The economic left reacted unhappily when Roger Altman, a Treasury Department official in the Clinton and Carter administrations, was reported last week to be a leading candidate to replace Larry Summers as chair of the National Economic Council. White House Press Secretary Robert Gibbs denied that Altman is the leading candidate, saying there are many candidates, which is exactly what you would expect him to say and should not be taken at face value.
Many liberal bloggers and economists were perplexed and disappointed by the possibility that Altman would replace Summers. This is not because of his views on the current financial predicament, which are not well known, nor on his specific record in previous government positions. It is guilt by association: Altman is an investment banker and a veteran of the Clinton administration, which cheered financial deregulation. He was a board member and partner at the now defunct Lehman Brothers, worked for Blackstone Group, and currently has his own private-equity firm.
"I don't know much about Altman's views as of late," Dean Baker, codirector of the Center for Economic and Policy Research, conceded to NEWSWEEK. "But it is hard not to identify him with the bubble-fueled growth policies of the Clinton years that laid the path for the economic wreckage that the country is now digging out of." James K. Galbraith, professor at the University of Texas and son of the legendary liberal economist John Kenneth Galbraith, said to NEWSWEEK: "At a moment when the president needs to declare independence from Wall Street, this appointment carries a very high burden of proof."
Center-left bloggers such as Jonathan Cohn at The New Republic were also skeptical. One common theme among many of these complaints is the assumption that the electorate views Obama as being too close to Wall Street. Cohn writes, "The optics [of picking Altman] make no sense to me. A major source of discontent with Obama is the perception that he's too close to the financial industry." Baker says, "If President Obama wanted to make a pick that would antagonize the electorate that voted last week, he would have had difficulty finding someone who better fit the bill than Roger Altman."
Regardless of whether Obama's policymaking has been too close to the financial industry, it isn't clear that this is a major issue for voters. Most probably have no idea who the NEC chair is, much less what he does. If you look at studies of midterm elections during a bad economy after the president's party won two successive elections, you see that the Democrats were due to lose an awful lot of seats this year. People on either side of Obama will argue that their policy preferences are the answer to his political challenges, but that's because everyone thinks the public secretly agrees with them. One person making just such an argument back in July was Altman himself, who wrote in a Wall Street Journal op-ed that what Democrats needed to do in advance of the midterms was mend "the party's deteriorating relations with industry."
"This relationship must be fixed," Altman wrote, "because the views of industry often coincide with those of independent voters. The commitment to address the deficit would help, together with moderate regulatory policy on telecommunications and antitrust, and adding one or two businessmen or women to senior levels of the administration." The notion that laxer antitrust policy would help any Democrat win reelection can be most generously characterized as the wishful, self-serving thoughts of a Wall Street Democrat. But Altman's liberal critics, who point to the op-ed in their case against him, should take note of something else he said in the same piece: "As a member of Wall Street, I'm highly aware that it exists today only by the grace of the taxpayer. Very few—if any—of the larger securities firms would have survived without the $11.5 trillion of emergency, federal credit support. The financial community owes more recompense to the public than it has furnished to date." That's a humility and gratitude that investment bankers should show more often. And if Altman can sell such a policy to Wall Street because of the credibility he has in that community, he could prove to be a stealth liberal choice.