Obama’s centrist economic team

All who voted for the other one, and most business executives in general, have been waiting for a sign from the president-elect.

How far left would he lean? Would he go radical? Would he use the economy as an excuse to do a New Deal squared by the Great Society?

MY OPINION: THOMAS OLIVER
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And what about taxes? Would he sock it to the top earners, raise the capital gains tax or leave us with the highest corporate tax in the world?

Magnifying the worry was the belief that the one who won could do just about anything he wanted, given his numbers and a new one-party Congress.

The sound you hear coming from executive suite is a sigh of relief.

President-elect Barack Obama has now nominated his economic team.

Timothy Geithner will become the new Treasury secretary. Lawrence Summers will become director of the National Economic Council, and Christina Romer will chair the Council of Economic Advisers.

These are neither lightweights nor unknowns.

“They are all distinguished. They are intellectual without being pointy-headed, ivory-tower types,” said Emory associate professor of finance Jeffrey A. Rosensweig, who was classmates with Romer at MIT, where they both took classes from Summers as well as Fed Chairman Ben Bernanke.

“Christina, like Bernanke, is a student of the Great Depression, particularly how it happened, how to avoid one or get out of one,” Rosensweig said.

An Emory colleague of a different school of thought, Paul H. Rubin, seemed relieved by the choices. Admitting he didn’t support Obama, he nevertheless said Summers and Romer were first-class choices. “They are very smart centrists,” said the economics professor.

Roger Tutterow, a free-markets economist at Mercer University, echoed Rubin’s centrist sentiments. He went so far as to suggest, “Geithner and Romer could have worked for a Republican administration.”

With these selections, our three local economists believe Obama has clearly signaled that taxes won’t be raised any time soon.

“Obama will not raise any taxes and will go through with his middle-class tax cuts,” Rosensweig said.

Rubin, less sanguine, said at worse Obama will let the Bush tax cuts expire in 2010.

We are, however, likely to get a huge stimulus.

Summers has already said in times of financial crisis, government should not worry about overreacting.

That’s in keeping with basic tenants of the MIT economics department, which believes in free markets, but advocates serious government invention when it’s needed.

“A number of astute economists believe it’s better to overreact than under react when you are on a precipice,” said Rosensweig. Aptly put by an MIT alum.