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Obama is expected to name top economic advisor this week

The top candidates to replace Lawrence H. Summers as director of the National Economic Council have had ties to the financial industry, which the president blames for the Great Recession.

January 05, 2011|By Jim Puzzanghera, Los Angeles Times

Reporting from Washington — President Obama is expected to name a replacement this week for top economic advisor Lawrence H. Summers, and the top candidates have had ties to the financial industry, which the president has lambasted for its role in precipitating the Great Recession.

Summers' last day as director of the National Economic Council was Friday. His deputy, Jason Furman, has taken over the job as the White House finishes a search that began when Summers announced his resignation in September.

Candidates to replace Summers include Gene Sperling, a former economic advisor to President Clinton who has done consulting work for investment banker Goldman Sachs Group Inc., and Roger Altman, chairman of investment banking firm Evercore Partners and a deputy Treasury secretary under Clinton.

Another possible replacement, economist Richard C. Levin, is president of Yale University and serves on the board of directors for American Express Co.

"The president is considering a number of qualified candidates, and he has not made a decision or offered a job," said White House spokeswoman Jen Psaki. "The most important qualification is finding the right person for the job who can lead the team at this pivotal time in the recovery."

White House officials had hoped to name a new National Economic Council director before Summers left. But the scramble to pass key legislation in the final weeks of the year, including a temporary extension of the Bush-era tax breaks, delayed the search.

The emergence of Sperling as the perceived leading candidate is disheartening to some liberals. After he left the Clinton administration, Sperling earned $887,727 from Goldman Sachs in 2008 for advice on its charitable giving, according to a Bloomberg report.

"Going to Wall Street for your top staffer … is very bad both for policy and for political reasons," said Dean Baker, co-director of the Center for Economic and Policy Research. "Wall Street to my mind is still the villain here, and good policy would mean reworking Wall Street."

Sperling has said his work for Goldman involved consulting only on its 10,000 Women initiative to provide business and management education to underserved women around the world.

Sperling, who headed the National Economic Council from 1997 to early 2001, has worked since 2009 as a counselor to Treasury Secretary Timothy F. Geithner, so he is familiar with Summers' job and the Obama administration's economic policies.

His appointment to the White House post probably would add to Geithner's influence on Obama's economic team.

Obama referred to Sperling in September as "one of my top economic advisors" in praising his work on a small-business jobs bill. And Sperling was a key player in negotiations with Congress over the tax-break extension.

But Baker said Sperling's work for Goldman was a drawback, even though he called Sperling "an honest guy."

"His deal with Goldman Sachs doesn't look good," Baker said. "You give someone $900,0000 … it's hard to believe that doesn't ingratiate themselves to some extent with Sperling."

jim.puzzanghera@latimes.com

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