Larry Summers Out/Peter Orszag in at NEC?

There has been a bit of a boomlet of Summers-is-out stories the last few days, but this one by Joshua Green sounds plausible. The big problem is that since he's already been Treasury secretary and since Ben Bernanke has been reappointed as Fed chairman, there's simply no place for him to go up. And being a staffer, which is essentially what the NEC director is, doesn't really fit either Larry's skills or his style. The position is more suited to a nerd--I mean that in the nicest possible way--like Gene Sperling.

Green speculates that OMB Director Orszag might replace him, but I don't see that at all. OMB is a vastly more powerful organization. I can more easily see Peter becoming HHS secretary whenever Kathleen Sebelius leaves.

I continue to believe that the NEC is an organization without a clear reason for existence. It was created by Bill Clinton to be the economic counterpart to the NSC. But the comparison is invalid. The NSC exists because there is inherent conflict in the nature of the State Department and Defense Department that requires continuous oversight. Also, the NSC's issues tend to be very time sensitive and often involve classified material. But there are no inherent institutional conflicts among the economic agencies, their problems are seldom time sensitive, and even less seldom based on classified information. When I worked at Treasury and had access to some of the material from its intelligence office I found that what I read in the Financial Times was much better quality and more up to date.

In the short run, Larry will probably just go back to being a professor at Harvard after the election. President Obama should use the opportunity to rethink the NEC's role.