WASHINGTON - The economic team that President-elect Barack Obama unveiled yesterday, studded as it is with some of the most brilliant economists in the nation, reflects more than a confident leader's desire to surround himself with talent: It's a recognition that the nation faces troubles the likes of which it hasn't seen in almost three-quarters of a century.
Sunday night's rescue of one of the world's biggest banks and the threatened collapse of the U.S. auto industry are the most recent examples of how great the problems are - and there are almost certainly more to come.
In picking Lawrence Summers, Timothy Geithner, Christina Romer and Melody Barnes for the top economic spots in his administration, Obama has chosen smart, centrist thinkers who until recently advocated cautious, sensible-shoe policies to do such things as boost savings, reduce deficits and allow markets maximum feasible rein.
But the assignment that Obama has given his new team is anything but cautious and sensible-shoe.
Obama has instructed them to craft a plan to create or save 2.5 million jobs in his first two years, and he urged the new Congress, which convenes Jan. 6, to have the legislation ready for him to sign as soon as he is sworn in as president two weeks later. "We do not have a minute to waste," he said.
His goal is to make Washington the consumer of last resort in an economy where consumption is plunging. It is to devise industrial policy-like programs to salvage a collapsing auto industry and turn green an energy industry wholly focused on fossil fuels. It is to dip more deeply into the lives of ordinary Americans - especially those with housing troubles - than the government has done in generations.
Obama declined to say how much the stimulus package might cost but declared that the federal government must act "swiftly and boldly" to resolve an "economic crisis of historic proportions." There are estimates that the package could be $700 billion over two years - compared with the $175 billion per year he proposed during the campaign - or even more.
But so much has gone so wrong in the past 15 months that what would have been beyond the political pale a few years ago is quickly becoming the consensus.
"These are not moderate, centrist times so economists who in normal times are moderate and centrist aren't going to act that way now," said J. Bradford DeLong, a University of California, Berkeley economic historian and prolific economic blogger. "The wild-eyed radicals are looking pretty sensible."
