Will Obama’s First Term Really Just be a Hybrid of Clinton III and GW Bush III?

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summers rubin greenspan.jpg
There is a strong chance that Lawrence Summers is going to be returned to the post of Secretary of the Treasury. If so, he’s pulling a “Donald Rumsfeld” who served as Secretary of Defense twice — the first stint under Gerald Ford and then of course under George W. Bush.
Others in the running for the post first held by Alexander Hamilton are New York Fed Chief and Summers protege, Timothy Geithner. Former Fed Chairman Paul Volcker is on the list. Interestingly, many on the political left are making the case for former Bob Dole staffer and FDIC chief Sheila Bair, who has in the eyes of many performed brilliantly in organizing an FDIC response on the housing crisis. Laura D’Andrea Tyson is not much discussed in the news but has become close to Obama and would be a solid choice. New Jersey Governor and former Goldman Sachs executive Jon Corzine is also on the list and is the enthusiastic preference of the labor community.
I think that there are more and even better choices. Among the frontrunners, I’d prefer Geithner, Tyson, or Corzine.
Tim Geithner who is the smartest, most unassuming financial markets technician among the lot. Geithner is probably the closest thing we have to a modern version of John Maynard Keynes. I also like Laura Tyson who I think could be useful in launching a campaign of “Tysonomics” which values some elements of industrial policy in a national economic plan vs the manic neoliberalism of “Rubinomics.” Finally, Corzine — who understands better than the other contenders that America’s social contract at home must be dramatically changed — would be a fantastic choice. His only blemish is that he worked for Goldman Sachs — though I think Corzine thinks that was the low point of his working career and wishes he hadn’t spent much time there.
Rumor has it (unconfirmed) that Summers recently had dinner with Gloria Steinem as part of an image repair strategy. Summers has also been reaching out to many economists on the left who generally opposed the manic neoliberal vector that former Treasury Secretary Robert Rubin and Summers had put the nation on during Bill Clinton’s presidency.
I have been surprised about the quick rehabilitation of Summers in Obama Land — particularly given Obama’s promises to the labor community and his strident position during the campaign against the kind of trade deals that Summers and Rubin promoted.
If he is appointed over Geithner, Tyson, and others — we need to quickly get a sense of whether or not the economic views of Summers have changed. Can he embrace a smarter version of globalization than he helped create? Can he help promote an alternative to the winner takes all capitalism that Summers helped to reify and which made people like Robert Rubin mega-wealthy? Can he embrace a genuine re-write of the American social contract that pushes forward the rights and position of labor? Can he abandon the fiscally conservative ideology of the Brookings Institution’s Hamilton Project that he and Rubin helped hatch?
We need to know the answers to these questions. I find it strange that Obama is seriously considering someone whose previous work and profile is so at odds with the goals Obama has proffered in his campaign. If Summers is appointed, we have to hope that he is not the Summers we knew eight years ago.
Larry will have to prove to us that he is different. He will have to prove to us that he is not the harbinger of Clinton Term III.
I spoke to one of the world’s leading, successful financiers Tuesday night who told me he prefers Summers to Geithner at Treasury. But I countered that Larry Summers will probably continue his work as one of Bob Rubin’s chief acolytes — and Rubinism is one of the chief reasons that this economy has been trampling the Middle Class and labor in favor of the super-wealthy financial elite. This financier told me that Rubin and Summers are quite different in fact but few knew of the tensions between them. I told him I’d love to hear more about that as it could help me appreciate Summers more than I do now.
I will keep an open mind, but we are beginning to see trends that if Obama does bring back Summers — and possibly keeps Gates at Defense — that he is not ready to make the first term of an Obama administration about the new great leaps forward we need. He may be crafting a hybrid of Bill Clinton and George W. Bush holdovers.
Indeed, there is a chance that Obama I could turn out to be GW Bush III & Clinton III.
– Steve Clemons

Comments

84 comments on “Will Obama’s First Term Really Just be a Hybrid of Clinton III and GW Bush III?

  1. joe petrozza says:

    Yes,it is a repeat of the clinton years. Why does everyone obama appoints not pay their taxes-oh the company he keeps

    Reply

  2. janine Wedel says:

    Steve’s reservations about Larry Summers are absolutely on point: It would show a terrible lack of judgment for the Obama administration to return Summers to Treasury. There is important additional information about why this should not happen. While at Clinton’s Treasury, Summers helped create a scandal – in which USAID-paid Harvard advisors in Russia – Summers’s friends – ended up being sued by the U.S. government for defrauding it. (In 2005 Harvard University was required to pay the U.S. government $26.5 million in fines, while Andrei Shleifer, Summers’s close friend and protégé, was required to pay $2 million.) But Summers’s involvement did not stop with the Clinton administration. As Harvard president, Summers helped cover up the affair and secure additional favors for Shleifer. A short synopsis of Summers’s involvement can be found in a Boston Globe piece I published(available at http://janinewedel.info/harvard.html) (This cite also provides extensive detail and analysis of the affair.) Janine Wedel

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  3. WigWag says:

    More evidence that Steve Clemons is right; Obama I=Clinton III. To wit:
    Clinton Officials to Lead 3 Departments’ Transition
    NY Times
    By DAVID D. KIRKPATRICK
    Published: November 12, 2008
    “WASHINGTON — President-elect Barack Obama on Wednesday named two former Clinton White House officials, Joshua Gotbaum and Michael J. Warren, to oversee the new administration’s takeover of the Treasury Department as it manages the still-evolving $700 billion financial rescue plan…
    Mr. Warren, 41, the other leader of the Treasury review team, is a Rhodes scholar who has worked as a strategic consultant to technology and finance companies for McKinsey & Company. In the Clinton administration, he was executive director of the National Economic Council…
    The Obama transition team named two more former Clinton administration officials, Thomas E. Donilon and Wendy R. Sherman, to head the transition for the State Department…
    Mr. Obama’s transition team also named two Clinton officials, John P. White and Michèle A. Flournoy, to oversee the takeover of the Defense Department.”

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  4. pauline says:

    The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans By: Ian Welsh Monday November 10, 2008
    What is this man hiding?
    Apparently Bernanke, that wonderful bipartisan soul who is so competent and wonderful that everyone in the village thinks Obama should leave him in charge is refusing to identify who got almost 2 trillion dollars of Fed cash. Bloomberg News is suing to find out. Personally I really, really, really want to know. What exactly is Bernanke hiding? Who got the money he doesn’t want us to know got the money?
    This is money that was loaned in exchange for “collateral”, by which we mean “trash no one else but the Fed would buy for anything but cents on the dollar”. Barney Frank, embarrassing himself yet again, claims the Fed should keep its clap shut because if people know how bad it is, well, there might be a run. I think Barney’s missing the point, as long as people don’t know how bad it is, they won’t trust anyone who might be borrowing large amounts of money from the Fed with crap collateral, because they don’t know how bad it is and they suspect it’s really really really bad. As in 10 cents on the dollar bad.
    More to the point, that 2 trillion is taxpayer money, and taxpayers have a right to know what sweetheart deals Bernanke’s been giving out, and who’s been getting what. This whole “this information is too scary for citizens to know” schtick is so Bush regime. I thought we were moving into a new era of openness? Perhaps Barney should get with the program?
    As for Bernanke, this is yet another reason why Bernanke, a central banker so incompetent he lost complete control of LIBOR, his most basic job, should lose his position. Sure, his mandate runs for another year, but if Obama asks him to step down, I can’t imagine he wouldn’t. The idea that a central bank that has screwed up as badly as the Fed has under both Greenspan and Bernanke is so much better off independent than with the public having some control is ridiculous and fundamentally anti-democratic. Central bank independence has just led to a huge financial bubble and economic collapse, while Bernanke and Greenspan both acted as if they were virtual dictators.
    Bernanke needs to go, and either before or after he goes, the Fed needs to come clean about who it has given 2 trillion in loans to, and what the collateral is.
    see –
    http://firedoglake.com/2008/11/10/the-federal-reserve-is-refusing-to-identify-the-recipients-of-almost-2-trillion-of-emergency-loans/

    Reply

  5. Brian Lee says:

    For the record – I agree with Laura Harrison’s response about Markwell’s account of Keynes. I also apologise to erichwwk if I cam on a bit strong about “have you read ‘The General Theory’?”! It’s surprising how animated you can get on a blog… Thank’s for a very stimulating discusison!

    Reply

  6. Mort says:

    This is amazing. Let’s see: Obama is 4 days into his term as
    President ELECT, and the tombstones are already being placed on
    his presidency. He’s in the bag for the Israelis. He’s a stooge for
    the globalists. Bye-bye change; hello same ole.
    I think Bush got through at least most of his first year before folks
    started piling on. It’s one thing to criticize, it’s another to
    pronounce his presidency DOA.

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  7. obamaisthenewhitler says:

    Obama’s economic policies don’t interest anyone in the middle class.
    What they care about is the fraud that got him elected and Second Amendment rights. He won’t do anything and the press is his lapdog, so he’ll get away with the fraud.
    Even energy has dropped off the radar and nobody outside of California or the rarified liberal atmosphere in New York cares about the war anymore.
    If Democrats were smart, they’d keep their hands off guns, but they’re not. Elitists are so arrogant as to be stupid. The Republican resurgence after the Clinton Gun Ban debacle proves that.
    So Obama’s arrogant and fascist. The Emanuel Party is arrogant and fascist. So they’ll do it again. And they’ll lose at least 35 seats for it. Obama could probably still get re-elected, provided he pulled a Reichstag fire, but the Emanuel party will damage themselves and that’ll be it.

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  8. DonnaZ says:

    Obama is a very cautious politician walking the knife’s edge of
    change vs the safety of the status quo. Currently his moves
    signal a move toward the status quo and away from the
    opportunity presented to him, bold and necessary change.
    Every evening the media offers up a long list of people who get
    things wrong, and they of course ask them, what we should do
    now. Obama seems willing to do the same.
    Soros has spoken about the emergence of “bubbles” and how we
    can always expect to see them. The problem with Summers past
    under Clinton was his inability or unwillingness to see the
    formation of these bubbles. He could have done something and
    chose to cover his eyes.
    Krugman did see and he did say what needed be said. It should
    also be pointed out that Krugman’s recent Nobel was
    recognition for his work on cultural economics, international
    thinking. So why is Obama not consulting Krugman?
    Those who advocated for bad policy, are part of the problem and
    thus, unlikely to be creative when it somes to solutions. Please,
    if we a serious about building a better country, we break the
    habit of asking the source of our problems what to do next.

    Reply

  9. Laura Harrison says:

    Thanks, Brian Lee, for this, including the Michael Lawlor review of Keynes/Markwell.
    Sorry if this feels like the blowtorch, but you don’t seem to have answered erichwwk’s question as to which of Brad deLong’s “Keyneses” Markwell is writing about.
    Maybe you don’t like to pigeon hole scholarly books, but if I were forced to say whether markwell’s Keynes is one of Brad deLong’s “East Anglian Keynesians” or his “MIT Keynesians”, I’d say the latter – certainly that’s the impression I have of how Markwell depicts JMK from the General Theory on.
    In fact, of course, Markwell tries to give us, not a theoretical Keynes but the/a historical Keynes. The book really belongs in history of economic thought/intellectual history/intellectual biography/history of the events of its time.
    Brad deLong quotes some important passages from the General Theory that Markwell also thinks important, and the ideas from which Markwell follows through to Bretton Woods and beyond. But Markwell (page 178 on for quite a way) also analyses and gives the intellectual context for some largely neglected passages in chapters 23 and 24 of the GT about the likelihood of Keynes’s economics promoting peace.
    The only other writer on Keynes who I know has said anything about these passages – and he said precious little – is Hyman Minsky, who’s been getting his own quiet revival in the last few weeks. Which is understandable.
    I agree with you that the key point of all this today is that the next US administration give real leadership in “international economic cooperation”. The person who’s been using that phrase more than anyone else I’ve been hearing is Gordon Brown. This would not have surprised Keynes, I suspect. It was good that Obama on Friday talked, however briefly, about the need for a “global response”. Let’s hope he and his people mean it.

    Reply

  10. Brian Lee says:

    Here are some further reviews of Markwell which I’ve got by googling -
    Paolo Subacchi, “International Affairs”, London
    http://www.politicalreviewnet.com/polrev/reviews/INTA/R_0020_5850_614_1007274.asp
    Jonathan Kirshner (Cornell) – “International Studies Review”
    http://www.politicalreviewnet.com/polrev/reviews/MISR/R_1521_9488_282_1007908.asp
    C Godden, “Australian Economic History Review”
    http://www3.interscience.wiley.com/journal/121430707/abstract
    R Toye, “English Historical Review”
    http://ehr.oxfordjournals.org/cgi/content/full/CXXIII/502/791
    (You seem to have to pay for these last two unless your library has access for you.)
    The book details are at http://www.oup.com/us/catalog/general/subject/Politics/InternationalStudies/InternationalSecurityStrategicSt/?view=usa&ci=9780198292364
    but there’s a bit more info at
    http://www.oup.com/uk/catalogue/?ci=9780198292364

    Reply

  11. Brian Lee says:

    In reply to erichwwk – regarding the Markwell book – Donald Markwell, “John Maynard Keynes and International Relations: Economic Paths to War and Peace”, published in 2006 by Oxford University Press
    You get a pretty good idea of it from Michael S Lawlor’s review at
    http://eh.net/bookreviews/library/1293
    There are other reviews which you can google as well.
    I’m not going to do an amazon.com review, which erichwwk suggests, but if I were to do one I’d say something like this:
    This book is truly important at a time when the world appears to face the greatest global economic crisis since the 1930s, and when governments, economists and commentators are increasingly seeking the insights of the great economist John Maynard Keynes. Through a detailed historical study, this book shows the importance in Keynes’ thinking of international economic cooperation, including the coordination of economic policies and the development of international economic institutions such as those that Keynes helped develop at Bretton Woods (what we now have to call Bretton Woods I?) in 1944. It also shows the evolution of Keynes’ thimking about how economic factors could lead to war, and how economic policies and institutions could promote peace. Although Keynes had a protectionist phase at the depths of the Depression, for most of his life he believed that (at least under some circumstances) free trade was desirable and could help promote peace between countries. This is very topical in the current situation of the United States and the world economies – including Keynes’ stress on the importance of American (and British) leadership of international economic cooperation.
    erichwwk describes Keynes as a “pacifist”. Markwell says he was a “pacificist” – AJP Taylor’s term for someone who wasn’t completely opposed to any war, but who wanted to do all he could (including through economic means) to prevent it.
    I also do not agree with erichwwk and Axel Leijonhufvud that Keynes would be against “mining the past for insights”. Have you read “The General Theory”? Keynes devotes a lot of space there to how his ideas are similar to or drawn from earlier economists, and also where he disagrees with past economists. His lifelong interest in what earlier economists had to say was reflected in, for example, “Essays in Biography”. This is hardly surprising for someone who grew up in a situation where the greatest economists of his day (like Alfred Marshall) were friends of the family. There’s a lot of material of interest in the Markwell book about Keynes’s drawing on past economists – for example, his growing up with the 19th century English liberal idea that free trade promotes peace, and his efforts in the 1930s at what Keynes called “the rehabilitation of Malthus”. Keynes said that if Keynesian policies were adopted, the wisdom of Burke and Adam Smith would come into its own again (or words to that effect) – again, the words of someone who was “mining the past for insights”!
    Not mining the past for insights means, to mix the images, having to revinvent the wheel ourselves – through painful experience.
    My real interest is that we make sure, in the extraordinary circumstances of our time, that we learn from Keynes and others what there is to learn from them. I think that one of the great lessons from Keynes (which the Markwell book brings out) is the importance of international economic cooperation, and of US leadership in this. Will Barack Obama and whoever he chooses as Secretary of the Treasury, and others he appoints, provide the leadership that is needed? Do they understand what Keynes has to teach us about this?

    Reply

  12. Carroll says:

    Posted by questions Nov 08, 8:17PM – Link
    Carroll,
    Don’t be so sure — health care reform could save huge amounts of money for corporations, including car companies. If business interests realize that they could do better with some version of government health care, we might just end up with government health care. The near death of the Big Three auto makers might provide a significant push in this direction.
    >>>>>>>>>>>>
    Of course it could. I totally agree. And if my memory serves me correctly I believe it was Ford Motor that made a case for that after they opened their plant in Great Britian. Their study showed that the government health system in the UK taking that burden off the company made them more profitable, even after UK taxes.
    But I think Obama and his ‘good fellars’ will fall into the same trap that got us here, they will be ‘consumed’ with ‘global economy’. Of course attention has to be paid to that since we are now in the web of 40 years of globalization for the primary benefit of world finance, money running after money without consideration of risk much less to the stability of the US. That will still come first and we the public will once again pay the price in ‘stabalizing’ the ‘global’ economy.
    I see no indication by who Obama is paling around with that there is anyone who knows how or even understands that we must ‘restore’ this country’s economic ‘production’ base instead of trying to coast on being a ‘consumer’ and service economy.
    Where we are today is the product of decades, not just the past decade, of estoric economic theories promoted by those who latch onto trickle up or trickle down or globalization or Keynes or Growth is the magic answer or free trade or whatever other “theory’ catches their fancy and carry it to excess. Well they have all been failures.
    Here is my prediction..Obama will be a one termer….he will cobble together a pot luck souffle that will fall flat because he thinks he can be a centrist on all things.
    Just like the coat of many colors bills that come out of congress. Whatever the original intent is, a dozen other ‘considerations’ for ‘those who must be considered first’ and the ‘status quo’ of those who must be considerd first will be added to the program that will dilute the outcome.

    Reply

  13. Brian Lee says:

    erichwwk asked about the Markwell book on Keynes – “John Maynard Keynes and International Relations: Economic Paths to War and Peace”, published by Oxford University Press in 2006
    http://www.oup.com/us/catalog/general/subject/Politics/InternationalStudies/InternationalSecurityStrategicSt/?view=usa&ci=9780198292364
    I’m not going to write a review on amazon.com, like erichwwk suggested, but if I did I would say something like…
    At a time when the world faces the most severe global economic crisis since the 1930s, and when governments and opinion leaders around the world are again turning to the insights and experience of the great economist John Maynard Keynes, this is a truly important book. It helps us to understand Keynes’s thinking about the need for international economic cooperation – including for the coordination of economic policies between major economies, and for designing strong and suitable international economic institutions (such as Keynes helped to create at Bretton Woods in 1944). It also shows the development of Keynes’s thinking on how economic forces can lead to conflict and war between countries, and what sort of economic policies and institutions can promote peace. Although Keynes went through a period of protectionism, he was for most of his life an advocate of free trade, and believed that – certainly when combined with Keynesian domestic and international policies – it could help promote peace (or at least help avoid the dangers to international harmony created by economic nationalism). This historical study is highly topical.
    A quick google shows that there are reviews of this book at:
    Michael Lawlor (Wake Forest University)
    http://eh.net/bookreviews/library/1293
    Paola Subacchi – “International Affairs”, London, May 2007
    http://www3.interscience.wiley.com/journal/117960016/abstract?CRETRY=1&SRETRY=0
    C Godden – “Australian Economic History Review”, November 2008
    http://www3.interscience.wiley.com/journal/118480604/home
    R Toye – “English Historical Review”, 2008
    http://ehr.oxfordjournals.org/cgi/reprint/CXXIII/502/791?maxtoshow=&HITS=10&hits=10&RESULTFORMAT=&fulltext=%28markwell+AND+john+AND+maynard+AND+keynes+AND+and+AND+international+AND+relations%29&searchid=1&FIRSTINDEX=0&resourcetype=HWCIT
    Jonathan Kirshner (Cornell) – “International Studies Review”
    http://www3.interscience.wiley.com/journal/118524008/abstract
    Sorry – most of these seem to need you to pay for access – but the Lawlor one is online at eh.net
    erichwwk says that Keynes was a “pacifist”. Markwell calls him a “pacificist” – he was not opposed to all war, but wanted to do whatever he could to try to prevent it. His economic policies were partly aimed at this.
    I also don’t agree with erichwwk that Keynes would not have tried to get insights from the past for how to deal with the present. Has erichwwk read Keynes’s “The General Theory”? It contains lots of references to past economists whose ideas Keynes either agrees with and is trying to revive, or with whom he disagrees! In fact, this interest in the history of economic thought is evident throughout Keynes’s life (see, e.g. Keynes’ “Essays in Biography”) – maybe not surprising for someone who grew up with the leading economists of his day (like Marshall and Pigou) being friends of his family. Again, the Markwell book has lots on this which is of interest.
    But getting back to the main point – like Barack Obama said on Friday, “We must also remember that the financial crisis is increasingly global and requires a global response.” We need to be sure that those around him take this approach, and that under him the US provides the international leadership on international economic issues that the US and the wider world all need. Studying Keynes helps us to see the importance (and the opportunities and the difficulties) of this.

    Reply

  14. questions says:

    Carroll,
    Don’t be so sure — health care reform could save huge amounts of money for corporations, including car companies. If business interests realize that they could do better with some version of government health care, we might just end up with government health care. The near death of the Big Three auto makers might provide a significant push in this direction.
    Lobbies might end up with less power IF Obama’s internet system works. That is, lobbies have their greatest power over individual memebers of Congress. If constituents can become an actual countervailing force then lobbyists lose power. The members of Congress want re-election above all else, and Obama’s list of cell numbers and e-mail addresses, together with his ability to motivate an entire generation of new voters, may actually work to alter the lobby/Congress relationship.
    It’s worth a hope, at any rate. But we should remember that Obama, like any president, operates within an established system and that system has an evolutionary logic that is hard to beat without an acceptable set of substitutes. The hope, then, is that he can start the ball rolling towards substituting one set of incentives and rewards with another.

    Reply

  15. erichwwk says:

    apologies for the multiple posts. But a more recent and braoder discussion of the relevance of Keynes is on a WSJ blog here:
    http://blogs.livemint.com/blogs/an_awkward_corner/archive/2008/10/26/keynes-is-back.aspx
    It concludes with an Edmund Phelps reminder (and link to the full paper) that Keynes had no sure cure for slumps, something one also gets from the Leijonhufvud paper.
    “His insights into uncertainty and speculation were deep. Yet his employment theory was problematic and the “Keynesian” policy solutions are questionable at best.”
    and as AL says, Keynes would have wanted us to live in the present, deal with today’s problems, and not mine the past for insight.

    Reply

  16. erichwwk says:

    Axel Leijonhufvud has written an article on “Keynes and the Crisis”, discussing what SHOULD we have learned from Keynes for CEPR that may be on interest:
    http://www.cepr.org/pubs/PolicyInsights/PolicyInsight23.pdf

    Reply

  17. Carroll says:

    Act One, Scene One of the New Obama Play….Walking back the talk.
    SF Chronicle
    ‘During their campaigns for the White House and Congress, Democrats played up their ambitious plans to cool a warming planet, revive the economy and fix a broken health care system. But House Speaker Nancy Pelosi, in her first news conference since the party’s big election victory, warned Wednesday that Democrats might have to scale back the size of their proposals as tax revenues slow and federal budget deficits soar because of a sluggish economy. “I think it’s important for the American people to know that many of our options have been diminished because of the downturn in the economy,” Pelosi said. “We have a lot less money to draw upon.”
    New York Times story:
    President-elect Barack Obama has begun an effort to tamp down what his aides fear are unusually high expectations among his supporters, and will remind Americans regularly throughout the transition that the nation’s challenges are substantial and will take time to address. Mr. Obama’s advisers said they were startled, if gratified, by the jubilation that greeted the news of Mr. Obama’s victory in much of the United States and abroad. But while the energy of his supporters could be a tremendous political asset as Mr. Obama works to enact his agenda after taking office in January, his aides said they were looking to temper hopes that he would be able to solve the nation’s problems or fully reverse Bush Administration policies quickly and easily, especially given the prospect of a deep and long-lasting recession..Mr. Obama’s advisers said that the tone of his victory speech on Tuesday night—sober and devoid of the arm-pumping that would typically be in an address of that sort—reflected his awareness of these circumstances. Mr. Obama warned that the promises that led Americans to embrace his candidacy—be they as specific as expanding health care or as broad as changing the tone of Washington—might take as long a term to carry out.
    Politico story:
    The day after Barack Obama won the presidency, BGR Holding, once one of Washington’s dominant Republican-only lobbying shops, announced it had acquired a Democratic firm with close ties to the incoming administration. BGR’s acquisition of Westin Rinehart illustrates a broad restructuring on K Street that’s accelerating now that Democrats are poised to control both Congress and the White House. Republican heads of business trade groups are bracing for pink slips, and some corporate offices are giving Democratic lobbyists promotions to co-chair their shops and help open more doors on Capitol Hill and in the new administration… Westin Rinehart was founded by Morris L. Reid, a former senior adviser in the Clinton administration’s Commerce and Housing departments. He was in Chicago on Tuesday night when Obama was declared the winner of the White House.”
    I don’t think health care or new jobs or a curbing of lobbies will have staring roles in Obama’s next Broadway production.
    It will once again be the ‘global financial arena’ that takes center stage.
    The problem is it looks like Obam’s men are the same old ‘global financial’ stewards that put the US public in the third world catagory to begin with.
    Move on folks, nothing is changing.

    Reply

  18. erichwwk says:

    I too would be interested in an elaboration of what is meant by “Geithner is probably the closest thing we have to a modern version of John Maynard Keynes”.
    Also, along that line could someone comment on the essense of Donald Markwell’s book on Keynes and International Relaions- perhaps writing a review at Amazon.com?
    What Keynes said is not w/o debate. Brad deLong recently hosted a discussion on this @ TPM which he called “On Keynesian Economicses and the Economicses of Keynes” a pun on Axel Leijonhufvud’s “On Keynesian Economics and the Economics of Keynes” here:
    http://tinyurl.com/6hweq4
    Since Keynes was a pacifist, and got the connection between war and the economy pretty right, I’d be very interested in deeper thought on that, But before investing in Markwell’s book, it would be helpful to know which Keynes he was writing about.

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  19. Brian Lee says:

    Interesting that the line from Barack Obama yesterday that Arthur James quotes – “We must also remember that the financial crisis is increasingly global and requires a global response” – seems to have been given very little media coverage. At least I haven’t seen much. So I think that we may be getting the flavour – maybe the reality? – of the domestic Keynesianism that, if Markwell’s book is right, is only a part of what Keynes was about, and not the international economic coordination and architecture that Keynes thought necessary. I hope I am wrong.

    Reply

  20. Franklin says:

    A hybrid of Bush III and Clinton III is fine by me, especially if Obama takes the best elements of both those presidencies.
    Bush III doesn’t have much to offer — Gates, Mueller, Sheila Bair, and perhaps there’s a role for someone like Patrick Fitzgerald.
    As far as Clinton goes, Obama probably won’t be pulling from Clinton 1992-1994, which was a pretty rough transition, but there’s a good talent pool to draw on.
    I don’t have a strong opinion as far as Summers goes — probably lean towards a more favorable side, although his nomination might cause Obama some grief from parts of the left.
    As far as labor is concerned, I think they’d be very happy if David Bonior needs to get the nod as Labor Secretary. More than personnel, I think its top priority will be getting EFCA passed.
    As far as free-trade versus protectionism goes, I suspect the administration will strike the right balance. In the press conference today, Obama phrased this in the right way in reference to tax-policy — which approach leads to optimal job creation and economic growth. He’s taking a pragmatic, non-ideological approach — I’m sure that there will be a lively debate within the administration and with Congress on the best way forward.

    Reply

  21. Arthur James says:

    At his news conference, Barack Obama explicitly said “We must also remember that the financial crisis is increasingly global and requires a global response.” So I think we can be confident that he understands, at least to some extent, what Laura Harrison and I appear to agree on – the need for international economic cooperation in the spirit of Keynes (as the Markwell book helps us understand it). Presumably the grey suits of economic advisers Obama was surrounded with share this commitment. I notice that Timothy Geithner was not one of them – but perhaps, given his present role, it would not have been appropriate for him to have been there? It’s also still not clear how the battle between free trade and protectionism will work out.

    Reply

  22. Laura Harrison says:

    I didn’t mean to impugn Timothy Geithner, and I readily accept Arthur James’ point that his credentials suggest that he does understand the importance of the US providing constructive leadership in international economic cooperation of the kind we so clearly need. But I was startled by Steve Clemons’ assertion (the meaning of which is unclear, and for which no evidence is presented) that Geithner is probably the closest thing we have to a modern John Maynard Keynes. For me, this must involve (as Markwell’s book proves beyond doubt) a deep commitment to international economic leadership and cooperation. Who else has this? I am hoping that anyone Barack Obama would seriously consider appointing in his administration does! Whether Larry Summers should go back to Treasury is another question, but I think he “gets” what is needed for the US to provide economic policy leadership in a globalised economy. So much of the current talk, however, is about national policy, and too little is about international action (notwithstanding the global economic summit to be held next week), that it is hard to tell. This is the case even wit economists who should know better, like Paul Krugman, Joseph Stiglitz, Jeffrey Sachs, and others. Barack Obama should make commitment to internaitonal economic cooperation a test for any appointment in his economic or foreign policy team. This is certainly in the US national interest, as well as the interests of the world economy as a whole. In fact, as Markwell’s book also shows that Keynes believed, economic circumstances and policies have an enormous impact on the prospects of war and peace – so success in international economic diplomacy is likely to be crucial to overall foreign policy success for the new administration.

    Reply

  23. Arthur James says:

    Laura Harrison’s statement that Timothy Geithner is no John Maynard Keynes if he doesn’t understand the importance of international economic cooperation is surely right. Certainly the Markwell book on Keynes and international economic (and political) relations makes this clear. But why does she seem to assume that Geithner does not understand the importance of international economic cooperation? With Geithner’s history – international education, studying international economics and international relations, working for the International Monetary Fund (of which Keynes was of course one of the founders), working for the Council on Foreign Relations, etc – it is highly likely that he will well and truly understand the importance of international coordination of key economic policies (e.g. fiscal or monetary stimulatory measures) and of strong and appropriate international economic institutions (such as a not-too-grandmotherly IMF). Maybe Geithner will understand this better than anyone else who is spoken of as a possible Secretary of the Treasury. In advocating a domestic stimulus, but avoding next week’s first global economic summit of this crisis period, Barack Obama (though probably acting wisely on both fronts) risks being seen as insufficiently interested in the crucial international economic cooperation on which the success of US measures partly depends. Do his economic advisers, and do his foreign policy advisers, really understand this? Although I am not seeking to advocate his cause to be Treasury Secretary, I do hope that – given his background (see wikipedia) Timothy Geithner will be listened to with respect – and without Laura Harrison’s apparent assumption that he does not understand what we can learn from Keynes about the importance of international economic cooperation. Maybe she might put her blowtorch on the other names being mentioned for Secretary of the Treasury rather than just pick on one!?

    Reply

  24. eatbees says:

    Steve, thanks for leading the charge to take a look beyond
    Summers for the all-important Treasury post. I’d be interested to
    know who you think some of the best people are, outside the ones
    commonly mentioned as front-runners?

    Reply

  25. Tiintin says:

    From the Israel Policy Forum:
    “Printer Friendly Version
    The New President and Israel
    It was quite an election night, and quite an election.
    The Jewish vote went 78 percent for Barack Obama. It is now
    safe to say that, after 80 years of consistently voting Democratic
    for President, the Jewish vote is no less predictable than the
    African-American vote or the vote of union households. Jews
    are, as the old phrase goes,“yellow dog Democrats.” It is almost
    odd that a community that is so fragmented on so many issues
    stands pretty much as one every four years.
    Accordingly, the scare tactics that worked so well against Obama
    during the Democratic primaries flopped in the general election.
    The Republican Jewish Coalition, which wasted gazillions on
    race-mongering, might as well close shop. If a relatively
    moderate Republican nominee cannot break above 22 percent
    after six months of lying e-mails alleging that the Democrat is a
    Middle Eastern terrorist, it is safe to say that the Jewish
    Republican ship will never come in. 
    Jewish Americans are liberals. Period. Few vote based on Middle
    East issues but rather on the same issues other Americans do.
    There are some differences. Jews are more concerned about the
    separation of church and state, more anti-war (Iraq and Iran),
    more pro-choice, more supportive of gay rights, and far more
    willing to pay higher taxes to support government services.
    I don’t write this to pat Jews on the back. It is simply to say that
    Jews have not forgotten that we are a tiny minority and that, not
    long ago, we depended on American progressive government to
    help us get on our feet. The Torah tells us: “Remember, you
    were slaves in Egypt.” And “do not separate yourself from the
    community.”
    And that is why Jews living in mansions in Beverly Hills vote the
    same as Jews in apartments in Co-op City in the Bronx.
    This is not going to change.
    One of the effects of the Obama sweep of the Jewish community
    is that it frees him to aggressively pursue Israeli-Palestinian
    peace. Obama has the support of the Jewish community. It will
    support him with even more enthusiasm (if that is possible) if he
    returns America to the role of “honest broker” in the Middle
    East.
    The precedent is Bill Clinton. Jewish-American voters supported
    him overwhelmingly in 1992. Less than a year later, they
    strongly backed him when he decided to embrace the Oslo
    approach and to invite Yitzhak Rabin and Yasir Arafat to sign
    their agreement on the White House lawn.
    To be honest, George W. Bush did not have the same latitude
    Clinton had. If he had played the role of honest broker (and not
    allowed neocon staffers to subvert his policies) he would have
    been attacked by Democrats in Congress for “selling out” Israel.
    Why? Because Bush is a Republican. And the most influential
    supporters of the Likud line on Capitol Hill are Democrats. With
    a fellow Democrat in the White House, they will think twice
    before jeopardizing their ability to “deliver” for themselves or
    their constituents by choosing grandstanding about Israel over
    supporting their president’s efforts at diplomacy.
    The bottom line then is that Barack Obama is in a stronger
    position to do the right thing in the Middle East than any
    previous president. American Jews are in his corner and Arabs
    think that, by definition, he cannot hold hostile views toward
    them. And he doesn’t. A guy with a Muslim father is not capable
    of race-based bigotry against Muslims and Arabs.
    One more thing. The Jewish community has changed. In 1993,
    when Yitzhak Rabin decided to pursue peace with the
    Palestinians, he asked his American friends to form a new
    organization to support him. He did not trust AIPAC to back the
    peace process with any enthusiasm, believing it was too vested
    in the Arab-Israeli conflict. With typical astuteness, he said that
    a new organization was needed to “provide cover” to President
    Clinton and help him counter the attacks from the Jewish right.
    As a result, we founded Israel Policy Forum. We strongly
    supported Clinton’s (and Rabin’s) efforts. When George W. Bush
    finally pushed for diplomacy, we supported him too. (It is no
    coincidence that President Clinton’s blueprint for Middle East
    peace was delivered at our annual dinner just before he left the
    White House.)
    We offer the same support to President Obama. The good news
    is that he won’t need it as much as President Clinton did. In
    1993, it was considered the height of audacity to support
    Palestinian statehood. Those days are gone. On top of that, IPF
    is no longer alone in backingthe exchange of the occupied
    territories for  peace and security. There are a host of Jewish
    organizations engaged in these efforts now and we are regularly
    joined by Christian and Arab-American groups as well.
    President Obama is going to pursue the peace process, just as
    President Clinton did. The only question is when. My
    recommendation is that he does so immediately, because the
    more time that passes the less leverage a president tends to
    have. (That is why the usual “pro-Israel” suspects in Washington
    will tell him to go slowly. They don’t want a successful result, so
    they prefer deferring Obama’s engagement until he has less of
    the “juice” he needs to put over an agreement).
    Obama should recall what our most (domestically) successful
    modern president, Lyndon Baines Johnson said:
    “You’ve got to give it all you can, that first year. It doesn’t
    matter what kind of a majority you come in with. You’ve got just
    one year when [Congress] treats you right, and before they start
    worrying about themselves.”
    In January 1965, at the beginning of his four-year term and at
    the pinnacle of his popularity, he told top administration
    officials: “I was just elected President by the biggest popular
    margin in the history of the country . . . because Barry
    Goldwater had simply scared hell out of them. I’ve already lost
    about three of those sixteen. After a fight with Congress or
    something else, I’ll lose another couple of million. I could be
    down to 8 million in a couple of months.”
    So what did he do? Within one year—by the summer of 1965—he
    achieved passage of the Civil Rights Act of 1964, the Voting
    Rights Act of 1965, Medicare, the Elementary and Secondary
    Education Acts, and a host of other laws that utterly transformed
    America, and not coincidentally, made Barack Obama’s election
    possible.
    It was a good thing that Johnson didn’t wait because, by 1966,
    his ill-fated Vietnam policies had eroded his popularity and his
    Congressional majorities. When he told Israeli Prime Minister
    Levi Eshkol, right after the 1967 Six Day War, that Israel would
    have to decide if it wanted peace or the West Bank, Eshkol
    ignored him. But those LBJ laws from the first year after his
    election will be with us—thank God—forever.
    That’s the model. And, one more thing, compared to the rest of
    the problems Obama faces, achieving an Israeli-Palestinian
    agreement is picking the low-hanging fruit. The Taba
    Agreement of January 2001 takes us 99% of the way there.
    As far as confronting the supposedly all-powerful lobby, Obama
    should not worry. Even if it does not like what he is proposing, it
    will not take on a popular Democratic president. 
    The lobby wants the president to believe that it can successfully
    challenge, and overturn, policies it does not like. It can’t. It’s just
    a bluff. That is why when President Reagan recognized the PLO
    and when President Clinton made Arafat his negotiating partner,
    the lobby simply went along. 
    Unless a policy threatens Israel’s physical security—and no
    president would propose that—the president will prevail. The
    American Jewish community is not going to the barricades over
    exclusive Israeli control of Jerusalem, over the West Bank, and
    certainly not over settlements beyond the Green Line. In the
    relationship between the President of the United States and a
    lobby, all the cards—all 52—are held by the president. Especially
    this one.
    All it takes is will.” 
     

    Reply

  26. ... says:

    America the Beautiful, The Strong and The Free.
    >>The United States total public debt, commonly called the national debt, or U.S. government debt, is the amount of money owed by the United States federal government to holders of U.S. debt instruments. Debt held by the public is all federal debt held by states, corporations, individuals, and foreign governments, but does not include intragovernmental debt obligations or debt held in the Social Security Trust Fund. Types of securities held by the public include, but are not limited to, Treasury Bills, Notes, Bonds, TIPS, United States Savings Bonds, and State and Local Government Series securities.[1]
    On 30 September 2008, the total U.S. federal debt passed the $10 trillion mark for the first time[2], with about $32,895 per capita (that is, per U.S. resident). Of this amount, debt held by the public was roughly $5.3 trillion.[3] Adding unfunded Medicaid, Social Security, Medicare, and similar obligations, this figure rises to a total of $59.1 trillion, or $516,348 per household.[4] In 2007, the public debt was 36.9 percent of GDP [5], with a total debt of 65.5 percent of GDP.[6] The CIA ranked the total percentage as 27th in the world.[7]
    Public debt is the amount owed by the government to its creditors, whether they are nationals or foreigners. External debt is the debt of all sectors of the economy (public and private), owed to foreigners. In the U.S., foreign ownership of the public debt is a significant part of the nation’s external debt. The Bureau of the Public Debt, a division of the United States Department of the Treasury, calculates the amount of money owed by the national government on a daily basis.[8][9][10][11]
    The total debt has increased over $500 billion each year since FY 2003, considering both budgeted and non-budgeted spending.[12] The annual US budget deficit declined from $318 billion in 2005 to $162 billion in 2007,[13] but increased to $455 billion in 2008.[14]Since FY 2002, the deficit reported by the media has been significantly less than the annual change in the debt, which surpassed $1 trillion for the first time in FY 2008.[15]
    The Government Accountability Office (GAO), Office of Management and Budget (OMB) and the U.S. Treasury Department have warned that debt levels will increase dramatically relative to historical levels, due primarily to mandatory expenditures for programs such as Medicare, Medicaid, Social Security and interest. Mandatory expenditures are projected to exceed federal tax revenues sometime between 2030 and 2040 if reforms are not undertaken. Further, benefits under entitlement programs will exceed government income by over $40 trillion over the next 75 years.[16] The severity of the measures necessary to address this challenge increases the longer such changes are delayed. These organizations have stated that the government’s current fiscal path is “unsustainable.”[17]
    http://en.wikipedia.org/wiki/United_States_public_debt

    Reply

  27. Joe M. says:

    http://news.yahoo.com/s/mcb_jerusalem/20081107/wl_mcb_jerusalem/obamahoneymoonoverinarabworld
    The appointment has already sparked some grumbling in the Arab world, but Emanuel’s father threw fuel on the fire with his remarks to the Israeli media.
    “Obviously he will influence the president to be pro-Israel,” Dr. Benjamin Emanuel was quoted as saying. “Why wouldn’t he be? What is he, an Arab? He’s not going to clean the floors of the White House.”

    Reply

  28. tintin says:

    From MJ Rosenberg who knows a thing or two about Israel and
    the conflict:
    “Before the netroots starts attacking Emanuel as an AIPAC
    stooge, Likudnik, or whatever, let me weigh in.
    It’s not true. His father is an Israeli and was active in the Irgun,
    the terrorist group founded by Menachem Begin which famously
    bombed Jerusalem’s King David Hotel.
    I don’t know what the old man’s politics on Israel are today (not
    all Irgunists were rightwingers). I suspect that, if he was still a
    rightwinger, he would not have produced a bunch of liberal kids.
    (Rahm’s brother, the Jeremy Piven one, writes often on HuffPo
    and is a total Hollywood liberal).
    Anyway, what I know about Emanuel on Israel is that he was a
    key player in getting President Clinton to embrace Oslo and to
    hold the Rabin-Arafat signing ceremony. I remember standing
    on the lawn and watching George Stephanopoulos and Rahm
    Emanuel all teary over “the handshake.”
    As a Member of Congress, Emanuel was not all that hawkish
    either. He supports Israel (so do I) but he definitely supports the
    peace process too. My guess: he’ll be the one encouraging
    Obama to go for an Israeli-Palestinian deal the first year. And,
    when the rightwing Jews complain, he’ll tell them to stick it up
    their ass.
    And they will.”

    Reply

  29. erichwwk says:

    “Predicting” recessions is not as important as recognizing the importance of the money supply, and the dire consequences from mucking it up. What matters most to me, is when a policy decision must be made whether to return money to its neutral position (Milton Friedman was dead on in his “Optimum Quantity of Money”), or to use that shock as an opportunity to skim, what choice is made. Are we fair to all, or do we look out to our friends first? When we give $10B to GS, and they give away even more than that to their friends in $3M chunks, its pretty clear whose interests are being represented. And where Congress stands by not inserting a clause denying that use.
    http://tinyurl.com/6cqew3
    I can’t touch $100K in a MMKT of purely ST Treasury bills (longest redemption date is Dec. 11, 2008) because of its connection to the Reserve Fund’s other exposure to Lehman Bros, its pretty clear to me that Paulson has little interest in MY providing liquidity to others at ZERO taxpayer cost, and has interest in primarily in looking after his own, and making off with as much silverware as possible while he still can.
    I hope Wigwag is right in his balance of power paradigm, although Stiglitz would be my choice. I also wouldn’t put too much weight on Roubini’s prediction record- like earthquakes and volcanoes, it is still hard to know just when forces play out. That does not diminish the value of understanding the forces involved.
    I share Wigwag’s concern that this election may have been for naught. While Obama is clearly more intelligent and articulate (and more compassionate and fair?)
    , he holds pretty conservative views. His foreign policy seems to me marginally different from McCain’s, and I see no real difference in shifting military force as a solution from Iraq to Afghanistan. Gates is hopefully not on ANY list.

    Reply

  30. Dan Kervick says:

    The Clinton administration was in power for eight years, and the last Democratic administration before the Clinton administration ended in 1980. That means that almost every still-viable Democrat with executive branch experience is connected with the Clinton administration somehow. That’s a fact of life. Obviously we are going to see plenty of Clinton folks back in power.
    On the other hand, this is no time to be staging the Last Ride of the Old Guard of the Third Way. There are a lot of very, very powerful and well-connected people from the declining neoliberal elite who are making their public plays for a return to power, and many of them need to be resisted strongly. They have a lot of advantages: They have built in public relations networks. They have a lot of buddies at the New York Times, Washington Post, NPR, the leading broadcast networks and the major weeklies. So opposing them requires getting the information out to the progressive base and mobilizing opposition.
    I don’t even want to think about all the IOU’s that Obama had to issue to defeat Clinton and then McCain. I’m guessing Emmanuel was one such IOU. Hopefully, he has not sold off too many shares of his administration.

    Reply

  31. PissedOffAmerican says:

    I supported Obama as my feeble effort to keep McCain and the abominable snowlady out of office. Period.
    But as I’ve said here a thousand times before, the media that created Obama is the same media that was complicit with the Bush Administration in bringing this nation to its current low. One does not raise billions of dollars, purchase the marketing power of the media, and rise to the Presidency by truly intending to rock the status quo.
    Yes, the name has changed, the White House is going to have a new occupant. But the same powers hold the lease, and collect the rent.
    But at least we’ll go back to torturing enemies behind closed doors, instead of proudly advertising what we’ve become.

    Reply

  32. Julian says:

    This looks like Regime Change: Lipstick on a Pig Edition

    Reply

  33. PissedOffAmerican says:

    “Anyone else think that comment by “America Joe” should be flagged and deleted?”
    Don’t listen to Mark Levin, Savage, Hannity, or Limbaugh, do ya? This “American Joe” jackass is one of their constructs. Daily, they nurture these wackjobs, play to their fears and hatreds.

    Reply

  34. DeeDee says:

    What about Stiglitz?

    Reply

  35. Matt says:

    Anyone else think that comment by “America Joe” should be flagged and deleted?

    Reply

  36. TA says:

    I am sorry to see Volcker not getting more recognition for a possible role that he is perfectly suited to.
    Yes, he’s no longer young, but he’s been prescient about the financial crisis, unlike many on the shortlist, and he’s addressed a crisis of nearly-equal magnitude already. Many people found his solutions painful, but they worked magnificently.

    Reply

  37. WigWag says:

    “The American economy lost another 240,000 jobs in October, the government reported Friday morning, the 10th consecutive monthly decline and a clear signal that an accelerating slowdown is assailing households and businesses.
    The unemployment rate climbed to 6.5 percent , the highest level since 1994 and up from 6.1 percent the month before.” (From today’s NYT)
    Truth is it probably doesn’t matter very much whether Obama selects Summers, Rubin or Geithner; they are clones of each other and they are all up to the job.
    Sheila Bair gets good press, but she has done nothing to indicate that she is up to the job. Her performance on the Wachovia sale to Citibank and then Wells Fargo was awful. She’s been an adequate regulator, that’s it. Giving good interviews to reporters at CNBC doesn’t qualify anyone to be Secretary of the Treasury. If Obama selects two Republicans, Bear for Treasury and Gates for Defense, why did we bother to elect a Democratic President?
    And I see from reading this thread that alot of people like Roubini. There’s no question that he’s smart and that his blog is a great read. There’s no question that he predicted that we would be in the mess we’re now in, months before it happened. But if you’ve followed Roubini for any length of time, you know that he’s predicted 5 of the last 2 recessions.
    Obama will select one of the neoliberals for Treasury to reassure Wall Street and then surround them with progressive economists at the SEC, the FTC, the Antitrust Division of the DOJ, the Department of Labor, the President’s Council of Economic Advisors, etc.
    This strategy worked splendidly in the 1990s. It will work again.

    Reply

  38. erichwwk says:

    What bothers me most about Summers and Rubin is their inability to have recognized the extent to which investment banks were creating (leveraging) money. As others have noted folks such as Roubini (a Minsky student)and Auerback (see his paper on Knight’s difference between risk and uncertainy, posted at the JPRI which Steve Clemons directs w/ Chalmers Johnson over a year ago)were pretty out front on the coming crisis.
    To get a sense of how “voodoo” supply side economics is, watch this clip from 2 years ago of Arthur Laffer (of “Laffer curve” fame, first drawn on a napkin for Donald Rumsfeld and Dick Cheney, and a major economist for Ronald Reagan) and Peter Schiff (Ron Paul’s main economics campaign adviser).
    http://www.youtube.com/watch?v=IU6PamCQ6zw
    I see some of that in both Summers and Rubin.
    Along that line I am flabbergasted that Gary Becker and Richard Posner excuse the inability to recognize the debt/recession problem by appeal to Roberta Wohlstetter’s RAND paper on Pearl harbor, attempting to paint that event as “hard to see” due to noise. see their blog for that preposterous position.

    Reply

  39. DeeDee says:

    Steve- If you contend that there are “more and better choices”,
    would you care to throw a few names out there? Thanks.

    Reply

  40. Laura Harrison says:

    What does it mean that Geithner is the nearest thing there is to another John Maynard Keynes? I’ve heard this said of Paul Krugman, and Joseph Stiglitz. Does Geithner really understand the importance of international coordination of economic policies, and of developing effective international economic institutions, both for collective self-help through a crisis and for helping to manage the world economy (yes, it needs it) even in ‘good times’? If he doesn’t, then he is no successor of John Maynard Keynes. Donald Markwell’s book on Keynes and internaitonal economic relations sets out what Keynes thought and why. It is to be hoped that all Barack Obama’s economic and foreign policy advisers are listening to British Prime Minister Gordon Brown on the need for internaitonal economicx cooperation today, and that President Obama provides the US leadership that is essential for this.

    Reply

  41. America Joe says:

    Well, America. Everyone told you Obamasama was the most corrupt enemy lie that’s ever attacked your country from within, but you didn’t believe us. You believed the marketing hype and internet blog trolls. You believed the lie and gave it a free benefit of the doubt as it laughed at you and smiled its big smile. NOW you’re actually finding out for real, and it hates you and wants you dead.
    The only way to repair an evil dog, is to kill it good and dead.
    You know it. Everybody knows it.
    Get it done, America, or someone else will have to come into America to get it done for you, and you know it.
    America the Beautiful, The Strong and The Free.
    Not america the embarrassment, the weak and the dead.

    Reply

  42. rich says:

    President-Elect Barack Obama just named his Economic Transition Advisory Board.
    And, naturally, it’s much broader than just a pick or two from the usual suspects. Regardless of the eventual pick at Treasury, Obama’s not settling for one guy, even from his own short list of preferences, whether that be Buffett or Summers. A good sign that should allay, at least, some doubts. I’ve believe Obama’s judgment isn’t flawed, and it pays to give him the benefit of the doubt, considering what he’s accomplished.
    David Bonior (Member House of Representatives 1977-2003)
    · Warren Buffett (Chairman and CEO, Berkshire Hathaway)-will participate via speakerphone
    · Roel Campos (former SEC Commissioner)
    · William Daley (Chairman of the Midwest, JP Morgan Chase; Former Secretary, U.S. Dept of Commerce, 1997-2000)
    · William Donaldson (Former Chairman of the SEC 2003-2005)
    · Roger Ferguson (President and CEO, TIAA-CREF and former Vice Chairman of the Board of Governors of the Federal Reserve)
    · Jennifer Granholm (Governor, State of Michigan)
    · Anne Mulcahy (Chairman and CEO, Xerox)
    · Richard Parsons (Chairman of the Board, Time Warner)
    · Penny Pritzker (CEO, Classic Residence by Hyatt)
    · Robert Reich (University of California, Berkeley; Former Secretary, U.S. Dept of Labor, 1993-1997)
    · Robert Rubin (Chairman and Director of the Executive Committee, Citigroup; Former Secretary, U.S. Dept of Treasury, 1995-1999)
    · Eric Schmidt (Chairman and CEO, Google)
    · Lawrence Summers (Harvard University; Managing Director, D.E. Shaw; Former Secretary, U.S. Dept of Treasury, 1999-2001)
    · Laura Tyson (Haas School of Business, University of California, Berkeley; Former Chairman, National Economic Council, 1995-1996; Former Chairman, President’s Council of Economic Advisors, 1993-1995)
    · Antonio Villaraigosa (Mayor, City of Los Angeles)
    · Paul Volcker (Former Chairman, U.S. Federal Reserve 1979-1987)

    Reply

  43. ... says:

    americans would be doing themselves a big favour if they remained neutral on others affairs and keep a distance towards influencing international affairs, however difficult it is to do that.. however skewed the present system is, that is something to move towards…
    as for the financial dynamics and any of these puppets who get to appear like they are pulling a few strings, the reverse is the case.. they are having their strings pulled.. the sooner more folks wake up to that, the less time they will be wishing one or the other puppet was on stage..

    Reply

  44. Carroll says:

    Well one thing is for sure….with Rahm standing guard Obama will never see any public comments that come into the WH except the ones that urge him to favor Israel and no one except Lukid Israelis will get a hearing in the Oval office.
    It will interesting to see how Americans respond to Obama’s liberal inter/vention/nationalism…while they are still suffering at home from criminal capitalism.
    Will they eventually be even madder than they were at Bush? Probably. The higher the expectations the shorter the fuse of the public.
    But that’s good, I have enjoyed seeing the death of the republican party and I fully expect to watch the death of the democratic party as well. Maybe after another 4 years we may get a real American party.

    Reply

  45. rich says:

    wigwag,
    Looks like you’re having a conversation with yourself again.
    I disagree that Clinton can be credited with the country’s economic performance. Can any president? I disagree Clinton can be let off the hook for the deregulatory fetish that got us into the current financial crisis. He abetted the same folks George Bush abetted.
    At the same time, I have no doubt many of Clinton’s policies were economically sound and had a positive benefit. So what?
    Everyone knows there were winners and losers under these free trade agreements, in every country. That does not mean there was a net benefit to the economy. That does not mean anything was done to retain productive jobs, or keep critical industries. It was irresponsible to believe any of them were expendable, or that you don’t really need substantively productive activity to remain competitive in the global economy. You’d have to be refuse to read newspapers or live in a dream world or inside certain quarters within DC to pretend NAFTA didn’t cost US jobs and do lasting damage to our overall economy. Unless you think credit card debt and skyrocketing home values (more debt) alone can prop up an entire economy.
    Clinton’s sane policies can’t balance his bankrupt embrace of unrestrained ‘free trade’. Even Hillary Clinton ran away from NAFTA. Less than honestly, but still, she ran away as fast as she could. And no one, but no one, was fooled.

    Reply

  46. rich says:

    arthurdecco,
    I wrote that “Emanuel MAY be the perfect CoS to … help coordinate a breakthrough”—IF he’s willing to pull a Sistah Souljah move on unaccountable extremists in Israel. Much as Bill Clinton did it to prove his own credibility.
    I guess the counter-example is Nixon going to China. So who knows, maybe Rahm will help Obama go to Iran.
    I’m under no illusions Emanuel is actualy interested in resolving the Israel-Palestinian problem. He’ll have to prove it to Americans as much as anybody else.
    I support the nation of Israel–and haven’t been comfortable with the continual broad-brush accusations here of Israeli control over American policy, though that relationship needs to be repaired and undue influence does exist.
    But such fears are all the more reason for Dr. Benjamin Emanuel to exercise some judgment when he speaks. Patronizing the President-Elect is not wise, it is an insult. Obama doesn’t need to be “influenced.”
    Worse, his outright assertion that Rahm Emanuel would be calling the shots–that Rahm would not be in a subordinate role to the President of the United States–is remarkably antithetical to everything we hold true about America as a nation. Rahm’s “not going to clean floors,” he “WILL influence the president and determine Obama’s policy “to be pro-Israel.”
    The overweening egotism of Dr. Benjamin Emanuel is worth noting for future reference. Not simply for his colorful and reckless displays as this administration’s Billy Carter–Carter was less rube-like and had better political judgment–but for the damage he’s inflicting to American maneuverablity and political space on the world stage.
    That’s hardly hyperbolae. Think about it:
    “What is he, an Arab? He’s not going to clean the floors of the White House.”
    Rahm Emanuel is too good to clean floors–but that’s all Arabs are good for, in Dr. Benjamin Emauel’s considered, enlightened opinion.
    Such an attitude isn’t just reflective of Israel’s economic relationship to Palestinian labor. It reinforces every accusation, confirmed in spades by George W. Bush, that the U.S. is for Israel and only Israel, and will never seek balance or justice or any fair resolution of the conflict. It continues the wholesale loss of American stature on the international stage.
    Note well, though: Dr. Benjamin Emanuel ably affirms the number one problem with Rahm Emanuel as Chief of Staff. Which is an inablity to refrain from making policy, rather than supporting and coordinating the ability of those who do make policy to implement those policies. It’s likely Rahm will not be able to differentiate those roles–even his father says so. CoS is a role of great power, but the inability to make those distinctions or know his place can wreak untold havoc. And for a young administration in a time of crisis . . .
    I’m happy to await Rahm’s performance and have him wield his best abilities, but this is the single biggest reservation I’ve had about him as CoS. Not regarding Israel, but about Rahm’s overreach in that role. It didn’t serve the Democratic Party well when Rahm substituted his own judgment for that of the electorate in seeking candidates to challenge sitting Repubs. My concern is we will see more of the same.

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  47. arthurdecco says:

    Posted by questions: “arthurdecco,Please don’t hold Rahm responsible for the sins of his father.”
    Spare me…
    Name one thing he’s done while an American government representative that enables the middle east peace process. One thing…One thing that discredits my bleak opinion of him.
    He’s a Zionist and it shows in almost every political move he makes.
    That should make you very afraid, if you love the ‘Ideals of America’ I see so much evidence of just now with the Dauphin, Obama, smugly ensconced.
    Questions, you’re almost always smart but like all of us there are times you need to give your head a shake. Hit the reset button. Get a good night’s sleep. Drink two bottles of wine. Swim naked in the ocean.
    I’m not holding Rahm responsible for the sins of his father, questions, I’m holding him responsible for his own sins. The fact that the sins of his father are some of his own sins is ultimately coincidental. What really matters is: what has he been personally responsible for in his tireless work as an advocate for Israel?
    And the indirect and disturbing answer to that is: Nothing constructive for America.

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  48. Carroll says:

    Going back to Emanuel and his father’s comments…and thinking about all the politicans who talk about their personal immigrant background and who talk about ‘our founders’ as if they actually had any American founders in their background or had even actually read what ‘our founders’ said about what was necessary for America to endure. Maybe some of the short timers who refer to themselves or Americans with a hyphen attached have at least heard of President Roosevelt.
    “”In the first place, we should insist that if the immigrant who comes here in good faith becomes an American and assimilates himself to us, he shall be treated on an exact equality with everyone else, for it is an outrage to discriminate against any such man because of creed, or birthplace, or origin.
    But this is predicated upon the person’s becoming in every facet an American, and nothing but an American…There can be no divided allegiance here.
    Any man who says he is an American, but something else also, isn’t an American at all. We have room for but one flag, the American flag… We have room for but one language here, and that is the English language… and we have room for but one sole loyalty and that is a loyalty to the American people.
    …..Theodore Roosevelt”
    I also read an interesting book recently…”Divided Loyalties: The American Revolution Comes to New York”..it was about the British loyalist vrs. the American patriots and revolutionaries in NY and what happen to the loyaltist who sided with the crown …and to those are tried to remain neutral, which didn’t work of course. Some of the loyalist left early of their own accord but the remaining were regarded as traitors and forced out of the country for fear of their lives.
    I await the hyphen-revolution…or the hyphen dissolution of America, whichever comes first.

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  49. viktor says:

    Steve,
    What can be done about this? I’m starting to really dislike Mr. Emanuel. I think this selection sends the wrong message on so many levels. The mid-east, the economic situation, etc.
    http://www.opensecrets.org/news/2008/11/obamas-pick-for-chief-of-staff.html

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  50. WigWag says:

    Rich, thanks for your comment, but there are these little things called facts that interfere with your thesis. During the Clinton Administration the economy experienced tremendous real growth and the lives of working people improved for the first time in 30 years. And there was no bubble that was consequential. It’s true that the explosion of the tech bubble hurt greedy and inexperienced young investors who were dumb enough to invest in the NSADAQ, but when the tech bubble burst, working people, value investors and the real economy were hardly affected at all. Economic growth during the Clinton Administration was extraordinary. To wit:
    1) When Clinton took office in January 1993 the Dow Jones Industrial Average was at 3,253. When Clinton left office in January, 2001 it was at 10,587. There was no bubble, the increase was earnings based. How do we know? The trailing price earnings ratio of the S&P 500 was 14 when Bill Clinton took office and 16 when he left.
    2) Millions of new families purchased homes during the Clinton Administration and home prices increased. But the increase in the price of an average home in real terms was the same as it had been in the previous 20 years. There was no housing bubble under Clinton. My source is Paul Krugman.
    3) When Clinton took office the unemployment rate was at 7.3 percent; when he left office it was at 4.1 percent. Unemployment rates for African Americans fell from 14.2 percent to 8 percent; unemployment for Latino Americans fell from 11.6 percent to 6.4 percent. I would be interested to know, Rich, what bubble you think accounted for this extraordinary decline in the unemployment rate.
    4) During the Clinton Administration, private sector jobs were added to the economy at an average of 245 thousand jobs per month. This is the best job creation record in the past 70 years.
    5) During the Clinton Presidency inflation (as measured by the core consumer price index) fell from 4.1 percent when Clinton took office to 2.0 percent when he left. During the eight years of his Presidency, inflation remained tamer than it had been since 1963.
    6) Under President Clinton, real wages went up 6.5 percent, after declining 4.3 percent during the Reagan and George H.W, Bush years. Real wage growth in Clinton’s second term averaged 2.6 percent — the largest average increase since the late 1960s.
    7)Although the term “neoliberal” is tossed around to criticize Clinton economic advisors, Clinton economic policy was not neo-liberal, it was progressive. It wasn’t just Bob Rubin and Larry Summers making economic policy. It was also Robert Reich and Laura D’Andrea Tyson and Joe Stiglitz. Clinton’s SEC Chairman, Arthur Levitt was widely regarded as the most outstanding and aggressive Chairman of the SEC since the first Chairman, William O Douglas.
    8) Bill Clinton appointed the most progressive members of Boards like the NLRB, OSHA and the Mine Safety and Health Administration of any President since Roosevelt. Don’t believe? Ask union leaders to tell you what they think.
    9) Antitrust enforcement during the Clinton years was vigorous. He increased the budgets of both the Federal Trade Commission and the Anti Trust Division of the Justice Department and his Administration brought more price fixing cases than Nixon, Ford, Carter, Reagan and George H.W. Bush combined. His DOJ scrutinized horizontal merger proposals vigorously. Most famously, the Clinton DOJ brought a major antitrust suit against Microsoft.
    10) President Clinton restored some measure of progressivity to the tax code. At great political cost to his Administration he proposed an increase in marginal rates for all income earners who made more than $80 thousand per year. His tax increase passed the Senate by one vote. By comparison, Obama’s plan to only raise marginal rates on income earners who make more than $250 thousand per year looks cowardly. There’s nothing neoliberal about raising taxes on upper middle class and rich taxpayers. The word for doing that is “progressive.” During the Clinton Administration income tax receipts went from 7.8 percent of GDP to 10.1 percent of GDP. The net result of all of this is a budget deficit that went from $290 billion when Clinton took office to a budget surplus of $233 billion when he left.
    And by the way, Rich, people who blame Clinton era banking deregulation for the problems we are having today, misunderstand the problems we are now confronting. Changes to Glass Stiegel (which would have been passed over Clinton’s veto) actually allowed investment banks that would have failed this year like Merrill Lynch to be purchased by Bank of America. The same change to the law allowed Chase to purchase J.P. Morgan a few years ago, thus preventing JP Morgan from experiencing the same fate as Lehman Brothers and Bear Stearns. Without the Clinton era changes to Glass Stiegel, these mergers would have been illegal and the financial sector would have collapsed. The modifications to banking regulations that took place under Clinton helped solve the current problem not exacerbate it.
    I know lots of people freak out at the prospect of comparing Obama to Clinton. But this isn’t based on fact, it’s based on emotion. How else do you explain the fact that so many people who don’t want Obama compared to Clinton are perfectly comfortable comparing Obama to Lincoln? Think that might be a little excessive?
    If Obama’s economic record ends up even half as good as Clinton’s we should be ecstatic.
    And, by the way, Clinton’s foreign policy was the most progressive and successful since Harry Truman instituted the Marshall Plan. Let’s keep our fingers crossed that Obama’s foreign policy is as similar to Clinton’s as possible.

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  51. questions says:

    arthurdecco,
    Please don’t hold Rahm responsible for the sins of his father. I’d hate to be held responsible for the views of large numbers of my family! The question in this kind of situation is whether or not the job candidate can do what needs to get done. Sometimes the insiders can work wonders, and sometimes it takes a Republican to do the work of the Dems and vice versa. Nixon started the EPA, Clinton ended welfare as we know it. Maybe Rahm’s pro-Israel stance allows him the space to push peace. I can’t promise anything. And as I noted above, one simply can’t push views onto people not ready for them. Justice moves glacially (that is, glacially BEFORE global warming).
    Now if it turns out that Rahm himself is this biased, then indeed he should exit.

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  52. arthurdecco says:

    From a post by rich Nov 06, 1:01PM
    “ANYONE who paid attention in high school history to the 1929 stock market crash and subsequent Great Depression damn well KNEW Summers & Rubin and their fellow deregulatory ideologues were taking this country for a ride on the road to ruin.”
    Convincing post, rich. All of it.
    Thanks.
    As for your later: Posted by rich Nov 06, 1:24PM
    “Even Rahm Emmanuel will likely do very well, and may be the perfect CoS to install enough credibility and real-world knowledge to help coordinate an breakthrough on the Israel-Palestine impasse.”
    I don’t think so.
    …Mr. Emmanuel coordinating a “breakthrough on the Israel-Palestine impasse”?!?!
    (…I realize the euphoria brought on by the McCain/Palin defeat may not have worn off yet…but how many glasses of wine did you have with lunch, rich?)
    And although you’ve addressed the issue of Mr. Emmanuel’s father’s vile racist remarks head-on, I still believe his comments should be reposted and reposted again. In a just and sane world, this story would be Rahm Emmanuel’s Career Ender – forget about becoming bag-man and door-keeper for the President of the United States!
    A man whose father thinks these thoughts and then has the arrogance and hubris to say them out loud to a reporter no less(!!!) – a man who fought for the IDF but not for the American military, and who continues to hold an Israeli passport shouldn’t be allowed within a hundred miles of the White House in these terrible times.
    Originally posted by Cee:
    Emanuel needs to explain the remarks of his father and Obama needs to dump him.
    From the Jerusalem Post:
    In an interview with Ma’ariv, Emanuel’s father, Dr. Benjamin Emanuel, said he was convinced that his son’s appointment would be good for Israel. “Obviously he will influence the president to be pro-Israel,” he was quoted as saying. “Why wouldn’t he be? What is he, an Arab? He’s not going to clean the floors of the White House.”
    Wow. My worst fears realized. And only18 hours after…
    My gawd, wots gonna happen tomorrow?

    Reply

  53. Carroll says:

    Well instead of my usual nit picking on all these people up for the Obama Adm…I am just going to go on gut feeling and that famous femine intitution….
    Obama’s entire demeanor has changed…his gestures have changed..his eye and mouth movements have changed. To me the (superfical, but still) change in Obama looks like a switch from campaign uniter to a ‘Don’. That might be good or bad.
    One thing he just said that struck me was that we shouldn’t expect many things to be solved in ‘one term’…hummmm…’one term’? One would think he would be thinking instead about actually getting things changed in one term…not about a second term at this point.
    How quick Obama acts on matters like Iraq and Israel-Pal will tell us if he is an American President or just another politican with a winning political machine.
    And yes it does look like a lot like Clinton II and Bush III so far. A little of Bush I on foreign policy wouldn’t be bad.
    But hius first appointments could be just the ‘starter wives’ or temp merry maids crew before the deep cleaners come in.
    Who knows?

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  54. rich says:

    erichwwk,
    Agreed on all points.
    Some of the discussion above does, I believe, work to influence Emanuel and whomever presides at Treasury, in the manner you suggest.
    Each may have expertise beyond my own, but a thoughtful read-through of the comments above would enable any humble appointee to avoid some critical mistakes (which they’ve been proven prone to make in the past) and balance competing priorities more effectively–without incurring sky-high political costs right at the outset.
    Whether they can summon the courage or have the judgement is another story.
    Again, not impressed with Dr. Benjamin Emanuel:
    “What is he, an Arab? He’s not going to clean the floors of the White House.”
    Ah, but it’s ok for an Arab to clean floors in the White House? Or floors in Jerusalem?
    Looks like Rahm’s first task as Chief of Staff will be to walk back his own father’s comments.
    Obama hasn’t even been inaugurated and he’s already got his very own Billy Carter to contend with, in the form of Dr. Benjamin Emanuel, albatross.

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  55. Matt says:

    Let’s hope not…but in fairness, he only got elected two days ago and his term hasn’t even started yet.
    Rahm Emanuel makes me very nervous – I fear he wants an eye for an eye and will guide politics down a “they did it so why can’s we” kind of road. He wouldn’t even let freshman representatives go on the Colbert Report.
    Also not a big fan of Larry Summers; he seems to have too many questionable things in his background.

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  56. rich says:

    wigwag’s got half the picture. Clinton presided over a bubble, based on false accounting and deregulation of the financial sector and job export under the ideological rubric of ‘free trade’, which has burst. After Clinton left office. The dot.com bubble went first, sure.
    And sure, Clinton did some things right. But let’s not pretend Clinton’s free-trade, deregulatory knee-jerk policies didn’t contribute to the current problem. They sure as hell did. Old Bill just isn’t around to pay the piper—even though he bought into and sold out on the same failed fiscal shenanigans that’re now sinking George Bush and the Republicans.
    Clinton had some competent people. Neoliberal, DLC economic ‘theory’ isn’t anything to crow about, even accounting for what it did right.
    Clinton’s glorious economy was just the false boom before the entirely predictable bust. Don’t think so? Ship some more jobs overseas, and keep subsidizine the completely uncompetitive strategies of GM and Ford, and see how far we take an economic dive.

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  57. erichwwk says:

    Steve seems to be privy to some excellent info, for a non-financial type. I find what he contributes to transparency in governmental intrusion into markets barely short of phenomenal. I often disagree with Steve on nuances, but continue to be amazed at his political tact,even temperament, quality of contacts, and his ability to advance the depth of the discussion.
    Can’t remember what talk show I heard this on (from a debate i missed?), but Clinton, Edwards, and Obama were asked who they thought MLK would have voted for. First two said “them”.
    Obama said none of the above, including him. MLK had his own agenda of fairness, dignity, economic and social justice, and would not be concerned with supporting any particular candidate. He would have stayed separate from that, and would have put his effort in influencing whatever candidate won in moving toward his positions.
    All of the candidates being considered have their defects (don’t all human beings?). Perhaps we too, can stay focused on the process we would like at Treasury, who should be included in discussions, and what some of the policy objectives might be. Then regardless of who is appointed, we can move policy in that direction. And if we get a Karl Rove type (which some are saying re. E.Rahm), or a John Bolton type, we are connected to a movement spearheaded by Steve that has a track record in thwarting that.

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  58. WigWag says:

    Bill Clinton gave working people the best economy since Kennedy. Real income for working people went up, inflation went down, employment growth accelerated and interest rates declined.
    When it came to the economy, Bill Clinton and his team were miracle workers.
    The more people from Clinton’s economic team that Obama selects, the better. Sure Clinton gave us NAFTA and, in retrospect he should have reversed the Reagan/Bush era deregulation mania more assertively.
    But over all, the only other President as talented at managing the economy in the past 100 years was Roosevelt.
    While those suffering from Clinton derangement syndrome may be too obtuse to see it, the more an Obama economic policy resembles the Clinton economic policy the better.
    Did you like rising real income for working people? Did you feel good about the deficit disappearing? Did you enjoy a stock market that tripled in value over eight years? Did you like a national savings rate that was going up instead of down? Did you like a President who supported unions instead of breaking them?
    If your answer to any of these questions is yes, you should be praying that Obama follows Clinton’s lead.
    Come to think of it, you don’t even have to pray. Between Podesta, Emanuel and all the other Clinton appointees on his transition team, it looks like Obama has already decided to make Bill Clinton his role model.

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  59. rich says:

    Cee & questions,
    Disturbing comment by Emanuel’s father.
    “What is he, an Arab? He’s not going to clean the floors of the White House.”
    Ah, but it’s ok for an Arab to clean floors in the White House? Or floors in Jerusalem?
    It’s an unbelievably damaging attitude that needs a quick and unmistakable end.
    Dr. Benjamin Emanuel may be speaking for Israeli consumption–may not believe what he’s saying–but it’s irresponsible to brag about who’s in control of what in another country. Full stop. I don’t buy into the paranoia, but there are limits.
    Second, there’s no way in hell Barack Obama needs lessons from Emanuel, or needs to be ‘influenced’ in order to be ‘pro-Israel.’ Obama already is pro-Israel, for all the right reasons.
    Given the right-wing Jewish terrorism gaining ground in Israel—I posted a comment on this, Steve, several weeks ago—I wouldn’t be surprised the Father is tamping down extremist paranoia. But that hardly lets him off the hook.
    But patronizing the President-Elect is uncalled for. And bragging about who’s running things is egotistical over-reach.
    We need the better Rahm—as Josh Marshall noted, a weak-willed CoS would be ridiculous. Republican spin has been absurd, though I know Obama will be the last guy to get suckered by it.

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  60. Will says:

    Shelia Bair, brilliant? This is the gal that has been day late and a dollar short to the financial crisis. Moreover, she was the fool that begged/arranged for Citi to bail out Wachovia only to turn around and offer the deal to Wells. The little legal scuffle that she ensued cost the market two weeks of insecurity (and billions of dollars). Brilliant she is most certainly not.
    What people is DC don’t realize is that Tim Geithner has been the one running the show. He, and the New York Fed have been the cool, collected folks that have stabilized this disaster. Though Obama doesn’t know him, he ought to get to know him pretty quickly. Given the way the markets have been performing since he was elected, Geithner is his best bet to restore some much needed confidence.
    Summers would be fine, but way too much baggage. You need a guy that Wall Street both respects and fears. Trust me on this one, Geithner is the guy.

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  61. questions says:

    Rich, you’ve put your finger right on the problem — insider experts know the territory but they’re corrupt. Outsiders know nothing but they’re not (yet) corrupt. Finding a non-corrupt expert is the goal. We have the same problem with the guys running the bailout — they all come from Goldman because they all know how the derivatives market really works. But then Goldman does well from the bailout.
    Re getting Roubini/Krugman and the like in, if they can craft policy and deal with administrative and political responsibilities, that’s fine — but the Peter Principle might weigh in here (Everyone rises to his own level of incompetence….) Maybe some academics should stay in the academy and post blogs. I don’t know.
    Cee, I got a note from an Israeli cousin congratulating me on Obama’s victory and hoping that the US would now just worry about its own problems and let Israel do its own thing. No way, no how, no 1-state solution with a Palestinian P.M. for Israel (my suggestion!). My cousin sees integration as the end of Israel as we know it and is terrified by the future exile of the Jewish people. Political culture and social feeling has to change before policy can change. So for now, Dr. Benjamin Emanuel is going to speak the way that he does. He’s Israeli-born and not ready for change. 47% of the US is still having some problems with the same kinds of issues. And at least 3 states passed referenda opposing gays and lesbians. When we’re ready for change, we’ll change.

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  62. leo says:

    In my opinion Summers is a good person who was set up (attacked) by an academic terrorist and abandoned by too many. It’s a sad story.

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  63. Cee says:

    Emanuel needs to explain the remarks of his father and Obama needs to dump him.
    From the Jerusalem Post:
    In an interview with Ma’ariv, Emanuel’s father, Dr. Benjamin Emanuel, said he was convinced that his son’s appointment would be good for Israel. “Obviously he will influence the president to be pro-Israel,” he was quoted as saying. “Why wouldn’t he be? What is he, an Arab? He’s not going to clean the floors of the White House.”

    Reply

  64. rich says:

    The intersection of Summers & Rahm Emanuel may be found here:
    http://blogs.cqpolitics.com/davidcorn/2008/11/is-rahm-emanuel-right-for-obam.html
    Corn nails one-half of the the pro/con Emanuel equation.
    As a partisan he’s hard-driving and effective, yet that’s may contradict the Obama message o inclusionary bipartisanship.
    As a New Democrat, Emanuel’s short on Change, preferring to shore up the status quo:
    “OpenSecrets reports that Emanuel was the “was the top House recipient in the 2008 election cycle of contributions from hedge funds, private equity firms and the larger securities/investment industry–not the most popular of industries in the current economy.”
    Right now, the last thing we need is someone heavily invested in letting Wall Street bad actors off the hook. On the other hand, Emanuel knows how the current system works, and may be well-positioned to make needed changes. He chooses wrong, he’ll hear about it.
    The DLC and its adherents fared poorly over the last 8 years. The Dem Establishment was unresponsive to public concerns over Bush’s overreach, abuse of power, and the Iraq War. Electoral results resoundingly rejected Rahm Emanuel’s status-quo-oriented conservatism regarding real change or reaping political capital.
    If Rahm Emanuel’s changed his stripes, I’m all for it. Which attribute Emanuel brings to the fore and how he approaches competing interests will make all the difference. If there’s no change of attitude, it’ll damage Obama and the nation. Happy to have him should he find a healthy balance.
    If his ties to the financial industry handcuff his ability to carry out reforms—again, see Malcolm Gladwell—we’re SOL.

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  65. daCascadian says:

    While browsing somewhere else (concerning the Treasury transition) it struck me that Summers would, IMO, be the perfect person to run the Office of Financial Stability. Knows the territory well and the larger environment is familiar. Also it would keep him busy & might keep his ego in some check.
    Just some thought process far away from the beltway pressures etc, very familiar with economics & the larger issues.
    [another instance of having to try multiple times due to the captcha device not knowing what is displaying - itza bug]
    “Economic history is a never-ending series of episodes based on falsehood and lies, not truths. It represents the path to big money. The object is to recognize the trend whose premise is false, ride that trend, and step off before it is discredited” – George Soros

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  66. downtown says:

    No matter whom Obama chooses as Sec. of Treasury, I fervently hope that he’ll enlist the counsel of some of those bright minds (Roubini, Stiglitz etc.) who’ve been predicting this economic crisis all along and have now been proven right. I would resent having the architects of the current disaster put back into positions of influence. There are very few people left on Wall Street untainted by this mess. Maybe the time has come to look elsewhere.

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  67. questions says:

    Summers is a/n (insert any of POA’s faves) troglodyte and shouldn’t be part of anything. Dollars and Sense Magazine hands out a Summers award each issue in honor of Summers’s comment that Africa as a continent is underpolluted with respect to a cost/benefit scheme. He’s got worse foot-in-mouth disease than Biden and the views he seems to hold are not really at one with the Obama spirit.
    That said, hiring from Clinton’s admin. makes a lot of sense. It’s the most recent dem admin and so these people actually know what to do aside from taking vacations in Texas the first few months. And Clinton people in a Clinton administration are not necessarily the same as Clinton people in an Obama administration. They will take their cues from Obama and from the very different economic and social situation we’re in.
    Whoever makes economic policy is going to have to ease Wall Street’s fears, be simultaneously populist, deal with inflation, deflation, trade, regional poverty, cuts in city budgets (Philly and NYC have scary announcements about budget problems). In short, this person will need to balance a wide range of legitimate concerns without favoring any one of them. Good luck to whatever fool takes the job! But please make sure that the basic issue of RESPECT for humanity and human suffering and struggle is there. Summers does not demonstrate that at all.

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  68. rich says:

    Agree with michael claussen.
    Even Rahm Emmanuel will likely do very well, and may be the perfect CoS to install enough credibility and real-world knowledge to help coordinate an breakthrough on the Israel-Palestine impasse.
    Happy to wait n see. But that cuts both ways: Rahm recruited pro-war Dem candidates at the expense of progressive (not ‘movement’) candidates more aligned with Obama’s position who were more likely to harvest political points at George Bush’s expense. At minimum, that concerted effort on Rahm’s part aimed to maintain the Dem Establishment/status quo–and was viewed as unacceptable by those who at least wanted new voices heard in the primary process. Emmanuel could’ve been more even-handed and change-oriented.
    Still too early to judge Obama’s game-changing or status-quo-enabling tilt. Clinton veterans’ll add stability in the transition, and may not weigh heavily in the administration.

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  69. Karl says:

    I don’t think Obama will pick Summers. He would face opposition due to his past and he’s not known as a very good listener which is what Obama wants.
    My bet, and hope is on Geithner. I think he’s one of the best economic minds we have. Summers would be better over at the Fed.

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  70. Hans Suter says:

    Steve, J.C., wait a minute, no ?

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  71. michael claussen says:

    Actually, I think that speculation on how to pigeon-hole the Obama administration is a bit premature. You would do better to contemplate your navel, at this point. Wish lists for xmas are accepted at this time, as long as you have been good little girls and boys (not a part of a neocon think tank, current administration or religious order that thinks it is ok to throw hand grenades while genuflecting or speaking in tongues).

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  72. Liz says:

    Thanks, Steve. One reason why I didn’t support Hillary Clinton during the primary was my fear that her administration would be a hybrid of George W Bush and Clinton’s foreign policies and Clinton III domestically. If Obama were to head in that direction, I would be very disappointed. It is only two days after the polls closed, so I am willing to wait about six months before I start dissecting, in my own under informed, but interested fashion, Obama’s new administration. I will be interested to read your blog and your insights as it develops.

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  73. rich says:

    JohnH,
    Summers may have much to contribute, but that doesn’t mean he’s the best choice at Treasury, meaning that he doesn’t have the intellectual agility and interpersonal openness to hear all comers. Conversing (with himself) about new viewpoints does not indicate any willingness to take action on new solutions. Until I see action, it’s lip service. Where on earth’s he been?
    Summers’ willingness to try and squelch Cornell West, of all people, indicts his ability to carry on a sufficiently broad conversation on economic solutions to repair the policies that he himself instituted. He didn’t look at broader national interests under Clinton, and he didn’t look at broader institutional interests at Harvard. What the hell’s he learned?
    I disagree that Summers is unconventional in the positive sense, or that his neoliberal prowess, such as it is, is a trump card. A critique internal to his ideology will not, I think, produce viable answers. No perspective. Again, read Gladwell at the link above.
    Josh @ TPM makes the same point:
    “And on top of that, the new Treasury Secretary will be charged with instituting a beefed up framework of financial sector regulation. But Summers was a key player in the 1990s deregulatory consensus that laid the groundwork for a lot of these problems. Not that that makes him verboten — a lot of other people did too.”
    Summers laid the deregulatory foundation that gutted the American economy. (or finished the job) To hand the keys of the Treasury Dept would compound the original error. He can contribute w/o controlling the entire administrative apparatus. We’re faced with instituting regulatory mechanisms to repair the damage that Rubin and Summers wrought.
    Summers, Rubin and Tom Friedman were unable and unwilling to listen to the many thousands of people who understood that WTO (in its institution and adjudication) was fundamentally undemocratic, and damaging to the overall national interest. And that NAFTA wholly ignored a long-held national consensus balancing national priorities in a way that the ‘free market’ could never acheive. An orderly pathway to free trade that accounted for national values and their costs (i.e., conservation goals, labor & environmental standards, social priorities) was obviously far preferable. Yet, were we heard? Uh-uh.
    Before readers jump to say, “What YOU know, anyway?”—let me point out one thing, and make NO mistake about it.
    ANYONE who paid attention in high school history to the 1929 stock market crash and subsequent Great Depression damn well KNEW Summers & Rubin and their fellow deregulatory ideologues were taking this country for a ride on the road to ruin.
    You DO NOT deregulate Wall Street (etc.) without inviting abuse and profiteering, without condemning the rest of the country to repeating history 1929-1939 (or 1945) and the large-scale financial disaster that came with those years.
    It was a freakin’ joke.
    For two years before Enron went down, you could pick up the major financial papers and read of their amazing new business model that ‘adds/finds value in energy trading’, despite it being a highly efficient sector. Every article concluded that “no one really knows how they make their money.”
    They didn’t produce anything. The dot-com bubble burst because they didn’t produce anything. The Wall Street hedge-fund junk-bond ‘bubble’ burst because ponzi schemes don’t produce anything. The inflated values of homes had to burst because it didn’t produce anything–it’s still the same house–and their owners weren’t producing anything either. Productive jobs had been exported by a ‘Free Trade’ ideology: and much of the remaining industry (think Ford & GM) conceded the market in fuel-efficient cars to reap subsidies on vehicles few wanted, could afford, or that externalized costs (i.e., SUVs, large trucks).
    I don’t see any reduction in the cost of living promised by the relentless free trade advocates. The default understanding is Summers stands in for just another set of special interests, at the expense of broader economic health and national well-being.
    The personnel, ideologues and agencies that created this crisis are ill-equipped to resolve it. This is a matter of common sense. To ignore that compounds the exclusionary process–poorly conducted public debate–that got us here.
    The average main street banker or plumber or high school history student (again, 1929 and the response) gets that. Gets it better than the too-smart lightweights who insisted they have their way in the 1990s.

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  74. ... says:

    the seeds of disillusion are held in the same hand as the ones for hope.. when you don’t pull them they overtake the ones you need to support… my main problem with any usa administration at this point is that the banking system is corrupt to the core and it is being overlooked still.. until americans and people around the world recognize the nature of the federal reserve and how it is like a spider with its web spread round the world, peace is going to be a long ways off…
    the faces may change but the underlying nature of greed has a very real face in the federal reserve and bank of england… to bad folks pay more attention to the bit players then to the underlying nature of these institutions..

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  75. simple simon says:

    An Irish friend of mine sent me an email in which he said: “Wouldn’t it be ironic if Obama was worse than Bush.” And, even though I was enthusiastic about Obama winning the presidency, I couldn’t really fault his logic.
    Mr.O has not got off to a great start.

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  76. J says:

    Actually, I think it is more useful to think of the Obama Administration as a hybrid of Clinton and George Herbert Walker Bush (the father). Particularly on foreign policy, Obama seems to draw on much of the realist thinking that animated folks like Brent Scowcroft and Colin Powell, senior advisors to the dad.

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  77. Zathras says:

    Henry Stimson — Secretary of War under in the Taft administration and then again under Franklin Roosevelt — is the precedent I’d prefer to Rumsfeld, since Stimson served Presidents facing more radically different situations, as today’s economic environment is different from that of the 1990s. Also, he did a better job.
    I admire Sheila Bair, a longtime Dole person, but as a Republican already serving in an important post I doubt she’d be Obama’s choice for Treasury. The new administration does not need ethical scandals in its first hires, which rules out Corzine. Paul Volcker is too old. I have no brief for any of the other candidates, but an Obama administration will need a strong Treasury Secretary, which Summers would certainly be.

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  78. Kathleen says:

    Obama is sure proving that the word CHANGE was just a public relations gimmick.
    How does choosing Summers reflect change?
    This guy was part of the team to be rid of Cornell West and blocked talk of divestment from Israel on Harvard’s campus.
    Will Obama choose anyone for any postition that represents real CHANGE.
    Not looking like it

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  79. Spunkmeyer says:

    Not to threadjack, but there’s also the less-discussed question of
    what happens in Congress. Will Lieberman be stripped of his
    committee chairmanships? Will anyone challenge Pelosi, Reid, et.
    al. for their spots? Just as the GOP Congress fundamentally
    changed the dynamic of the Clinton Administration, changes
    outside the Executive branch will limit or amplify its effectiveness.

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  80. JohnH says:

    Though Summers’ is not particulary polished politically, the man has a lot to contribute, much of it outside the box thinking not constrained by the conventional wisdom offered up by beltway politicians, stink tanks, and corporate punditocracy.
    I’d suggest that you read some of his opinion pieces before finalizing your judgement. Here are a couple samples:
    “A time when confidence is lagging in the household, financial and business sectors is not a time for government to step back. Well-designed policies are essential to support the economy and given the seriousness of healthcare, energy, education and inequality issues, can make a longer-term contribution as well.”
    http://www.ft.com/cms/s/0/290ca9f6-8d8b-11dd-83d5-0000779fd18c.html
    Summer is also very aware of the problems of globalisation, noting a “growing recognition by workers that what is good for the global economy and its business champions [is] not necessarily good for them, and that there [are] reasonable grounds for this belief…To benefit the interests of US citizens and command broad political support, US international economic policy will need to focus on the issues in which the largest number of Americans have the greatest stake. A decoupling of the interests of businesses and nations may be inevitable; a decoupling of international economic policies and the interests of American workers is not.”
    http://blogs.ft.com/wolfforum/2008/05/a-strategy-to-promote-healthy-globalisation/

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  81. rich says:

    Summers is notorious for being unable to listen to others, and that’s exactly what we don’t need right now. Tom Friedman has the same problem, on economic matters (WTO) and foreign affairs (Iraq).
    If the American debate for the next 8 years is short-circuited because the same neoliberal economists who got us into this mess are in positions of power, and continue their unwillingness to adjust their ideology based on the input of fellow citizens every bit as smart as they are, it’s going to be a long, long, downhill road. There will be no fix, no opportunity to repair what went wrong.
    That attitude eliminates precisely the most brilliant and productive aspects of the American approach: the best ideas aren’t going to come from the most obvious sources. The most effective leaders are those who recognize ‘em when they see ‘em. Obama can; Summer or Rubin? no way. The current fiscal mess indicates that the regulation and braking mechanisms many of us asked for, should’ve been heeded.
    Just one category of the unlikely sources of insight and effective ideas it takes, in the face of a blindered and self-congratulatory financial culture, to solve real problems:
    http://www.newyorker.com/reporting/2008/11/10/081110fa_fact_gladwell
    That said, I’m not worried Obama’s transition team is heavy with Clinton veterans. Clinton didn’t have a great start, and Obama needs folks who know the pitfalls of that transition (or know those who do) and can can anticipate and effectively counter unexpected but costly bumps in the process.

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  82. jc says:

    This seems a bit harsh.
    We all know that Obama will need people who can hit the ground running, and I’d expect this to limit his choices somewhat. There may not be a lot of folks clamoring for the job at Treasury considering the mess we’re in.
    I suspect that some of the people we’d all like to see in this administration won’t be available, but I have some faith that Obama will choose well given his options.

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