Obama's Economists Need to Be Near Perfect
If confirmed this week, Geithner will assume the role of Treasury secretary from Henry Paulson, one of the major architects of the mammoth $700 billion Troubled Asset Relief Program, or TARP. Paulson, the former CEO of Goldman Sachs (GS), has taken a beating in the media due to many of his decisions in 2008, so his replacement will likely be given considerable leeway at least in the early going. The market was certainly initially impressed by the Geithner nomination, and the major stock indices rallied sharply after Obama named him as his pick for Treasury.
"Henry Paulson, someone with his resume, wouldn't even be nominated in this environment," said Williams. "Paulson is an insider on Wall Street and that isn't need in Washington right now. The reality is that we're moving back to a Keynesian environment."
Both Williams and Joseph LaVorgna, managing director and chief U.S. economist with Deutsche Bank, say that a major fault that Paulson and Fed Chairman Ben Bernanke have is the inability disseminate information clearly and advise effectively, something that should be fixed under the Obama administration.
"The ability to truly communicate effectively was absent under the Bush administration," Williams said. "The market felt
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