Summers Leaving the Obama Economic Team

Larry Summers, director of President Obama's National Economic Council, is leaving his post by November, the latest sign of turnover among policymakers advising the administration on a still-troubled economy.

Bloomberg News said Summers' successor may come from the corporate sector. That would help bolster the president's argument that he is pro-business, and possibly help counter complaints that some of his economic advisers have been too close to Wall Street. The administration also may give weight to finding a woman for the job.

Obama indicated change was afoot on Monday during a town hall-style meeting on CNBC.“This is tough, the work that they do. They’ve been at it for two years, and they’re going to have a whole range of decisions about family that will factor into this, as well.”

There's growing speculation that Treasury Secretary Tim Geithner, for former New York Fed chief with close ties to Wall Street, may leave as well. Obama has recently lost two top economic advisers, including Peter Orszag, director of the Office of Management and Budget, and Christina Romer, head of the Council of Economic Advisers. Orszag has since gained attention for publicly arguing that taxes should not be raised at this point in time. Obama has advocated letting Bush-era tax breaks on those making more than $250,000 expire, a position that has put him at odds with small business advocates.

The new head of OMB, Jack Lew, is a Clinton-era official known for his budget-cutting prowess.

The question now, is who will succeed Summers. And what will it mean?

Summers, an academic who became the youngest tenured processor at Harvard at age 28, has a great deal of stature and experience—he advised the Clinton administration as well. Summers has stressed closer ties to business, and a relatively moderate approach to issues such as economic stimulus and bank regulation.

Obama is facing pressure from the left to be more aggressive about raising taxes and stimulating the economy. The prospect of a double-dip recession is less clear, but the Fed said today it is concerned about growth and a stubbornly high jobless rate. But the electorate as a whole seems more worried about moving to the center on issues such as taxes and the deficit.

It's tough to make a call on the economy, because job growth is weak but indicators have pointed higher in recent weeks. The stock market has rallied 9 percent this month, and the S&P 500 has erased the year's loss and is now up 2 percent since January. Even the Fed seems unsure of which way to go. Fed chief Ben Bernanke said today he is prepared to act on the economy—but just not right away.

Regardless of which direction Obama leans, it's clear that no one is happy with the economy's slow recovery and that a new team will be shaping policy.