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Roundtable on Obama's Economic Team

Roundtable on Obama's Economic Team

FOX News Special Report With Brit Hume - November 24, 2008

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA U.S. PRESIDENT-ELECT: I sought leaders who could offer both sound judgment and fresh thinking, both a depth of experience and a wealth of bold new ideas, and, most of all, who share my fundamental belief that we cannot have a thriving Wall Street without a thriving Main Street.

(END VIDEO CLIP)

HUME: So Barack Obama made it official today that the people you have been hearing about for several days now who are to be the head players on his economic team are, indeed, who we said.

Larry Summers will be the head of his economic policy council in the White House, Tim Geithner, the current head of the New York Fed, will be the Treasury Secretary nominee, and Christine Romer will be the head of the council of economic advisors in the White House.

Some thoughts on all this now from Fred Barnes, Executive Editor of "The Weekly Standard," Morton M. Kondracke, the Executive Editor of "Roll Call," and the syndicated columnist Charles Krauthammer, all are FOX new contributors.

He said they offer a depth of experience, which I think we would all probably agree is the case, a wealth of bold new ideas--Charles, really?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Well, Summers is known as a guy with bold ideas, often impolitic ideas, which is why I think having him in the White House is exactly the right place.

He is a brilliant economist who often engages in thought experiments. I think that will actually appeal to the new president who is intellectually active and curious and nimble. I think it's a great pairing.

And it's good that on the outside, the face of the administration in treasury will be Geithner, who is more of a public face, who is more presentable, and more, I think, reassuring in public--less, eccentrically brilliant and audaciously so, as Summers is, to his own regret.

We know at Harvard he produced a thought experiment in the middle of a speech about women's achievements, and it cost him his job.

So I think it is an excellent team.

Geithner, of course, is the shadow of Paulson. He has been involved in every action over the last eight or nine months. So this is essentially the ultimate in continuity, which is what I think is reassuring the markets.

MORT KONDRACKE, EXECUTIVE EDITOR, "ROLL CALL": Well, and, you know, Obama also said today he was going to get the best minds in America to work on these problems. And, by everybody's acknowledgement, I think, this is about as high of an IQ group as you could possibly assemble.

And they're basically centrist Democrats. Melanie Barnes is a exception who was named today. She is a liberal who used to work on Senator Kennedy's judiciary committee staff.

HUME: She was named to head the domestic policy council, which is obviously important, but will not be the controlling influence on economic policy.

KONDRACKE: He shoehorned in healthcare as part of the solution to our economic problems.

But, fundamentally, it is this team that you have been talking about. And they are basically centrist Democrats. And they believe in Keynesianism.

But they also, as Geithner has been involved, as Charles said, in all of the stuff that Paulson has been doing, and maybe can go beyond what Paulson has been doing. I assume that he will into areas, like mortgage -- bolstering the mortgage market, and so on, which the administration has been reluctant to do.

Another thing they could possibly do is change the mark to market rule, which is causing a cascade of the bad --

HUME: But the Treasury Department can't do that?

KONDRACKE: No, but they should name a SEC Chairman.

HUME: Let's talk about the people he did name-Fred?

FRED BARNES, EXECUTIVE EDITOR, "THE WEEKLY STANDARD": I thought they were pretty impressive.

It's clear who is going to be in charge, and that's Larry Summers. He understood, having been at the Treasury Department, that if you have a strong figure there with the national economic council at the White House, that person will be much stronger than the treasury secretary.

As it turned out when Bob Rubin had that job and Lloyd Benson was the treasury secretary, obviously Rubin was the guy, the biggest economic influence, and then went to Treasury, and Larry Summers succeeded him at Treasury. So Summers is going to be the big guy.

Here is what I was struck about the whole press conference Obama had today, and that was the sense of urgency on his part. All of a sudden this urgency to name these guys to talk about what he is going to do.

I went back and looked at two other things where he talked to the press. One was that press conference three days after the election, and then there was the "60 Minutes" interview a week ago yesterday, and there wasn't that urgency there.

Back in the press conference, he said my transition team will be monitoring the economy. Today he said they will be briefing me on a daily basis about what's going on.

And the other thing that was interesting is he opened the door to not raise taxes on people over $250,000. It's a door that will be --

HUME: Immediately?

BARNES: Well, in the next two years.

HUME: Right.

OBAMA: It will be a door that's very hard to close, particularly when he said in one of these interviews, I think it was the "60 Minute" one, that the deficit doesn't matter next year or even the year after.

So I don't think -- I think he's going to wait for the Bush tax cuts to expire.

HUME: What do you think of this urgency, Charles?

KRAUTHAMMER: What happened in the market last week-on Tuesday Paulson appeared before Congress, and he said I'm only spending half of the money, and I already spent it, so I'm out of here.

The market went nuts. The banks' stocks collapsed in two days, the biggest drop in two days in the S&P since 1933, which was not a good year.

HUME: Percentage drop.

KRAUTHAMMER: Exactly.

And what happened then on Friday, you got a bit of urgency on the part of Obama. He named his secretary, at least it was leaked, which led to a rise in the market, and again today.

What Obama has indicated is that he is going to be working with the Paulson team right now --

HUME: He wouldn't say that.

KRAUTHAMMER: But that's what is understood.

HUME: He did get the bridge to the Paulson team in the person of Geithner.

(CROSSTALK)

KONDRACKE: They were following the FDR model. Remember he said there is one president at a time. There are two presidents now.

BARNES: No, no, there is really only one de facto president and we finally have accepted that, that it's Obama.

He didn't use the excuse that he used before. Twice in that press conference he said there is only one president at a time, and he meant Bush. He didn't say that again.

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