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Obama's economists are great, but can Barack channel Miles Davis?
As Barack Obama is about to find out, all-star teams can be funny things. Fortunately, he has some history to guide him.
In the mid-1960s Miles Davis molded Wayne Shorter, Herbie Hancock, Ron Carter and Tony Williams — musical legends all — into one of the greatest quintets in jazz history. Their collective artistry was second only to Miles’ previous band, which used the same all-star approach to produce "A Kind of Blue," the best selling jazz record of all time and one I’ve heard played in Beijing, Bangalore, Cairo, London, rural Mexico and other far-flung places.
Basketball offers another hopeful lesson. In 1992, under the invisible hand of coach Chuck Daly the U.S. “Dream Team” seized the Olympic gold medal with an average winning margin of 43.8 points, and with Daly not once needing to call a timeout.
In both cases these effective leaders put together supremely talented teams. But then, critically, they made their stars align.
Conjuring greatness, of course, is rare. And for every all-star triumph there’s disaster waiting to happen: think the Warren Beatty-Dustin Hoffman debacle "Ishtar," or more ominiously for Obama, Kennedy's coterie of the "best and brightest" who dreamed up that young president's Vietnam policy.
The dangers are everywhere: ego, pride, ambition, internecine feuds, miscommunication and mixed messages.
That brings us to our current predicament, the worst global economic crisis since the Great Depression.
Obama’s economic posse is a dream team by any measure. They’re the Keynesian equivalent of John Coltrane’s tenor or Charles Barkley’s elbow. These are talented, smart, and original thinkers.
There’s prickly Larry Summers in the White House, serene Timothy Geithner at Treasury (provided he survives the nomination process), stingy Peter Orszag overseeing the Congressional Budget Office and professorial Christina Romer heading up the Council of Economic Advisers. There’s also the respected Paul Volcker leading a new Economic Recovery Advisory Board under the daily direction of brainy University of Chicago economist and Obama confidante Austan Goolsbee.
But here’s the question: Can the incoming President — who is, happily, a fan of Miles Davis and who, conveniently, sports a wicked jump shot — make this stellar economic team perform its own feats of greatness?
So far, the signs are promising. And they do hint at the Miles mode of leadership, which expertly mixed a variety of talents and voices.
President-elect Obama has clearly gone for smarts, competence, and a global outlook. But most importantly, he’s picked advisers with the right experience.
While working at Treasury in the late 1990s, Summers and Geithner helped manage several similar global economic problems, including the Asian financial crisis, Russia's bond default and Mexico's devaluation of the peso. Geithner’s globalist street cred is especially strong: he's studied Japanese and Chinese and has lived in Japan, China, Thailand, India and Zimbabwe.
These economists also both know how to get bureaucratic wheels moving, and how to work with other countries — ideal skills for the current global crisis.
Romer, meanwhile, is known for her academic expertise of the Great Depression — scary, but useful knowledge in today’s White House.
And as a former Federal Reserve Chairman under presidents Jimmy Carter and Ronald Reagan, Volcker is hard-wired to resist the political pressure and pork that can lead to bad economic policy.
Accordingly, Obama’s team is winning near-universal praise. “The most important issue is that they know how to make government work,” University of Chicago international political economist Marvin Zonis and a colleague of Goolsbee, told me. “They know how to deal with what is a global financial and economic crisis.”
They had better. The speed and severity of this crisis, which began in the United States and is spreading around the world should scare anyone, all-star or not.
The U.S. economy — which produces 25 percent of global output — is expected to shrink for at least three straight quarters, a feat not seen in a half-century. Unemployment is already at a 16-year high. Consumer confidence has fallen to a 40-year low. The IMF predicts losses at global financial institutions may reach $1.5 trillion, further freezing credit worldwide.
Meanwhile, there’s the widening U.S. budget deficit projected to exceed $1 trillion (7.5 percent of GDP), global trade imbalances made worse by an undervalued Chinese currency and the fear, anger and mistrust surrounding a U.S. financial system that has gone from supermodel to scapegoat faster than you can say Bernie Madoff.
So whatever potential remedies Obama's team cooks up in the weeks and months ahead, they won’t be curing our economic ills quickly or easily. Patience, then, is needed — from Wall Street, to Main Street and just about every other avenue, calle or hutong on the planet.
But so, too, is the right presidential touch. Obama must somehow find the perfect mix of chemistry, flexibility, ego management and practical policy measures that will not only help restore economic confidence here, but around the world.
Let's hope the new president can find his inner-Miles. If not, we're all likely to be kind of blue for a long, long time.