Christina Romer, chairwoman of Pres. Obama's Council of Economic Advisers, has decided to resign, according to a source familiar with her plans.
Romer, an economics professor at the University of California (Berkeley) before taking the key admin post, did not respond to repeated calls to her office.
"She has been frustrated," a source with insight into the WH economics team said. "She doesn't feel that she has a direct line to the president. She would be giving different advice than Larry Summers [director of the National Economic Council], who does have a direct line to the president."
"She is ostensibly the chief economic adviser, but she doesn't seem to be playing that role," the source said. The WH has been pounded for its faulty forecast that unemployment would not top 8% after its economic stimulus proposal passed.
Instead, the jobless rate is 9.5%, after exceeding 10% last year. It was "a horribly inaccurate forecast," said Bert Ely, a banking consultant. "You have to wonder why Summers isn't the one that should be taking the fall. But Larry is a pretty good bureaucratic infighter."
"I never anticipated the amount of the contact I'd have with the president," she added. "If anyone had told me that I'd meet the president of the free world every day, I never would have believed it."
Among her challenges was explaining why her prediction that the Obama-backed fiscal stimulus would keep the unemployment rate below 8% proved overly optimistic. The unemployment rate is now at 9.5%.
"I certainly hoped it would be lower," she said. "The world deteriorated between November 2008 when I started" and the initial estimates were made "and when we took office January 21. Do I wake up every morning and wish it were 8% instead of 9.5%? You bet."
In internal White House circles, Ms. Romer occasionally clashed with Lawrence Summers, the Obama adviser and former Harvard University president and Treasury secretary. But on Thursday, she said, "If anyone had told me that I'd come to view Larry Summers as one of my dearest friends, I never would have believed it. But I do."
I thought this part was pretty interesting:
One thing she says she hadn't realized previously: "The degree to which you often only get one shot at something like the Recovery Act."
"An economist's natural instant is to do things in stages. You take one action, see what it does and see if you need more," she explained. But with the Bush administration Troubled Asset Relief Program to shore up the banks or the Obama fiscal stimulus, that proved wrong. "I didn't realize the degree to which you have only one shot."
Despite the fact that Paul Krugman, Jamie Galbraith and Joe Stiglitz were trying to get the word out? Either she's not too swift, or she's taking the fall for Summers.