Obama Skepticism and Paul Volker

So far, almost everyone and their dog has praised the economic team that Obama has assembled, even while noting their widely varying views. I'm highly skeptical. The cornerstone of Obama's economic plan is to spend, spend, spend and not worry about the debt. Part of his team, even if just on an advisory basis, is Paul Volker. Here's a bit about him.

Volcker is back, tapped by Barack Obama as a special economic advisor. And if the president-elect follows his advice on the current economic crisis, there could be pain again and no doubt many protests -- but also the possibility of long-term benefits.

Small chance of that as Paul Volker's advice runs completely contrary to the majority of Obama's team.

His concerns go to the very core of how America lives and how Wall Street operates. A child of the Great Depression and a man of legendary personal thrift, Volcker thinks Americans have been living above their means for too long.

"It is the United States as a whole that became addicted to spending and consuming beyond its capacity to produce," Volcker lectured the Economic Club of New York in April. "It all seemed so comfortable."

Bringing consumption back in line with income would not only crimp individuals and families, but also require major readjustments in the global economy, which has relied on the U.S. as consumer of last resort.

Paul Volker is a dramatic example of the wildly diverging advisors Barack Obama has assembled.

He (Volker) also will have to work with some outsized egos and giant intellects on Obama's economic team: Lawrence H. Summers, chairman-designate of the National Economic Council; Timothy F. Geithner, nominated to be Treasury secretary; and Christina Romer, chosen to lead the Council of Economic Advisors.

The group is generally not of one mind. Major differences exist in how they view regulation, monetary control and fiscal policy. Summers, for example, was among the Clinton administration officials who helped relax federal regulation on Wall Street, recalled David R. Henderson, a conservative economist at the Hoover Institution. Romer has questioned how well fiscal policy works at all, a central tenant of Democratic economic thinking.

To me, this is a clear indication of intellectual chaos within Obama's thinking. I've run teams of researchers, major projects and 100+ person organizations. At no time did my staffs and I have significantly different world views. It made no sense at all to do so. As a leader, you need a staff who will execute your plans and enact your vision. If they disagree with it, you'll be forever chasing them down and changing the decisions they make when they're away from you.

Can you imagine the staff meetings? How is anything going to get done with everyone coming at the problems from completely different viewpoints? It's hard enough to come up with plans of action in the time you've got to meet, much less do it in an environment where people have deep disagreements.

So why would you assemble such a team? First off, there is no way Barack Obama has an economic vision at all. You would not bring together this kind of team if you had a clear direction for the government. Second, the team consists of high-profile people who are guaranteed to earn Obama kudos from everyone. Financial scrooges like me love the Volker selection and profligate spenders love some of the others.

My conclusion is that Barack Obama's primary goal is adulation. Beyond that, he has very little intellectual discipline and no vision of his own. The team has been assembled to garner him praise from all quarters and to insulate him from criticism as every viewpoint will have been heard. I think that's an achievable short-run goal, but in the long run, after we've blown through a couple of trillion dollars and have nothing to show for it save a massive financial hangover, his lack of vision and purpose will become obvious.

Barack Obama at the center of his council of economic advisors.