Obama economy team needs to show can pull together

WASHINGTON (Reuters) - U.S. President-elect Barack Obama's economic team has drawn accolades for experience and expertise, but will need to overcome concerns the strong-minded individuals at the top might not pull in the same direction.

With stock markets plunging and companies shedding workers at an ever more furious pace, Obama's team will be under pressure to quickly settle on a course of action to counter the risk of a prolonged recession.

Ironically, the bleak outlook may be just what is needed to focus the efforts of Treasury Secretary-designate Timothy Geithner, incoming National Economic Council Director Lawrence Summers and former Federal Reserve Chairman Paul Volcker, who will head a panel of private-sector advisers.

"In normal times it would be difficult to keep such a deeply talented team working together, but these are unprecedented times and that will ensure that they forge a consensus and quickly put forth an effective plan to address the economic crisis," said Mark Zandi, chief economist at Moody's Economy.com in West Chester, Pennsylvania.

Obama said he wanted "the best minds in America" for his economic team, but he also has the challenge of directing their efforts as they seek influence over policy and presidential access where their mandates inevitably meet.

The Treasury secretary normally is the main voice of economic policy-making. But Summers, who may be being groomed as a possible future head of the Federal Reserve, is likely to have a great deal of influence as well, given his stature as a former Treasury chief and one-time mentor to the younger Geithner.

Summers is expected to raise the profile of the NEC, a low-key organization during the Bush years.

"This is a dream team for economic policy-making," said Jeffrey Frankel, a professor at Harvard University who served on Clinton's Council of Economic Advisers.

Frankel played down concerns that it may also set up a possibility for conflict over recovery efforts.

"The president is the ultimate decider," he said. "Summers will no doubt be a forceful advocate of his own views but others who have other policy positions or points to make will also get their chance."

ALL JOBS NOT EQUAL

There are qualitative differences between the posts and there may be longer-term strategic considerations as well.

The 47-year-old Geithner, who as president of the New York Federal Reserve Bank has been consumed by helping engineer bailouts or takeovers of distressed Wall Street firms, must be approved by the Senate for the senior cabinet job.

Summers, 54, had also been mentioned a possible choice to head Treasury, but drew criticism for past remarks on whether innate differences accounted for more men than women entering science and engineering courses. Obama avoided a potentially contentious Senate confirmation hearing by tapping him for the

NEC.

Widely respected for his economic acumen, Summers, who served as Treasury secretary for 1-1/2 years at the end of the Clinton administration, has urged a multiyear "speedy, substantial, sustained" stimulus to boost the economy from its torpor.

While Summers is seen as the idea man on the economy, Geithner, who was a senior Treasury official under both Summers and former Treasury Secretary Robert Rubin, is seen as a nuts-and-bolts practitioner whose deep involvement in financial rescue efforts makes him well suited to take the helm.

Geithner will play the lead role in directing the United States' $700 billion financial rescue fund, now half spent. Treasury Secretary Henry Paulson has redirected the program from its original purpose of buying toxic assets in favor of recapitalizing banks.

LONG, PAINFUL RECOVERY

Given Summers' contention that it will take a multiyear effort to nurse the economy to health, Geithner seems likely to want to keep the bailout program in place. But he will face early questioning from lawmakers about how it will be used.

The towering 6-foot 7-inch Volcker, who Obama consulted frequently while campaigning, has near-legendary status in Washington and on Wall Street as the man who defeated inflation after taking the helm of the Fed in 1979. He will give the incoming president an outside voice that could help him weigh any internal administration debates.

Indeed, Obama said when announcing his economic team that he will set its course. "Understand where the vision for change comes from first and foremost. It comes from me," he said.

There is early speculation that Obama may already be looking down the road to rejuggling some of his advisers.

A Democratic source told Reuters when names of Obama's economic team began to emerge that the president-elect might consider Summers as a successor to Fed Chairman Ben Bernanke, whose term expires early in 2010.

(Editing by Tom Hals)