Obama has named his economics team. Marquee names: Christina Romer at the CEA, Larry Summers to head the NEC, and Tim Geithner of the New York Fed for Treasury Secretary.
All of these people are sterling choices . . . except for Geithner. And Geithner is wrong not because he won't be a good Treasury Secretary, but because he's such a very good president of the New York Fed.
Within the Federal Reserve system, New York is special. New York has been the financial capital of the country as long as we've had a Federal Reserve, and its Fed chief therefore plays an extremely important role in the system. All Fed presidents are equal--but one is a little more equal than the others. You can make a convincing case that the power vacuum at the New York Fed that followed the death of Benjamin Strong in 1928 substantially impaired the response to the emerging crisis.
That makes this a pretty delicate time to lose your Fed chief. I understand the counterarguments--having Geithner in at Treasury means he will hit the ground running. That's why I'm not too worried. Still, I wish that list had Summers at Treasury and Geithner right where he's always been.
Update: Felix Salmon points out that the leaking could have been handled a great deal better. Indeed. The Obama team is unnecessarily (I hope) make it look like they're dithering, testing the waters for popularity rather than competence.