Thursday, January 29, 2009

Conventional Economic Wisdom (or Foolishness?)

I was just looking up information on Timothy Geithner on Wikipedia. Among other things, it said that he was a protege of Larry Summers, former Treasury Secretary and current head of Obama's National Economic Council in the White House. Summers is, in turn, a protege of Robert Rubin, also former Treasury Secretary and head honcho of Citigroup, one of the financial conglomerate at the very heart of darkness of our financial debacle.

Now, look at this paragraph about Larry Summer's background from Wikipedia:

Born in New Haven, Connecticut, on November 30, 1954, Summers is the son of two economists, Robert Summers and Anita Summers, who are both professors at the University of Pennsylvania, as well as the nephew of two Nobel laureates in economics: Paul Samuelson (sibling of Robert Summers, who, following an older brother's example, changed the family name from Samuelson to Summers) and Kenneth Arrow (Anita Summers's brother). He spent most of his childhood in Penn Valley, Pennsylvania, a suburb of Philadelphia, where he attended Harriton High School.

I kid you not: have you ever seen anything like this? Call it 'economic incest.'

There could not be a more 'conventional' group of economic advisors and leaders around Obama, as in 'conventional wisdom,' than this group of Summers and Geithner, and all their friends and relatives in the 'business.' But isn't it 'conventional wisdom' of the last two or three decades that has led us straight to our current economic debacle? Where is the new thinking going to come from? Not from this group.

I was and am supportive of Obama. But I was concerned during the campaign about his economic team and I get more concerned by the day. He desperately needs some unconventional economic thinkers in his circle. But I sure don't see them.

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