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Another Obama economic advisor steps down

Christina Romer, head of the Council of Economic Advisors, says she will leave Sept. 3 and return to her teaching job at UC Berkeley. Her resignation follows that of Peter Orszag a week ago.

August 06, 2010|By Peter Nicholas, Tribune Washington Bureau

Reporting from Washington — Christina Romer, an economic advisor to President Obama, announced her resignation Thursday night, the second top White House economic official to step down.

Romer, head of the Council of Economic Advisors, said she would leave Sept. 3 and return to her job as an economics professor at UC Berkeley.

Romer had clashed with Obama's top economic advisor, Lawrence Summers, over her access to the president, though administration officials said she was not leaving because of any personality conflict or policy differences.

In a statement released by the White House, Obama said Romer had made it clear early on that she wanted to return to Northern California, where her son is to begin high school in the fall.

She is considered a possible candidate for president of the Federal Reserve Bank of San Francisco.

"Christy Romer has provided extraordinary service to me and our country during a time of economic crisis and recovery," Obama said.

Romer's knowledge of U.S. economic history made her a compelling figure when she joined the administration. An expert on the Depression, she was cast as someone who knew how to navigate a recession.

What she couldn't always navigate was bureaucratic infighting.

In his book "The Promise," Jonathan Alter wrote that in 2009, Romer complained that Summers was excluding her from important meetings. During one argument, Summers shouted, "Don't you threaten me!" while Romer replied, "Don't you bully me!" the book says.

A senior Obama administration official said in an interview that "there were some tensions early on in the administration as everyone settled into their roles. But Christy and Larry have emerged as two quite tightly allied economists on the economic team."

Romer did not prevail in some crucial policy debates. She had called for a larger economic stimulus than the $787-billion package that Obama ultimately embraced. But White House Chief of Staff Rahm Emanuel and others feared that if the stimulus were any bigger, it would create a kind of "sticker shock" that would make passage impossible.

One of Romer's contributions became a source of embarrassment for the Obama administration. During the presidential transition, Romer and another Obama economic advisor, Jared Bernstein, produced a chart making the case for a stimulus package.

They predicted that if the stimulus were passed, unemployment would not exceed 8%. As it turned out, the stimulus was adopted in February 2009 and unemployment rose as high as 10.1%. Unemployment now stands at 9.5%, with new figures expected Friday.

Republicans routinely trot out the Romer-Bernstein chart to portray the stimulus as a failure. Still, independent economists have said the stimulus was crucial to staving off an even more severe downturn.

Romer's announcement comes one week after the departure of Peter R. Orszag as director of the Office of Management and Budget. They, along with Summers and Treasury Secretary Timothy F. Geithner, were the nucleus of an economic team the president had tried to keep intact.

After Orszag announced his departure, the Financial Times reported he was frustrated that the White House didn't do more to control the trillion-dollar-plus deficit.

One person close to Orszag said Thursday night that the reason for his departure was personal: After four years in government, Orszag "was ready to move on from that pace and intensity."

peter.nicholas@latimes.com

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