“While market outcomes may be efficient, they may be profoundly unfair, and there’s a need for government to do things to redress the balance,” he said in an interview with Portfolio.com. “A market system can only work within a broader legal framework that only government can establish.”
Mr. Obama, during the Nov. 24 news conference naming Mr. Summers to his position, called the 54-year old economist — who at 28 became the youngest tenured professor at Harvard — “one of the great economic minds of our time.”
Mr. Summers, said the president-elect, will be “playing the critical role of coordinating my administration’s economic policy in the White House.”
“I will rely heavily on his advice as we navigate the uncharted waters of this economic crisis,” Mr. Obama said.
Sheryl Sandberg, Mr. Summer’s former chief of staff at Treasury who is now chief operating officer at Facebook Inc., said there is “no one better suited” for the role of coordinating economic policy.
“He welcomes honest discussion and debate. He likes the intellectual rigor of seeing every side of an argument,” Ms. Sandberg said in a phone interview.
“In these really tough economic times, we as a country need to make sure we are making the right decisions, and the best way to do that is to have someone with his kind of intellectual firepower responsible for figuring this out.”
Vincent R. Reinhart, a former high-ranking official at the Fed, said that Mr. Summers could end up being the spark plug on an Obama economic team that will not be lacking in large personalities and egos.
“If he’s the one generating ideas, he could be very influential and powerful,” Mr. Reinhart said.
Mr. Reinhart said he views much of the rest of the economic team named by Mr. Obama as “insulation around the current of the economic policy generated by Summers.”
“It looks like, from the outside, that it’s Summers’ job to generate the ideas, Geithner’s job to package them in a form that the public and Congress would find acceptable, [Council of Economic Advisers Chairman] Christina Romer’s job to put that proposal in perspective, and then Paul Volcker is the check on the process to make sure nobody gets too carried away.”
Mr. Volcker, a former Fed chairman under Presidents Carter and Reagan, will chair the Economic Recovery Advisory Board created by Mr. Obama. The Obama transition team would not comment on whether Mr. Summers will participate in meetings of Mr. Volcker’s board.
The current financial challenge facing the Obama team will require it to make tough decisions on the size and shape of a stimulus package and on future regulation of financial markets.
In addition to all that, there is a mountain of other issues to tackle.
Mr. Summers and the rest will be tasked with figuring out the best way to pay for the tax refunds Mr. Obama wants to give to more Americans and for his goal of creating a universal health care system. They’ll need to weigh in on the most sensible way to design a carbon emissions cap-and-trade system.