I agree with Randy's observation about Obama's need to quiet markets during the transition period. From what I have read, however, I think he is willing to consider a wide range of viewpoints about the economy and perhaps would consider more radical policy measures if economic conditions do not improve. Moreover, some of you may recall that FDR made speeches during the 1932 campaign castigating Hoover for increasing federal spending and not balancing the budget while listening to (and planning to act on) much different advice from Rexford Tugwell, Raymond Moley, and Adolf Berle behind the scenes. I don't think it would be speculative to think that there are "public face" advisors who are familiar to the public (and Wall Street), and other more obscure thinkers who may become more influential if things keep spinning out of control.

Dave Zalewski


-----Original Message-----
From: AFEEMAIL Discussion List on behalf of Wray, Randall
Sent: Sat 11/8/2008 5:06 PM
To: [log in to unmask]
Subject: Re: [AFEEMAIL] Obama's Transition Economic Advisory Board--more of the same?
 
james and john: directly related to the oversight of galbraith, here is his take on appointments for those who missed the broadcast:
Some radio comments on the prospective Treasury appointment,
financial policy issues, and with a few savage comments on the Bush team at
the end:

http://www.theworld.org/pod/blogs/eaglehill/galbraith_110708.mp3 <https://e2k.exchange.umkc.edu/exchweb/bin/redir.asp?URL=http://www.theworld.org/pod/blogs/eaglehill/galbraith_110708.mp3> 

The site where it's posted is here:

http://matthewjbell.wordpress.com/2008/11/07/obamas-first-news-conference/


Yes it is easy but certainly not unexpected to be disappointed by the transition team. There is a strong belief that mkts need to be soothed by familiar names. Remember, Obama has been called a socialist all through the campaign. He's going to get pretty mainstream advice from this team, altho i'm sure all of you have heard some pretty sensible things from Reich and even occasionally from Summers recently. Some of the advice will be pragmatic, not ideological (the point Jamie makes).
 
On the post manufacturing society: I think this crisis is going to lead to a much smaller financial sector--a good thing (altho we won't be so happy with our remaining pensions). As a percent of the economy and especially of employment, manufacturing will never come back--it will decline as has agriculture. Both will remain important in other respects. I remain unconvinced that is a bad thing. I'm not sure the transition team would be improved by adding the CEOs that have run american auto manufacturing into the ground and who now ask for hand-outs. I'd rather see labor on the team.
 
I used to always joke that within a few decades we'd all be working in services, either as educators or selling insurance to one another. Turns out we all have been selling insurance in the form of credit default swaps through our pension funds and other managed money. For once, my projection came true earlier than expected. However, it isn't going to be pretty as the black hole of CDSs sucks the financial wealth right out of the economy.
 
L. Randall Wray 
Research Director
Center for Full Employment and Price Stability
211 Haag Hall, Department of Economics
5120 Rockhill Road
Kansas City, MO 64110-2499
and
Senior Scholar 
Levy Economics Institute
Blithewood
Bard College
Annandale-on-Hudson, NY 12504

________________________________

From: AFEEMAIL Discussion List on behalf of James Cypher
Sent: Sat 11/8/2008 2:01 PM
To: [log in to unmask]
Subject: Re: [AFEEMAIL] Obama's Transition Economic Advisory Board--more of the same?



Dar AFEE Colleagues,  

 Another point worth making regarding the transition team is the near
complete absence of any presence from the manufacturing sector.  Aside
from the modest manufacturing role of Xerox (which probably
subcontracts to Asia for most hardware produced) there is zero
participation by firms that require technological mastery and
innovative change while operating in the industrial sector.  There is
zero participation from labor, particularly from the industrial
unions. 

  Finance and services are well-represented along with attorneys and
the political class.  It takes little effort to see on which side of
Veblen's dichotomy we find the forthcoming administration at this
moment. 

   Unless you agree with those who promise a recovery based in a post-
industrial "networked society" of "brain workers" (Reich's "symbolic
analysts"-- whatever that may mean)the absence of a manufacturing
presence is notable.  

  Further, I agree with John Harvey, James Galbraith's exclusion is
particularly egregious.

James Cypher
[log in to unmask]

----- Original Message -----
From: "John T. Harvey" <[log in to unmask]>
Date: Saturday, November 8, 2008 10:34 am
Subject: Obama's Transition Economic Advisory Board--more of the same?
To: [log in to unmask]

> Dear All,
>
> I hate to be feeling like this in the afterglow of Tuesday's
> election,
> but I saw the list of members of Obama's Transition Economic
> Advisory
> Board and was very disappointed:
>
> DAVID E. BONIOR Academic; former Democratic Congressman from
> Michigan;
> John Edwards's campaign manager.
> WARREN E. BUFFETT Billionaire investor and chairman of Berkshire
> Hathaway; expected to take part by telephone.
> ROEL C. CAMPOS Washington lawyer; former member of the Securities
> and
> Exchange Commission; former broadcasting executive.
> WILLIAM M. DALEY Senior executive at JP Morgan Chase; former
> Commerce
> Secretary; chairman of Al Gore's presidential campaign.
> WILLIAM H. DONALDSON Former chairman of the S.E.C.; long career in
> investment banking, higher education and government.
> ROGER W. FERGUSON Jr. Chief executive of TIAA-CREF, the private
> financial services company; former vice chairman of the Federal
> Reserve.JENNIFER M. GRANHOLM Governor of Michigan.
> ANNE M. MULCAHY Chairwoman and chief executive of Xerox.
> RICHARD D. PARSONS Chairman of Time Warner; former banker.
> PENNY S. PRITZKER Senior executive, Hyatt; national finance
> chairwoman
> for the Obama campaign.
> ROBERT B. REICH Author, academic, former Labor Secretary.
> ROBERT E. RUBIN Chairman of Citigroup; former Treasury Secretary.
> ERIC E. SCHMIDT Chairman and chief executive, Google.
> LAWRENCE H. SUMMERS Economist, academic; former Treasury Secretary.
> LAURA D'ANDREA TYSON Academic; former chairwoman of the
> President's
> Council of Economic Advisors and the National Economic Council.
> ANTONIO R. VILLARAIGOSA Mayor of Los Angeles.
> PAUL A. VOLCKER Former chairman of the Federal Reserve.
>
> I don't know about you, but that doesn't exactly thrill me. I
> guess I'm
> particularly disappointed because I had seem Jamie Galbraith on an
> earlier list (general advisor list, not the Transition Board):
>
> http://econ4obama.blogspot.com/2008/06/obama-economic-advisors-and-
> economic.html
> That gave me real hope for a voice of reason. No such luck.
>
> I guess this gets at our much deeper problem--it doesn't matter
> who gets
> elected. As long as Neoclassical economics is the mainstream, who
> can
> blame candidates, who are not economists themselves, for selecting
> their
> advisors from the roles of AEA members?
>
> What worries me most about the above list is that while I suppose
> we'll
> get a decent short-term stimulus, the measures necessary to
> control the
> forces that lead to capitalism's inherent instability are very
> unlikely
> to be recognized, let alone addressed. How much do you want to bet
> we'll
> get Randy's employer of last resort of out that group above? Or a
> significant limitation of financial market activities? An
> investigation
> of how globalization is reducing real investment and further
> encouraging
> the financialization of the non-financial sector? Again, this
> problem is
> not Obama's doing, but until we get economic advisors who believe
> that
> the very structure of the system is to blame and not some form of
> "interference," then real solutions won't result, just band aids.
> It
> really eats at me that this crisis makes perfect sense to all of
> us and
> fits precisely what our theories would predict, but ain't nobody
> asking
> us. It took a depression for people to listen to Keynes, and then
> they
> misheard him. This time, they are not even listening.
>
> Or is my view here too pessimistic? Maybe you folks know things
> about
> these individuals that I don't? Is Volcker's favorite economist
> Veblen?!
> John
>
> --
> John T. Harvey
> Professor of Economics
> Department of Economics
> TCU Box 298510
> Texas Christian University
> Fort Worth, Texas 76129
>
> home: (817)924-9016
> office: (817)257-7230
>
> http://www.econ.tcu.edu/Harvey.html
>