But reports this morning suggest that Obama might look to name someone from the corporate world, more bluntly, a “Woman CEO,” thus killing two birds — keeping gender balance and placating the business community — with a single stone. Who might that “Woman CEO” (shudder) be? Speculation is centering on Anne Mulcahy, the former head of Xerox.

Would it even be feasible to name such a non-economist to a head economic position? Apparently, yes — the job is more management than heavy academic lifting, which is left to the Council of Economic Advisers, now headed by Austan Goolsbee. Keith Hennessey, a director of the NEC for George W. Bush, explains the gig clearly:

The NEC Director (Summers) runs the economic policy process.  It’s a process management role.  When an economic policy issue needs a Presidential decision, the Director of the NEC manages the process within the White House and the Executive Branch that ultimately results in a Presidential decision.  Policy council staff run many meetings and conference calls.

The NEC Director generally has an advisor role and an honest broker role.  The advisor role is the high visibility one that everyone thinks is fun:  you get to tell the President what you think he should do on every economic policy decision he needs to make.

The honest broker role consumes much of the NEC Director’s time.  Each week the NEC Director and his or her staff of about twenty run dozens of meetings and conference calls of senior Administration officials to discuss and debate policy questions, gather recommendations, and ultimately advise the President.  In my view, the best NEC Directors were the ones who would not impose their own policy views on this decision-making process, but instead would let the 5-20 other senior advisors to the President slug it out.  The NEC Director would make sure the debates were informed by accurate information, solid policy and legal analysis, and rigorous logic and strategy.  If a Cabinet Secretary or a senior White House staffer thinks that the NEC Director is going to prevent the President from hearing his or her advice, or that the NEC Director has his thumb on the decision-making scale, then that Cabinet official or White House staffer will often seek a back channel to bypass the decision-making process and provide unfiltered ex parte input to the President.  The President has to deal with so many issues and so many decisions that if this NEC-led process breaks down, the wheels eventually come off.

In addition to whatever personal skills and abilities he or she brings to the job, most of the NEC Director’s power comes from his or her proximity to the President (physically, bureaucratically, and sometimes personally), from the breadth of his turf, which covers all economic policy, and most importantly from the reality that he or she runs the meetings and controls the paper.  If the NEC Chair is effective and perceived as fair by other members of the President’s economic team, he also gains power from other senior advisors who want to help the NEC policy process succeed, even when they sometimes disagree with the President’s decisions.

Dr. Lawrence H. Summers, Director of the National Economic Council and Assistant to the President for Economic Policy, announced his plans to return to his position as University Professor at Harvard University at the end of the year.

Dr. Summers is the chief White House advisor to the President on the development and implementation of economic policy.  He also leads the President’s daily economic briefing.

“I will always be grateful that at a time of great peril for our country, a man of Larry’s brilliance, experience and judgment was willing to answer the call and lead our economic team.  Over the past two years,  he has helped guide us from the depths of  the worst recession since the 1930s to renewed growth.  And while we have much work ahead to repair the damage done by the recession, we are on a better path thanks in no small measure to Larry’s wise counsel.  We will miss him here at the White House, but I look forward to soliciting  his continued advice and his counsel on an informal basis, and appreciate that he has agreed to serve as a member of the President’s Economic Advisory Board.”

Dr. Summers said “I will miss working with the President and his team on the daily challenges of economic policy making.  I’m looking forward to returning to Harvard to teach and write about the economic fundamentals of job creation and stable finance as well as the integration of rising and developing countries into the global system.”

Dr. Summers overseas the coordination of economic policy making across the Administration, leads the President’s daily economic briefing and has been a frequent public spokesman for the Administration’s policies.

Under Dr. Summers’s leadership, the National Economic Council has been at the center of economic policy making in the Obama Administration.  He served as an architect of the Recovery Act and other job creation measures and the Financial Stability Program.  As co-chair of the President Auto Task Force, he led the restructuring of the U.S. automobile industry.  He has also played a leading role in managing our international economic relationships including China, developing the President’s health care plan, opening the broadband spectrum, and in international climate negotiations.

Summers is the third major economic figure to depart the White House in recent months, following Christina Romer, the head of the Council of Economic Advisers, and Peter Orszag, the head of the Office of Management and Budget. More to come…

Rep. Barney Frank (D-Mass.)

A trusting Congress might be setting itself up to be burned again.

Last week, even as he introduced legislation to bolster Washington oversight of the Wall Street bailout, Rep. Barney Frank (D-Mass.) all but proclaimed his own proposal unnecessary.

Illustration by: Matt Mahurin

“It doesn’t have to be enacted,” Frank, who chairs the House Financial Services Committee, told reporters Friday in the Capitol. “It would be helpful if it was. But if the bill passes the House with a large majority, and we have smart and cooperative people in this [Obama] administration, I’m willing to accept their word that they will act as if it were the law.”

The message was clear: Despite Congress’s many objections to the Bush administration’s handling of the $700 billion Troubled Assets Relief Program (TARP), lawmakers — at least Democrats — are professing their faith that President-elect Barack Obama will spend the money more wisely and transparently than his predecessor. Trust, under this arrangement, has replaced the desire to legislate.

It’s a strategy that’s not finding a friendly reception from consumer advocates and government watchdog groups, who’d prefer that the bailout spending be clarified by force of law.

“I don’t think Congress should take any politician at his word,” said Steve Ellis, vice president of Taxpayers for Common Sense. “Just because the person at the other end of Pennsylvania Avenue is in the same party doesn’t mean you don’t hold him accountable … They [Democrats] absolutely need legislation.”

Graham Steele, legal associate at Public Citizen’s Congress Watch, echoed that message. Despite the natural urge among Obama supporters to give the incoming-president and his team the benefit of the doubt, Steele said, “binding legislation is the best scenario to ensure that they do what they say they’re going to do.”

The comments arrive as President George W. Bush, at Obama’s request, is seeking the release of the second $350 billion of the TARP funding, which requires congressional approval. Obama met with Democrats at the Capitol Tuesday to address their concerns about releasing the money.

Complicating that request, lawmakers on both sides of the aisle have grown more and more impatient with the Bush administration’s implementation of the financial rescue. Congress approved the legislation in October after Treasury Dept. officials vowed to use the money to buy up the toxic, mortgage-backed assets that threatened to topple countless financial institutions. Instead, the White House invested directly in the troubled banks in an effort to thaw frozen credit lines — a change of strategy prompting no absence of congressional criticism.

Lawmakers have also blasted the Bush Treasury for its lack of spending transparency and its failure to use the bailout cash to target the foreclosure crisis that remains at the root of the financial meltdown. Both issues — along with efforts to rein in executive compensation for bailed out banks — are tackled in Frank’s reform bill.

But it’s a proposal not likely to be enacted. Despite a hearing and an expected House vote on Frank’s bill this week, it’s tough to find anyone who thinks the legislation has legs in the Senate. Indeed, Banking Committee Chairman Christopher Dodd (D-Conn.) said this week that he would consider legislation similar to Frank’s, but assurances from the Obama camp would likely be an ample substitute.

Dodd says the problem is not with the TARP bill, but simply with the Bush administration’s implementation of it — a problem the Obama team can fix without new legislation. “They agree,” Dodd said in a statement Monday, “that we need a comprehensive, coherent strategy to replace the current piecemeal approach, and have committed to using additional funds to help Main Street.”

On Monday, Larry Summers, Obama’s top economic adviser, issued a letter to congressional leaders outlining the incoming administration’s strategy for spending the second half of TARP funds, including heightened oversight and a vow to help struggling homeowners avoid foreclosures.

“Confronting this [foreclosure] challenge,” Summers wrote, “is an absolute imperative if we are to restore the health of our housing sector and the financial system as a whole.”

After months of struggling to get the Bush administration to target foreclosures as part of the rescue strategy, some housing advocates are willing to believe that things will change under an Obama White House — even without TARP reform legislation. “This administration, apparently, is getting it,” said David Berenbaum, executive vice president of the National Community Reinvestment Coalition.

Still, Summer’s nonbinding document is just three pages long. Many consumer groups want more assurance that the Obama White House will follow through with its plans.

“The danger is that we get off the rails,” Steele said, “and the next industry comes along, hat in hand, and the money starts going to places it was never intended.”

Linda Sherry, director of national priorities at Consumer Action, a consumer-rights group, said Obama’s promises of spending transparency are great, but they lack the force of law that would guarantee that taxpayers know where the TARP money is going. “It’s very harmful when the public doesn’t have access to this information,” Sherry said. “The companies can’t just get a free lunch here.”

Some good-government advocates are scratching their heads over the alacrity of congressional Democrats’ to trust the White House — even a Democratic White House — after eight years bemoaning the runaway powers of the Bush administration. If lawmakers get burned this time around, they say, they’ll have no one to blame but themselves.

“Fool me once, shame on you,” said Ellis, of Taxpayers for Common Sense. “Fool me twice, shame on me.”