Personnel is policy, it is often said. By that standard, we should be somewhat reassured by the team Senator Obama is assembling to implement economic policy in the new administration. Lawrence Summers, Peter Orszag, and Tim Geithner are all veterans of the Clinton era, and their public positions reveal a disposition to markets, free trade, and fiscal discipline.
But, at this unusual — really unprecedented — moment in our economic history, prior positions and past statements may not tell us much about what we can expect by way of policy in the future.
What’s most worrisome is that Senator Obama himself seems to have strong instincts toward policies which would hinder growth rather than hasten a rapid recovery. He is clearly not an ardent free-trader. He speaks the language of redistribution, not growth. He has yet to back off of any of his many proposals which would impose new burdens and taxes on businesses, thus slowing job creation (for instance, his “pay or play” health care mandate).
And then there is the matter of taxes. The newly emerging team favors reducing budget deficits, but none seem much inclined to do what is necessary to reign in the expansive federal enterprise. To them, fiscal discipline only means higher taxes. And there, the only uncertainty is when they will push for the massive tax hike they all favor.