Anybody know WTF is going on with this article.
Summers, who is widely acknowledged to be seeking the top Treasury post, has a strong connection to the Obama team and a long history of government service.
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In the Clinton administration, Summers was a major proponent of free trade, deregulation and free-market-oriented policies, which have come under fire in recent months as the economy has spiraled downward.
Geithner ... a confidant of Treasury Secretary Henry Paulson, Geithner been at the very center of the government’s fast-evolving response to the financial crisis, chairing meetings at his New York office.
There is a possibility on the Economic Transition Advisers that would be a little more acceptable
Laura Tyson (Haas School of Business, University of California, Berkeley; Former Chairman, National Economic Council, 1995-1996; Former Chairman, President's Council of Economic Advisors, 1993-1995)
More on her below...
From an interview in 2006
TYSON: My worry about the trade deficit is that to the extent it has been driven by a set of policy choices in the U.S., we've put ourselves in an unnecessarily risky situation.
We didn't have to get this far. We got this far in terms of depending upon the rest of the world to provide us with savings. They have been quite wiling to do it so far. But you put yourself in a situation of greater risk. The larger the imbalance, the greater the risk that you don't get the nice gradual scenario.
The other thing that I wanted to say about trade deficit gets back to the politics. Glenn and I would certainly agree that a very disturbing development both in the U.S. and Europe is the increasing spread of anti-globalization sentiments. When you have a trade deficit as large as we have, it just becomes a trigger for unleashing those kinds of sentiments.
HUBBARD: The issue in fighting those protectionist sentiments is to go at something we started talking about at the beginning of the conversation: How do you address ordinary people's fears of job loss. You're never going to win the protectionism battle quoting academic treatises.
On the policy, I'd be careful because a Fed study concluded there was very little link between the budget deficit run recently and the current account deficit. And the one policy that was linked to the rising current account deficit was the Federal Reserve's deliberate attempt to reflate the housing market. That was a deliberate policy gambit that I would argue has paid off pretty well. So yes, policy had something to do with it but it wasn't a mistake.
FORTUNE: What are the consequences of a rising protectionist tide to the global economy?
HUBBARD: Part of the reason I am a big supporter of free trade isn't just the standard economist's homily that free trade increases the consumption possibilities of everybody - although that's true and it's important.
There is increasing evidence that this productivity growth that we all started the conversation celebrating is driven in part by great foreign competition that forces a search for the most efficient technologies and investment. We run the risk of losing that and losing the dynamism that frankly is creating a lot of new jobs.
Remember, in the past quarter century, the U.S. isn't just the high-growth economy, it's actually the high-job-creator economy as well. So productivity growth and job creation don't have to be the enemy of one another. What I would say to people is one thing that's uncomfortable and I wish I knew how to say it better and another that I know how to say well but no politician seems interested in hearing.
The first is, we economists can't tell what the next big thing is, but we can say the American economy has come up with it again and again. If we encourage that, and step out of the way of barriers to it, I think we will see substantial innovation that creates jobs.
The more comforting thing has to do with the message of more individually directed training and support for new careers. That I think many economists, conservative or liberal, would agree on.
TYSON: I agree with the notion that international competition fosters innovation and productivity. I think the problem for us is that technology and global competition has played out in a way that's encouraged the returns to go towards the very top. I don't see that changing and I do worry a lot about that. Not that I necessarily have a set of policies to propose but I do worry about that because I think when you go and talk to these people you don't really have anything much to offer.
We've shifted the global labor supply situation significantly in the past 20 years, particularly in the past ten. And that is working to the disadvantage of a significant number of workers in advanced industrial countries, who essentially were earning a premium because of the market power of the advanced industrial countries.
HUBBARD: Part of the problem here is that there were many workers getting supra-competitive wages. They may have grown to believe that that really was their marginal product. But now with a competitive world it really isn't.
TYSON: Glenn, that's easy for us to say. Maybe it's not affecting our marginal revenue product but if it's affecting most people's, there's the politics, that's the situation. People don't want to hear it. They'll say, 'So what you are saying is that competition from China and India is driving down my wages: See I told you so.'