Friday, November 07, 2008

What will be Obama's first big move on the economic front?

At least it is clear that Barack Obama has a "pantheon" on economic advisers, and he has promised to "confront this economic crisis head-on", but the big question is what his first big move will be. Sure, he needs to appoint a Treasury secretary. Sure, he needs to appoint a council of economic advisers (although he temporarily has his current "transition economic advisory board.") But what is he/they actually going to do?

Of course, he could simply sit back and watch as Ben and Hank continue to work their financial magic for the next two and a half months.

He could also decide to keep Paulson at Treasury for an extended transition period, say through March. I am now thinking that this would be a best bet.

Ultimately, the first question is whether Barack believes that the current bailout effort at Treasury is consistent with the direction he will want to head on inauguration day. To date, he seems to agree would the rough outlines of Treasury's financial bailout, but as he digs in further I am sure that he will refine his approach. The question is whether he will simply make a relatively minor midcourse correction or seek to radically revamp the entire bailout scheme, or something in the middle. I suspect the latter, but maybe the priority is to get the new fiscal stimulus package put together and underway, and then go back and tinker with Treasury.

For reference, read the transcript of Obama's first press conference after meeting with his transition economic advisers. It is a great counterpoint to his election-night speech. In it he says:

... we've lost nearly 1.2 million jobs this year, and more than 10 million Americans are now unemployed. Tens of millions of families are struggling to figure out how to pay the bills and stay in their homes. Their stories are an urgent reminder that we are facing the greatest economic challenge of our lifetime, and we're going to have to act swiftly to resolve it.

I am still wondering exactly what timeframe he considers "swiftly."

-- Jack Krupansky


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