of the bubbles and what will you do to ensure that they do not recur?

For example ... require a 20% down payment ...

Word is already starting to leak out that Obama has a 'spine of steel'. This is a guy who fought and overcame extraordinary odds to get where he is. So you can bet that whoever he chooses for such an important job, it will be someone not only highly competent, but more importantly someone he absolutely trusts and whom it will be clear to that Obama is without question the boss!!

When I'm president Dean Baker will be my top choice for advisor on economic policy. Purely on the basis of his job performance to date, which has been outstanding.

Dean,

You should be cross posting your information on bad punditry on a site like MEDIA MATTERS. There really should be a site called They Were Wrong or Dustbin of History (or to that effect) where all the bad predictions can be duly noted for posterity.

Cheers
PEtruk

A friend sent me a 1933 reprint of "Other People's Money: And How the Bankers Use It" by Louis D. Brandeis with a Preface by Norman Hapgood. The original publication was in 1914, before Wilson appointed Brandeis to SCOTUS. The reprint has a 1932 Foreword by Hapgood that somewhat summarizes Brandeis' career. In preparing the Foreward, Hapgood questioned bankers about the depression. One of them responded: "We learned nothing from the 1929 breakdown. Perhaps in twenty-five years, we shall plunge into another, so much worse that we shall then be compelled to realize our plight and act accordingly.

"I do no think the bankers can be blamed alone. They responded to the pressure of the public. Nobody desired sound investments at a low return. All were looking to grow rich quickly. The more conservative the methods of a banking institution, the less its business grew, while it saw clients flocking to those houses that promised sudden gain."

Dean, Jean is right. You are from Chicago and you belong in that cabinet, or as they are saying now "team.
Keep up the great work.
Barbara

Did you read the L.A. Times story that you criticize? It says that Larry Summers is very smart--which he is. It also says that he has set off one controversy after another--which he has. It questions whether that's really what's needed in a Treasury secretary at this moment. I should know; I wrote the story.

Peter Gosselin wrote, It also says that he has set off one controversy after another--which he has. It questions whether that's really what's needed in a Treasury secretary at this moment.

Yes, but you put in almost no detail about how Summers was actually wrong on the economic policy issues that Dean refers to above.

Come on Peter, near the end the article says:

"As the financial world melted down this fall, those planning for a possible Obama administration became increasingly interested in finding a candidate for Treasury secretary who was steeped in the markets, experienced in crisis management and not implicated in the problem."

This certainly makes it look like Summers has a proven track record of being on top of things when the reality is that he completely missed the housing bubble and the ensuing credit collapse.

The article does raise some reasonable questions but it leaves intact the idea that Summers has an enviable track record in dealing with key economic issues. He doesn't.

Peter Gosselin, If Larry Summers IS really smart, I wonder why he moved from MIT to Harvard to complete his doctoral work?

Brooksley Born or someone like her (e.g. Dean Baker) should have been asked to be on Obama's team (she's no older than Volcker).

This is a guy who fought and overcame extraordinary odds to get where he is. So you can bet that whoever he chooses for such an important job, it will be someone not only highly competent, but more importantly someone he absolutely trusts and whom it will be clear to that Obama is without question the boss!