Tuesday, November 16, 2010

Rumor: Roger Altman to Replace Larry Summers at NEC

This is what I wrote in March 2009 about Altman when I learned Altman would interview Treasury Secretary Geithner at a time Geithner was having major PR problems:

Coincidentally, the evening before I had a talk with Altman, at FFI. Altman is as sharp as a whip, but he is really a true gentleman. Whoever is handling Geithner made a perfect choice in Altman as moderator. Altman would never try to embarrass someone in public, and indeed as this FT report shows, Altman actually managed to bail Geithner out of a potential worldwide embarrassment.
Altman is out of the Robert Rubin camp when it comes to concerns about the budget. This is what I wrote about Rubin/Altman, this April:

As Treasury Secretary, Rubin was a key player in the relative conservative budgets coming out of the Clinton Administration. Emphasis on relative. Craig Steiner makes a very strong case that in the Clinton years a surplus was never reached, despite beliefs otherwise. That said, compared to the GW years and the Obama Administration, the deficits under Clinton were pocket change. The credit for this has to go to Rubin, who has always emphasized budget concerns.

Rubin/Altman shouldn't be confused with small government types, they did afterall name their organization the Hamilton Project, not the Jefferson Project. And, as WaPo notes, the group published a paper Tuesday outlining its research agenda. The group, which included Rubin, Altman, Greenstone and Sarah Cannon, argued in advanced Keynesian fashion that a sustainable economic recovery requires a "national investment" in education, more government support for research and development, and a reduction of carbon dioxide emissions to combat global warming.

However, the paper also said that those "investments" must be combined with a serious deficit-reduction effort.

There is obvious conflict between these two goals, but Rubin does have a track record for at least keeping an eye on budgets. I don't see how we are going to get out of the current financial mess without a major nation-rattling financial crisis, but the more influence from the Hamilton Project, given the alternatives surrounding Obama, the better. I am talking realeconomik here and not my ideal way of running a government. We are in the bottom of the ninth and down by 10 runs, with little hope, but at least the batter in the on-deck circle knows how to scramble for a bunt single, whatever good that will do.
It's interesting, Summers was known as abrasive and uncompromising, but in watching him over many interviews in public he simply carried the Obama banner, while at NEC. I don't think he had any impact with Obama on policy. He almost came across from day one as fearful of losing his job. Fight with underlings, sure. But I doubt he challenged Obama.

Altman, if ends up at Treasury will be different. First, he is older (in his 60's), but he also has a bearing that I think is capable of influencing Obama. And, I think that this will cause Obama to focus on the budget.

Again, I don't think Altman is a saviour. He is, for example, a member of the Steering Committee of The Bilderberg Group. He knows how to get his bread buttered. But, on some level, I think he is reasonable and wouldn't attempt to blow up the country for a little more pocket change. There are others that would.

I would much rather have seen him at the Treasury during the heat of the financial crisis than Hank Paulson. And, I would much rather see him at the NEC than a Paul Krugman, Alan Blinder or Robert Reich.

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