Chair of the President’s Council of Economic Advisers Christina Romer will become the second member of the White House economic team to resign in a few months, according to Reid Wilson. But unlike Peter Orszag, who was reportedly burnt out, Romer is resigning in frustration with the inability to penetrate the inner circle of Larry Summers and Tim Geithner, and reach the President on economic issues. This is a much more revealing resignation.
“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.”
It’s entirely possible this isn’t true. But Wilson has excellent sources, and this fits with what I’ve been hearing about the architecture of the White House economic team.
Romer came from the academic world, and Summers clearly outflanked her from a tactical standpoint in making sure that Obama listened to him directly.
On macroeconomic issues, the policies of this White House have clearly been driven by the axis of Summers and Geithner. Romer’s initial forecast for the stimulus, showing the need for a $1.2 trillion dollar jolt to the economy, was internally overruled. But more than that, the strategies with the banks, with foreclosures, basically with respect to the entire economy reflects the fact that Summers has corraled the White House and isn’t allowing competing information in. Far from a team of rivals, it’s a team with one perspective, on the economic side of things.
Clearly Romer couldn’t take the damage to her economic reputation that the iron fist of Summers was exacting. She didn’t have enough of a voice at the White House. So she quit.
Pretty big deal. Hopefully she’ll speak out.