Obama’s Economic Brain Trust

From John Heilemann's essay at New York Magazine, on Tim Geithner and Larry Summers:

When Obama appointed Geithner and Summers back in November, the reaction in Washington and on Wall Street was the same: first relief and then elation. (The day the news of Geithner’s selection leaked, the Dow rose 6.5 percent.) They were brilliant, experienced, crisis-tested, market-minded but progressive, a kind of economic-policy dream team. Since then, they have worked side by side along with Fed chair Ben Bernanke to quell an economic crisis as monstrous as any since the Great Depression—while formulating an economic agenda as ambitious as any since FDR’s. They’ve unveiled big plans, talked big talk, and crafted and shepherded into law the biggest fiscal-stimulus package in American history.

But Obamanomics represents something even bigger than all that. At a moment when the fundamental precepts of market capitalism and government’s relationship to the economy are up for grabs, the Obamans are attempting nothing less than a redefinition of progressivism, which could alter the terms of political engagement and the ideological balance of power for decades to come. With their budget, they have laid out a vision that, as former Labor secretary Robert Reich puts it, “reverses and repudiates the economic philosophy that has dominated America since 1981.” Obamanomics isn’t merely the end of Reaganomics, in other words. It’s the end of Rubinomics, too.

An agenda this transformative is bound to stir up criticism, and so it has—from the left and the right, Wall Street and Main Street, arch-Establishmentarians and hot-eyed populists in roughly equal measure. The complaints of these factions vary wildly, but they share a point of agreement: that the administration so far has badly mishandled the banking crisis; that it’s dithered, dawdled, and dinked around instead of delivering bold, decisive action. For Obama, confronting this issue poses a vexing dilemma. Saving the banks is the sine qua non for the country’s emergence from its ever-deepening miasma, but in doing so, Obama risks incurring a tsunami of bailout rage. If, on the other hand, he appeals too much to populism, he risks driving elites away. Either outcome could deny him the support he needs for the rest of his agenda. Getting the economics right may be devilishly difficult—but the politics are even trickier, and just as crucial.

I love the understatement: "An agenda this transformative is bound to stir up criticism ..."

You think?

See Michelle Malkin, "Today, hapless, truth-challenged tax cheat Treasury Secretary Tim Geithner officially unveils another $1 trillion magic trick. Instead of letting failed banks fail, we’ll have another desperately massive and massively desperate attempt to prop them up through a 'public private partnership investment program'."

Cartoon Credit: Michael Ramirez. See also, Memeorandum.