James Pethokoukis

Politics and policy from inside Washington

Replacing Larry Summers …

November 22, 2010

From the White House’s perspective, the ideal replacement for Larry Summers as chief economic brain would be a female chief executive who could reach out to Republicans and the business community without irking liberals. Buzz about the candidacy of Roger Altman, the founder of investment bank Evercore, shows how difficult it may be for President Barack Obama to land that dream candidate.

The only thing more challenging than filling that job spec might be finding another Summers. He’s a brilliant academic and former Treasury Secretary who handled emerging market crises in the 1990s. As director of Obama’s National Economic Council, he’s been less a dispassionate coordinator of policymaking than the president’s maximum economist during a time of extreme financial tumult.

But Obama doesn’t necessarily need a Summers sequel at the halfway point of his presidency. With Republicans flooding Capitol Hill, the final two years of his term likely won’t see many big policy initiatives. Frankly, Obama needs a political symbol that shows Corporate America’s leaders he views them as more than just background staging for photo ops.

Ideally, he’d find that figure outside of Wall Street, which many in his liberal base blame for the economic crisis. Also, given that the Treasury Secretary and chair of the Council of Economic Advisers are now both men, adding a high-profile female to the economic team might be preferable. And just in case the Republicans want to play ball, a reputation as a deficit hawk would be a great kicker.

Two potential choices, and former CEOs, Anne Mulcahy of Xerox and Ann Fudge of Young & Rubicam, either passed or were dropped from the initial shortlist. Fudge seemed a natural – not least because her work on Obama’s debt panel has impressed Republicans. Remaining short-listers have also major drawbacks. Former NEC chair Laura Tyson has no business experience other than serving on the board of Morgan Stanley. Jared Bernstein, the chief economic adviser to Vice President Biden, comes from a union-backed think tank. Moreover, many CEOs privately profess concern about the unglamorous nature of the staff job.

So, by comparison, Altman makes some sense. Although from Wall Street, he’s built a successful mid-sized firm, met a payroll, successfully created wealth and served in President Bill Clinton’s Treasury. He’s also expressed concern about Obama’s relationship with business, most recently in a Wall Street Journal op-ed that read like a NEC job application. Altman may offer one other plus: He’d probably take the gig.

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