How Will Obama Harness Powerful Economic Team?

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Obama Names Volcker to Head New Econ Advisers

President-elect Barack Obama chose former Federal Reserve Chairman Paul Volcker Wednesday to head a new White House panel to help create jobs and bring stability to the ailing financial system.

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In an Obama administration, key decisions will be slowed down with more minds debating each move. And Geithner is unlikely to receive the same unbridled authority as Paulson, with Summers sitting at the president's ear.

Volcker, 81, meanwhile, adds an elder statesman to Obama's team, but his position is not expected to carry as much weight as the NEC or CEA in the White House. A Democrat who was appointed Fed chairman in 1979 by President Jimmy Carter and reappointed in 1983 by President Ronald Reagan, Volcker has long been credited with stamping out the era's high inflation. He may provide Obama with alternate views, as the only leader within the new team who was not a disciple of Robert E. Rubin, President Bill Clinton's Treasury secretary.

"Not only does this get Volcker -- who the markets love -- inside the tent, it allows for discussions to take place without agency [and] department politics," said Stan Collender, a federal budget expert and the managing director of Qorvis Communications, a public relations firm. "It also rents some of Volcker's credibility until the president-elect can further establish some of his own."

Obama's collection of intellectual firepower is drawing comparisons to John F. Kennedy's "the best and the brightest" and the "brain trust" of academics assembled by Franklin D. Roosevelt. But some see a more recent parallel: Bush's national security team. Vice President Cheney, Donald H. Rumsfeld, Colin L. Powell and Condoleezza Rice also formed a high-octane nucleus, only to see rifts emerge over the Iraq war.

Andrew H. Card Jr., Bush's first chief of staff, rejected the notion that the Bush team had suffered from a clash of heavyweights, saying the team had been hit by unforeseen challenges, notably the attacks of Sept. 11, 2001, and that the Bush Cabinet has shaped up as relatively stable. "I'm impressed with the team [Obama] is attracting, but I don't think it's significantly better than teams" of the past, he said.

James P. Pfiffner, a George Mason University professor and author of "The Strategic Presidency," said Obama might manage the team more skillfully than Bush because he is a better listener. "It's important for the president to have a broad range of alternative perspectives, but he has to be strong enough not to be threatened by people that he doesn't agree with," he said.

Some liberal observers worry that Obama's team will suffer from too little disagreement, given that so much of the team is linked with Rubin, who pushed for financial deregulation in the 1990s. These critics also acknowledge Summers's expertise but say he pushed for deregulation as Treasury secretary, expressed few concerns about the housing and asset bubbles, and only recently has adopted a more aggressive stance on income inequality.

Robert Kuttner, co-founder of the American Prospect magazine, said he hoped that Obama would assert his own instincts. "Where's the diversity on the economic team? It's not only all from the same small club, but from the club that brought us the deregulation that has a lot to do with the economic collapse," he said. "He's going to have to be bolder than many of his advisers if he wants to not fail."