Newsweek enlists players from the past to advise President-Elect Obama about his forthcoming Cabinet selections. For starters, former Treasury Secretary James Baker comments on one of the key administration roles:
"Any president needs a strong Treasury secretary, but you'll need a particularly strong one in the difficult times ahead. This go-round, the Treasury secretary is going to inherit a boatload of issues and problems, to say the least. After the stock-market crash of 1987, we did two important things that the government needs to be doing today: provisioning significant liquidity into the system to cushion the shock (which we've begun to do) and coordinate our economic policies with those of other countries. Those are the two most significant things we can do.
"It's going to be important that you continue those approaches. But what no one is talking about is the need to maintain our free-enterprise system. Yes, we're going to need to come forward with some more responsible regulation in certain areas, like derivatives and credit default swaps. But be very careful not to throw the baby out with the bathwater. Don't shift so far away from free-market principle that we lose the benefits of the most successful economic approach the world has ever seen, and that is free market and free enterprise.
"You'll find Treasury to be a bit more protected, in the sense that not everybody is trying to get into tax policy or exchange-rate policy. Some of the things you're dealing with at Treasury are a bit more esoteric. But the president ought to make it clear that the head of the department is going to be the primary spokesperson on issues of economic policy."
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