Obama's economic team

President-elect Barack Obama deserves praise for announcing his economic advisory team and his broad economic recovery plan last week, far ahead of the schedule usually followed during presidential transitions. Mr. Obama's early action will make possible an unusual degree of cooperation between his incoming team and the Bush administration on day-to-day decisions during the transition that should inspire confidence in the marketplace.

President Bush said that the president-elect and his team are being fully informed about this administration's efforts to address the nation's unfolding economic and financial crisis.

At the same time, however, there is an inescapable irony that the president-elect's announcement of an economic team bears the stamp of approval of former Clinton administration Treasury Secretary Robert Rubin. The president's announcement came less than a day after the Bush administration announced the bailout of Citigroup, where Rubin has been a senior official for most of the past decade.

Mr. Obama's choice for the director of the National Economic Council and a chief economic advisor to the president, former Harvard President Lawrence Summers, served as deputy Treasury secretary under Mr. Rubin and succeeded him when he left office in 1998. The president-elect's choice for Treasury secretary, Timothy Geithner, president of the New York Federal Reserve Bank, served under Mr. Rubin and Mr. Summers as Treasury undersecretary for international affairs. Peter Orzag, the designee for budget director, is another Rubin protégé.

Mr. Geithner has been a major participant in efforts by Treasury Secretary Henry Paulson and Federal Reserve System Chairman Ben Bernanke to mitigate the effects of the current financial storm, and a leak about his pending appointment caused the stock market to rally sharply.

But while Mr. Geithner's star has been rising, questions should be raised about the record of his former superior. Mr. Rubin, along with former Federal Reserve System Chairman Alan Greenspan, helped block efforts to regulate derivatives in the 1990s, based on the belief that such markets should be self-regulating. Recently, faced with the obvious shortcomings of that idea, both men have acknowledged that they were mistaken.

Meanwhile, however, Mr. Rubin was a part of risky decisions at Citigroup that led to its exposure to $300 billion in bad investments. More than any other single individual in the past two decades, he represents Wall Street's rise and fall in the nation's economy. We can only hope that Mr. Rubin's protégés have learned from the master's mistakes.