Bush admin announces Citigroup bailout as Obama unveils his economic team

November 24, 11:21 AMPolitical Issues ExaminerJudah Freed

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Hours after the Bush administration surprised financial markets by announcing a $320 billion bailout of Citigroup, President-elect Barack Obama unveiled his new economic team.

Federal aid to Citigroup features $300 billion in guarantees for losses from bad assets related to the mortgage meltdown coupled with a $20 billion equity stake in the nation's largest financial corporation. This new capital infusion adds to the $25 billion given to Citigroup since Congress passed the $700 billion banking bailout in October.

Just as markets were absorbing this news, President-elect Barack Obama introduced the four principal nominees of his economic team at a noon press conference in Washington, DC. They will assist him, he said, in addressing an "economic crisis of historic proportions."

New York Federal Reserve President Tim Geithner was named as the Secretary of the Treasury. A press leak about his nomination last Friday yielded a Wall Street rally.

Bill Clinton's former Treasury Secretary, Larry Summers, was named as chief of the National Economic Council. Summers previously served as chief economist of the World Bank from 1991 to 1993.

An economics professor from the University of California at Berkeley, Christina Romer, will chair the President's Council of Economic Advisers, which will have two more nominees that also must face Senate confirmation

The executive vice president for policy at the Center for American Progress, Melody Barnes, was named as the director of the Domestic Policy Council.  As Barnes' deputy, Obama has named Senator John Kerry's legislative director, Heather Higginbottom, who not on the stage today.

In his prepared remarks and in questions asked by pre-selected members of the press, Obama said,  "We cannot have a thriving Wall Street without a thriving Main Street."

Obama declined to give any hard numbers for his plan nor a timetable today beyond repeating a prior pledge to boost the economy by creating 2.5 million jobs in such sectors as energy, health care and education.

He stressed the importance of the automotive industry to the national economy, adding that he was "surprised" leaders of the Big Three Detroit automakers did not come to Congress last week with a clear proposal. He said they need a concrete plan that includes retooling their plants before Congress should give them any money.

My judgment is that Obama is wise unveiling his economic team early, yet there is a long road ahead between now and the day his administration takes office on January 20, 2009.

So far, Obama and his transition team is working cooperative with Bush and his officials to address the nation's financial crisis. What happens, however, if Bush defiantly advances fiscal actions that Obama strongly opposes?

I hope this does not happen, but the question is valid. Would Obama work privately to undo or mitigate Bush's action, or would President-elect Obama openly confront President Bush?

We'll have to wait and see.

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