Filling a vacuum

Our view: President-elect Obama's nominees for his economic rescue team show his intent to begin work immediately on a stimulus plan when he takes office

November 25, 2008

President Bush may still sit in the Oval Office, but President-elect Barack Obama left no doubt yesterday that he and his new economic team would take the lead in charting a new course to grapple with a continuing economic crisis of historic proportions.

Mr. Obama was right to announce as his first major appointees his key players on the economy and order Timothy F. Geithner, his nominee for Treasury secretary, and Lawrence H. Summers, his pick to lead the White House Economic Council, to start now preparing a massive stimulus plan to jolt the economy out of its downward spiral.

The dangers of a leadership vacuum in the weeks remaining until Mr. Obama is sworn in Jan. 20 were spotlighted last week, with a steep decline of stock values; the threatened failure of Citigroup, the global banking giant; and a succession of frightening economic indicators, including an 18-year high in unemployment claims and a continued drop in real estate prices.

But the president-elect filled the vacuum and inspired confidence with a briskly paced introduction of his economic team and a sharp overview of the troubled economy and how he intended to meet its challenges. Wall Street responded enthusiastically as stock prices climbed nearly 5 percent.

Mr. Obama said his aim is to get credit flowing again, attack the nation's home foreclosure crisis, provide help for the domestic auto industry, save or create 2.5 million jobs and build a new clean-energy infrastructure to power the nation in coming decades - no small task.

The president-elect agreed with congressional leaders that automakers need to present a detailed recovery plan before they receive an aid package. It was also clear from Mr. Obama's comments that he had been consulted on the Treasury Department's multibillion-dollar Sunday rescue of Citigroup.

Mr. Obama's approach is encouraging for a number of reasons. His economic team includes smart, moderate Washington veterans, admired by Republicans as well as Democrats. He has been careful not to over-promise, cautioning that many sacrifices lie ahead. And his low-key, considered approach to the economic tangle offers reassurance to a nation that has lost confidence in its economic future.

Mr. Obama declined to put a dollar amount on the prospective stimulus package, expected by some Democrats in Congress to total $500 billion to $700 billion. He said he expects a detailed proposal would be presented to Congress when it returns in early January and that a version of it would be ready for him to sign shortly after he becomes president. At that pace, Mr. Obama should have a credible shot of achieving what he says is his most important goal - restoring the confidence of middle-class families.

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