Saturday, November 22, 2008

Obama steps up, signals ambitious but responsible economic plans

Apparently responding to deteriorating markets amidst growing gloom and a vacuum of leadership during the interregnum, on Friday, President-elect Obama leaked his choice of New York Fed President Timothy F. Geithner to be Secretary of the Treasury. On Saturday, he devoted his radio speech to signal that come January, he'll roll out "a vast stimulus plan" -- "a far more ambitious plan of spending and tax cuts than anything he outlined on the campaign trail."

On Monday, he's expected to announce Geithner's appointment formally along with the rest of his economic policy team. The team is said to include former Treasury Secretary Lawrence H. Summers in a senior White House position (with the possibility that he would succeed Fed Chairman Ben Bernanke at the end of Bernanke's term). It also will include Peter R. Orszag as Budget Director.

All three men are experienced economic hands, veterans of high office in the Clinton years, and close to Clinton financial guru Robert Rubin. Geithner is especially well positioned to begin work right now on shaping the urgent Treasury policies that will affect the nation for a long time to come. In his role at the New York Fed, he's already one of the three key officials (along with Treasury Secretary Paulsen and Bernanke) charting emergency federal actions.

Obama has made clear that he will go big after Inauguration with huge stimulus initiatives aimed at averting a further meltdown and driving long-term growth. At the same time, he's eliminated any doubt that, at least in the critical economic sphere, he intends to govern responsibly -- from the center -- with the help of smart, pragmatic people.

Good for him.

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