Why Did Obama Bypass Robert Reich?

what am i, chopped liver?

Of all the cabinet choices that Obama didn’t make, there are a few that really stick out. Not choosing Bill Richardson at State after he had switched loyalties from the Clinton camp early in the game and delivered a big jolt of legitimacy to the Obama team is one, but at least he got a job – if not the one he wanted. The big and potentially most worrying missing name from Obama’s line-up is Robert Reich. Now, it’s very possible that Reich said he wasn’t interested, that he preferred being an academic and a commentator, but it’s also possible he was left out in the cold.

If the latter is indeed true, it would be a very worrying sign for the economic path Obama is likely to take. Reich is the most reasonable, sensible, honest, straightforward and intelligent guy who wasn’t chosen to steer the economy. He knows the mistakes that were made, he saw them coming a mile off, and unlike Tim Geithner, he has no role whatsoever in the disaster that has befallen us. His only ‘crime’ maybe that he is seen as too ‘progressive’, and might ‘scare Wall Street’ (not that Wall Street’s opinion is worth a bucket of spit).

I Can’t Take My Eyes Off The Dow…

you're getting sleepy...

The Dow Jones Industrials are widely regarded as a pretty poor indicator of where the overall equity markets stand, let alone the real economy. As one hedge fund manager suggested, “equity markets are a zit next to the bond markets.” And let’s not even mention the vast trillions in the derivative markets which have damaged the global economy so profoundly.

And yet at the end of every radio newscast, on every Yahoo home page, on the ticker on every cable network, thereis the DJI, it’s not so shiny brand dancing around at the whim of some very silly people playing monopoly with other people’s money. It’s going up, it’s going down, it’s barely moved. Blah, blah, blah.

The truth is we’re worshipping a zit.

Obama versus his Cabinet

eahhh. i've seen better.

So what exactly is Obama thinking with his cabinet picks?

Everyone from Joe Lieberman to Pat Buchanan is delighted with Obama’s top job choices. Joe says they’re “perfect”, which suggests Obama is doing something very, very wrong. Pundits are torn. Is Obama a closet centrist who sold us a bill of goods with all that ‘change’ stuff? Or is he a progressive who’s going to browbeat all his experienced Clintonians into doing his bidding.

My guess is the answer is neither. Obama said today that the ‘change’ is going to come from his desk and filter downwards, but that’s easier said than done. If Obama truly is a progressive (and he really needs to be to define this historical economic moment), a more likely outcome is that the cabinet could quickly descend into ideological squabbling as the President talks up real change, and the cabinet talk up real caution. Obama is known as a consensus builder. If the cabinet is moderate, the consensus will be moderate, and real ‘change’, well that will have to wait.

It would certainly help the President’s ‘change scenario’ that at least one of his major cabinet picks was someone, well, new. But there isn’t really one guy in the top team that offers a totally new perspective on anything at all. So far moderation and predictability has been the order of the day, except in the case of HRC for State, which strikes me more as either fear or plain stupidity.

Time will tell, of course. But there’s one word that definitely wouldn’t be used to describe the new cabinet.

And that’s transformative.

The Cannibalism Of Capitalism

feed me

There’s something diabolical about a creature that consumes itself. It seems so profoundly irrational, so utterly insane. We file stuff like that in some ‘unspeakable’ part of our minds.

Except that we live it every single day.

Capitalism is a great system in many ways, but it has a tendency to destroy itself if left unchecked. We’re seeing that all too clearly right now. There are two areas where capitalism is profoundly cannibalistic.

When Will Hank Paulson Be Done Wrecking The Country?

He’s got less than two months to do it, but it’s possible that by the time Obama gets into the hot seat, America may be in a very nasty depression. Take Hank’s words of wisdom for example on NPR.

November 13th.

Nobody is asking themselves anymore is there some major institution that might fail…

November 23rd

Ten days later and Citigroup’s stock is trading at well below the level where many institutional investors have to sell. Citigroup and the Government meet over the weekend to create a “bad bank” backed by the Government to park all Citigroup’s ‘toxic’ junk, so the bank can rebuild at taxpayer expense

Please, Hank, just go away.

Lost Opportunities at State

Sounds like her ladyship, Hilary Clinton is going to get the nod at the State Department. There are two far better choices out there, one of whom didn’t get a look-in, the other who was sold short.

“Trial Balloon” This Week’s Word du Jour.

will it fly?

You got to love the press. When they get a word or phrase in their heads they just can’t stop using it. Just after Obama won, the word was “transformative”, as in way transformative election. This week, as Obama starts to put together his cabinet and prepare for government, the word is “trial balloon”.

Here’s a great example of an Obama trial balloon. Yesterday, before Obama confirmed that Eric Holder was to be the new Attorney General, the information about Holder was leaked along with a caveat. That Obama wanted to see whether the black mark against Holder’s name ( that he had signed off on the pardon of Marc Rich on the last day of the Clinton presidency ), would be held against him by Republicans on the Senate Judiciary Committee, because he wanted to make sure his Attorney General nominee had broad bipartisan support. The answer came through that the GOP Senators on the committee didn’t have a problem with Holder, so the trial balloon was turned into a big red, white and blue balloon that everyone can be proud of. Sounds smart, right? Maybe not.

Obama and His “Team of Rivals”. Necessary?

he did good

President Elect Obama is a big fan of Abraham Lincoln. He’s not alone. One would be hard-pressed to find someone who wasn’t. In the last few days Lincoln has become famous for creating a “Team of Rivals” made up of his former adversaries to face the looming crisis of secession head on. It was all documented in Doris Kearns Goodwin’s book called…. “Team Of Rivals”. Lincoln’s decision to invite his adversaries into his administration enabled him to create the unity he needed to face the crisis. History has shown it was a great move. But as we face our own, not quite so existential, crisis in 2008, would it be the right move now? The answer is – no.

If Obama were to actually invite a large number of contrarian opinions into his cabinet and inner circle, it would, in my view, be a very bad idea. The reason is simple. In economic, environmental, welfare and foreign policy, we already know full well what needs to be done to salvage the country’s future.