From today's WaPo:
Wall Street ties complicate the politically touchy search for economic adviser
By Peter Wallsten and Perry Bacon Jr.
President Obama is expected to name a new chief economic adviser as early as this week, but the months-long search process has proven difficult and politically touchy.
Ideally, the choice of a top economic adviser would be based on a preliminary, if rough, understanding of the nature and origin of the current economic crisis and who then would best objectively understand what policies would be needed to deal with it. Looking to economists who successfully predicted the crisis or who have already presented plausible explanations of its causes would be a good place to start. Unfortunately, it appears that the actual selection criteria are exclusively satisfaction of political and ideological requirements -- in effect, a sell out in advance to every major special interest. The predictable result will be compromise polices that rock nobody's boat in any major way and aim for business pretty much as usual. It has already been the problem that the Obama Administration, and Congress and the Fed, have treated the Great Recession as an unusually severe but otherwise normal cyclical downturn treatable by stimulants and bailouts, although there is plentiful evidence that the problem is structural in origin and requires structural remedies.
Politics, and absence of true leadership, will result in continued misdiagnosis and a program of politically acceptable palliatives which will be very weakly effective at best but could, if applied too aggressively, lead to new and worse problems.