More Regulation is Coming?

President elect Barack Obama announced key members of his economic team this week. One of the key members of this team is Larry Summers, former treasury secretary under the Clinton administration and currently appointed to head the White House's National Economic Council. In this role, Larry Summers would serve as the primary advisor on framing policies related to domestic and international economic issues. In other words, he would have the Presidents Elect's ears on making policy decisions to get the world out of the current financial mess.

Recently Larry Summers wrote an article for the Financial Times which might give some key insights into the economic policy direction of the next administration.

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However, policies that contain the crisis, support the economy and generate recovery are not sufficient to meet the historic challenge of this moment. Even with the best conceivable fiscal, monetary, financial and regulatory policies, economic performance depends on deeper and more structural policy choices. Nations cannot fine tune their way to delivering a prosperity that is more broadly based. In important ways, then, the crisis creates space to address longer standing problems. Just as patients hear advice regarding diet and exercise differently after a heart attack, so recent events should make it possible for the next US administration to accomplish more than might previously have been thought possible.
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If this article is anything to go by, then the thinking of the incoming administration is to not just focus on more regulation, but also to boost government spending on infrastructure related projects like developing more renewable energy sources, expanding broadband connectivity and investing in science and technology.