Obama’s Economic Circle Keeps Tensions Simmering

Star news Online ^ | Jackie Calmes

[CutePuppy]

WASHINGTON — President Obama was getting his daily economic briefing one recent morning when a fly distracted him. The president swatted and missed, just as the pest buzzed near the shoes of Lawrence H. Summers, the chief White House economic adviser. “Couldn’t you aim a little higher?” deadpanned Christina D. Romer, the chairwoman of the Council of Economic Advisers.

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By all accounts, much of the tension derives from the president’s choice of the brilliant but sometimes supercilious Mr. Summers to be the director of the National Economic Council, making him the policy impresario of the team. The widespread assumption, from Washington to Wall Street, was that the job would be Mr. Summers’s way station until the president could name him chairman of the Federal Reserve when Ben S. Bernanke’s term expires early next year.

But Mr. Bernanke’s aggressive response to the crisis has so improved his reputation that people close to Mr. Obama increasingly suggest the president could well reappoint him in the interests of financial stability — just as Presidents Ronald Reagan and Bill Clinton retained Fed chiefs who had been picked by predecessors of the other party.

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Few issues have been as contentious as the effort to overhaul the bank bailout program. Mr. Summers left some colleagues believing that he favored nationalizing some big banks, as many liberals wanted. Insiders say that Mr. Geithner would counter that nationalizing banks might sound appealing politically but where would the government get the legions of bank managers it would need? And what would be the exit strategy?

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“Nationalization is a term that has become meaningless because people use it in different ways,” he [Summers] said. “I certainly favored identifying every possibility and presenting every option to the president in response to possible contingencies.”

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[CutePuppy]

Many details on one "team of rivals" that Obama cobbled together in several departments - economic, foreign policy, defense etc.

[Da Coyote]

There should be tensions on his economic team. They’ve all bid all that they’re worth for a clue, and not one clue has appeared.

[cbkaty]