05 August 2010

Obama's Economic Advisor Romer Out Over Differences with Larry Summers (and Timmy)

Christina Romer is a fine economist, but she frankly does not have the skillset to deal with accomplished Tidal Basin pond snakes like Larry Summers and his sidekick Tim Geithner.

She is said to have left at her own request. It is nice to see a principled resignation once in a while. Good for her. I hope that is the case. In addition to pushing for more stimulus, I had also heard that Romer was promoting Elizabeth Warren as the head of the new Financial Consumer Protection Agency, a move that is adamantly opposed by Timmy and Larry, the Rubin twins.

If Obama asked her to leave then that should settle all questions about his policy, his relationships with his supporters, and his intentions.

I could not help but wonder if someone is falling on her sword ahead of tomorrow's Jobs Report, or Bernie Madoff's nomination to head the Financial Consumer Protection Agency.

Hotline On Call
Romer To Leave White House
By Kirk Victor
August 5, 2010 5:54 PM

Christina Romer, chairwoman of Pres. Obama's Council of Economic Advisers, has decided to resign, according to a source familiar with her plans.

Romer, an economics professor at the University of California (Berkeley) before taking the key admin post, did not respond to repeated calls to her office.

"She has been frustrated," a source with insight into the WH economics team said. "She doesn't feel that she has a direct line to the president. She would be giving different advice than Larry Summers [director of the National Economic Council], who does have a direct line to the president."

"She is ostensibly the chief economic adviser, but she doesn't seem to be playing that role," the source said. The WH has been pounded for its faulty forecast that unemployment would not top 8% after its economic stimulus proposal passed.

Instead, the jobless rate is 9.5%, after exceeding 10% last year. It was "a horribly inaccurate forecast," said Bert Ely, a banking consultant. "You have to wonder why Summers isn't the one that should be taking the fall. But Larry is a pretty good bureaucratic infighter."

Daily Finance
Is Christina Romer Out as Chief Economic Advisor?

8:00 PM 08/05/10

Christina Romer, a Berkeley economics professor, is reportedly leaving the White House as Chair of President Barack Obama's Council of Economic Advisors, according to the NationalJournal.com, which cites an anonymous source. Is she taking the blame for policies hatched by director of the National Economic Council, Larry Summers -- policies that she disagrees with?

A source told NationalJournal: "She has been frustrated. She doesn't feel that she has a direct line to the President. She would be giving different advice than Larry Summers who does have a direct line to the President."

Romer could be the fall guy for the White House's forecast that unemployment would stay below 8% -- jobless rates blew through the projection to peak at 10.2% in October 2009 and now sit at 9.5%. Whether Romer is responsible for this forecast or not, her resignation would signal that she has taken the blame.

The NationalJournal quotes Bert Ely, a banking consultant: "You have to wonder why Summers isn't the one that should be taking the fall. But Larry is a pretty good bureaucratic infighter."

Far From a Fix

With a Labor Department jobs report coming out tomorrow -- experts predict a loss of 87,000 nonfarm payroll jobs for July 2010 and a boost to 9.6% in the unemployment rate -- the rumor of Romer's resignation could signal that tomorrow's numbers are going to be worse than expected. Regardless, Romer's departure will likely not go far enough to fix the policies that have been keeping the jobless rate so high.

Given Summers' direct line to the President, it's doubtful that Romer's departure will unleash a dramatic improvement in the administration's job-creation strategy.

NY Times
Romer Leaves as Head of Council of Economic Advisers

August 5, 2010, 8:35 pm

Christina D. Romer, the chairwoman of the White House Council of Economic Advisers, will step down from the post next month, the White House announced Thursday night.

Her resignation comes as the Obama administration continues grappling with a choppy economy as it heads into the midterm elections.

The White House said that Ms. Romer was leaving to return to California “where her son will be starting high school in the fall” and that she would be teaching at the University of California at Berkeley.

Mr. Obama issued a statement praising Ms. Romer:
“Christy Romer has provided extraordinary service to me and our country during a time of economic crisis and recovery,” the President said. “The challenges we faced demanded more of Christy than any of her predecessors, and I greatly valued and appreciated her skill, commitment and wise counsel.”

There was no word on Ms. Romer’s successor. As head of the Council, she helps formulate the administration’s economic policy, often meeting daily with the President and his top economic advisers.

Ms. Romer is among the camp of advisers calling for more stimulus measures to boost the ailing economy, a position opposed by those concerned about the growing deficit.