Summers vs. Goolsbee
By David Henderson
President Obama was getting his daily economic briefing one recent morning when a fly distracted him. The president swatted and missed, just as the pest buzzed near the shoes of Lawrence H. Summers, the chief White House economic adviser. “Couldn’t you aim a little higher?” deadpanned Christina D. Romer, the chairwoman of the Council of Economic Advisers.
Mrs. Romer was joking, she said in an interview, adding, “There are only a few times that I felt like smacking Larry.” Yet few laughed in the president’s presence.
This is from “Obama’s Economic Circle Keeps Tensions High.”
The whole thing is worth reading. Particularly interesting is its answer to a question I had wondered about: where were Obama’s economic advisers on the issue of bailing out Chrysler? I had hoped that at least some of them were against it. Clearly, one was: Austan Goolsbee. The article continues:
Mr. Summers, along with Mr. Geithner and the political advisers, favored giving Chrysler a second chance. “My judgment, and Tim’s judgment, was that given all the equities involved, and given the potentially traumatic effects on confidence, that it was much better to try to save Chrysler if a reasonable merger agreement could be reached,” he said.
Mr. Goolsbee argued that rescuing the financial system was one thing, since credit is the economy’s lifeblood, but the government should not run an auto company. Saving Chrysler, he added, could further harm General Motors, which stood to gain market share.
The arguments became so heated that Mr. Summers stormed from one meeting, a witness said. While he later included Mr. Goolsbee’s objections in a memorandum for Mr. Obama, he excluded Mr. Goolsbee from the decisive meeting with the president.
H/T to Brian Mack.