First Orszag, now Romer? If the latest rumor about the imminent defection of one of the three remaining policy stalwarts is true, it means the administration's economic policy is on the verge of collapse. Hotline Oncall reports: "Christina Romer, chairwoman of Pres. Obama's Council of Economic Advisers, has decided to resign, according to a source familiar with her plans. Romer, an economics professor at the University of California (Berkeley) before taking the key admin post, did not respond to repeated calls to her office." The sad reality is that Romer's (who has largely been a mere figurehead and staffed to provide soundbites to CNBCs how every worsening NFP report is in reality a dramatic improvement, a job which even Steve Liesman can do with a passing grade) departure will only make the remaining two people in Obama's economic circle, Tim Geithner and Larry Summers, even more powerful. Why couldn't those two leave? Surely both have by now earned their $2.5 million a year job at Goldman... We now anticipate the 8-K from Whitehouse Corp announcing the appointment of Paul Krugman and Mark Zandi to fill the newly vacant positions.
More from Hotline Oncall:"She has been frustrated," a source with insight into the WH economics team said. "She doesn't feel that she has a direct line to the president. She would be giving different advice than Larry Summers [director of the National Economic Council], who does have a direct line to the president."
"She is ostensibly the chief economic adviser, but she doesn't seem to be playing that role," the source said. The WH has been pounded for its faulty forecast that unemployment would not top 8% after its economic stimulus proposal passed.
Instead, the jobless rate is 9.5%, after exceeding 10% last year. It was "a horribly inaccurate forecast," said Bert Ely, a banking consultant. "You have to wonder why Summers isn't the one that should be taking the fall. But Larry is a pretty good bureaucratic infighter."
Another abrupt exit from the West Wing economic team has left the Obama Administration scrambling for excuses and Ms Romer verbalizing very familiar frustrations to her colleague Peter Orzag, recently retired Budget Czar. Unfortunately, we are stuck with tweedle-dee (Tiny Tim) and tweedle-dumbo (Summers) now and their dominance over the presidents thought on economic policy has only been buffeted by Romer's abrupt exit.