William Cohan's Economic Dream Team: Bowles - Spitzer - Reinhart

With everyone convinced that it is only a matter of time before Larry Fink steps into the office about to be vacated by that walking 1040 disaster, Tim Geithner, thereby allowing the man who many say is the shadow king of Wall Street to define US policy for another 4 years (because Wall Street's complete dominance of US politics since JPMorgan's bailout of the US government is certainly not enough), there is still time to consider alternatives to a position that will make sure the only class to benefit from "four more years" are the uber wealthy (even as entitlement policies keep the uber poor at least content). Today, Bloomberg columnist William Cohan proposes his economic dream team, which far from perfect, will at least, superficially, assure that Wall Street won't come first and foremost when policy considerations are discussed. The names: Treasury Secretary: Erskine Bowles; SEC Chairman: Eliot Spitzer; National economic advisor: Carmen Reinhart.

From William Cohan:

President Obama, the time has come for you to do in your second term what many people hoped you would do in the first: Institute meaningful reform on Wall Street. An essential first step is to sweep out the remaining vestiges of the Rubin- Altman nexus. Bring in a new group of people who not only understand how Wall Street really works but also have dedicated much of their lives to changing it.

Who might some of those people be? For Treasury secretary, the best choice is Erskine Bowles, who has distinguished himself as co-chairman of the National Commission on Fiscal Responsibility and Reform. Although it is true that Bowles was chief of staff to President Bill Clinton, and thus rubbed elbows with Rubin and Altman, he isn’t in that Rubin orbit. He understands Wall Street -- he founded a small eponymous investment bank and a private-equity firm, Carousel Capital, and was a partner at private-equity giant Forstmann Little & Co. -- and did a fine job serving as president of the sprawling University of North Carolina system.

More important, he has spent the past year shaping his commission’s report -- despite Obama’s having ignored it -- into legislation that Congress can take up immediately to try to resolve the budget deficit and the looming fiscal cliff, the more than $600 billion in tax increases and spending cuts scheduled for next year. He has a proven record of bipartisanship, working well with Alan Simpson and the other Republicans on the commission. Appointing Bowles to Treasury would show that Obama is serious about getting the country’s fiscal house in order and finding a more productive relationship with Wall Street.

To address the vacuum of accountability on Wall Street, Obama should appoint former New York Governor Eliot Spitzer as the new chairman of the SEC. I’m not joking. Having prosecuted Wall Street misdeeds as New York attorney general a decade ago, he knows where the bodies are buried and won’t be afraid to dig them up. As a cable-television host, he has proved to be the news media’s most aggressive and informed critic of Wall Street. The question, of course, is whether the president would nominate him and the Senate would confirm him given his humiliating fall from grace in a prostitution scandal. My reply: Is only Bill Clinton entitled to political resurrection?

To replace Sperling, who has had more lives in Washington than a Persian shorthair, Obama should recruit Carmen Reinhart, a highly respected Harvard economist with an up-from-nothing personal history that rivals the president’s own (her family fled Castro’s Cuba with little more than the clothes on their backs). That she has a keen understanding of how economies get into financial difficulty and how they get out of them -- she is the co-author, with Kenneth Rogoff, of the best-seller “This Time Is Different” -- is a huge plus. And she calls things as she sees them: Although usually considered to be on the right of the political spectrum, she was a strong detractor of Romney’s mathematically illiterate tax plan.

In his victory speech, Obama said, “You voted for action, not politics as usual.” It was similar to the refrain he used four years ago, before disappointing us with politics as usual. By choosing Bowles, Spitzer and Reinhart as the anchors of his new economic team, he could start proving that this time really is different.

Full article here.