Help wanted: one of the leading political administrations in the world seeks to fill senior economic position. Duties include putting an implausible spin on dismal economic conditions. Being skilled at improving actual economic conditions not a requirement. Experience as a corporate CEO preferred.
Sadly, if reports are correct, that seems to be the gist of how the Obama administration is going about filling Larry Summers' soon-to-be vacated seat as the director of the National Economic Council.
According to the New York Times, "News of Mr. Summers's departure set off speculation that Mr. Obama would replace him with a corporate executive to counter the impression that he is antibusiness."
Politico was even more specific: "President Barack Obama's team already knows the ideal candidate to replace him on the National Economic Council -- a woman CEO."
It's hard to know where to begin. Have you ever been having a conversation with somebody -- a long one in which you're really getting into things -- when, suddenly, your friend says something that tells you he actually hasn't heard a word you've said? That's what the administration's reported desire to replace Summers with a CEO is like. After two years of governing a country locked in economic misery, you'd hope that Obama and his economic team would've really listened to the country and learned that what matters isn't the economic team's resume or what "signals are sent" to Wall Street, but the actual state of the actual economy. But apparently not.
It would be nothing less than shocking to find that the president, at this late date in the recession and with the midterms shaping up as they are, is looking out at the economic landscape and concluding that what most needs repairing is his administration's relationship with Wall Street. Really? How about hiring someone who would "send a message" to the 26 million unemployed or underemployed Americans -- with the message being: Help is on the way!
If the person most likely to provide that help happens to be a CEO, great. But expressly looking for a CEO to counter the Wall Street perception that Obama is anti-business is the wrong way to go about the search.
"What Obama really needs is someone who'll do a good job," wrote Matt Yglesias. If the economy is doing well, he adds, "messaging" takes care of itself: "FDR's economic message was very compelling in 1936 because the economy was growing rapidly."
Echoing Yglesias is Paul Krugman. "Obama should pick someone who can do a good job," he writes. "Never mind image, or the message the appointment supposedly sends -- there are about 600 people in this country who care about that stuff, and most of them are paid to care."
TNR's Jonathan Bernstein is even more blunt:
...this is a remarkably stupid plan, if true. It will not 'disarm' critics who say that Obama is reflexively anti-business, any more than having Bob Gates at Defense 'disarmed' critics of Obama's approach to terror... The condition of the economy two years from now will likely be the single most important factor in whether Obama serves a second term or not. That's the actual condition of the economy, not the spin version of it.
And as far as hiring a woman -- hey, I'm all for women and diversity, but given the fact that the middle class is crumbling under the weight of near double-digit unemployment, I'd first like to start with some diversity of vision and economic perspective. That's the element that is sorely lacking in this White House. As a former Treasury official put it in Jonathan Alter's book The Promise, Obama's economic team "ran the gamut from A to C, though hardly to F, much less Z."
Of course, A to C hasn't been working out very well. And I doubt whether that's because of the lack of an E and O tacked onto the C. After all, Carly Fiorina is a female former CEO. While at HP she sent a message that many CEOs and "the Street" often like: the willingness to destroy the lives of thousands of workers in order to maximize profit. Is that what we need being whispered in the president's ear?
I have no doubt that there are plenty of CEOs, male and female, who would be worth appointing. But the key thing, the sine qua non of the new director, should be an ability to truly grasp what this economy is doing to average working Americans. In other words: empathy. Researchers into emotional intelligence talk about an emotional coefficient. If given the choice between someone who runs a company with a high ranking on the Fortune 500 or someone who has a high emotional coefficient, I'd take the latter.
The reason why Elizabeth Warren is now a household name, and was pushed passionately by consumer groups to be the head of the Consumer Financial Protection Bureau, isn't because of her credentials as a professor at Harvard Law School. It's because they realized that Warren truly understands the plight of American workers and families.
Instead of "sending a message to Wall Street," how about sending a message to the three quarters of the country who, according to a new CNN/ORC poll, still believe the economy is in a recession -- despite what The National Bureau of Economic Research says?
It's a message that would make it clear that serious attention is -- finally -- going to be paid to the housing crisis, which shows no signs of ebbing. As the Washington Post writes, it's not just foreclosures that are increasingly dotting the landscape, but short sales as well. Since 2008 alone, short sales have tripled, with 400,000 expected this year. That's not a sign of an economy bouncing back to life.
It's a message that would make it clear that the administration at long last recognizes the growing and shameful level of inequality in our country. As Eric Alterman points out, in the 2000s, median household income fell almost 5 percent. But since 1979, the top 1 percent has raked in 36 percent of household wealth gains. "Approximately 300,000 super-rich Americans gobbled up half as much of the fruits of new wealth produced as 180 million or so American workers," writes Alterman.
In short, if the president really wants to do something for American businesses, and not just the access-loving CEOs who would, naturally, be thrilled to have a friend with a new office in the White House, he should appoint someone whose mission is to reinvigorate America's middle class. A thriving, working, spending middle class is much better for a business than having its CEO know somebody who has an office close to the president's.
Communicating that he understands the hardships being experienced by millions of struggling Americans has, surprisingly, not been one of the many gifts of our gifted president. Changing that, instead of worrying about improving his relationship with Wall Street, will help determine the fate of the middle class -- and, incidentally, whether he gets a second term.
That's the message his pick to replace Larry Summers needs to send.