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Nov 23 2008

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From “Change” to Reality

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The transition teams assembled by President-elect Barack Obama began spreading out through the federal government this past week, the tangible nuts and bolts implementation of the peaceful transfer of power in the U.S.   Notional reports indicate that the teams are well organized, professional, very well informed on their subject matter and gracious.

The Federal government is simply huge, with an amalgam of departments, agencies, missions, cultures and agendas. To set up an organization designed to identify, research, quantify and eventually staff these entities is formidable. To do so in an organized fashion, under tight time pressure, with clear lines of authority and purpose is a significant achievement.

Hat tip to the Obama transition on this.

They clearly placed as much seriousness on potentially running the government as they did in winning the election, learning from past presidential history that if you get it wrong in the beginning, it becomes almost impossible to fix later.  The fabled Obama penchant for process is well demonstrated in the actual transition activities.

A hat tip as well to the Bush administration here, which, in recognizing the seriousness of both foreign and domestic issues, created a new standard of cooperation and openness in a transfer of power.

Beyond the mechanics of the transition, less can be said about the purported Cabinet picks.

Officially, we don’t know anything. Like the Great Oz, pronouncements emanate from behind the Obama green curtain, but not from the President-elect himself, at least not yet.

This is effective “trial-ballooning” to see where lurking political dangers may be, and to provide maximum flexibility to the President-elect while ostensibly showing progress on nominations. However, in a ferocious, information-greedy 24-7 news cycle, it also creates the appearance of Hamlet-esque indecision, amid the first signs that the tight lipped Obama campaign may be suffering from unplanned and uncontrollable leaks.

Broadly, top administration appointments are where the rubber meets the road on the candidate’s narrative; more important than the mechanics of the transition.

Personnel are policy, and for an incoming Administration that invested so much of its campaign message on change, this is where symbolism has to become real.

Obama seems to have hit the mark with two choices.

Eric Holder as Attorney General brings the symbolism of the first African-American as the top law enforcement officer in a nation with the history of “separate but equal” and Jim Crow, and the reassurance of a familiar face with broad Washington experience.  He will have to answer for his role in the Clinton Pardon bonanza in 2001, but there is little else in Holder’s record that would call his judgment into question.

Second, the choice of Timothy Geithner as Treasury Secretary demonstrates a canny understanding of the seriousness of the current financial crisis and the importance of continuity to some degree, combined with a fresh face of Obama’s generation.

Geithner was a Clinton official in the 90s and has been at his current post as head of the Federal Reserve for five years. He understands the world of arcane financial instruments that played a role in Wall Street’s meltdown. Moreover, he has been an integral part of the government’s effort to resolve the financial crisis since September, and brings both a measure of continuity and change at the same time to troubled markets.

With these two exceptions, the Obama trial balloons and actual picks are somewhat mystifying.

This journal has already covered the symbolic disconnect between the appointment of Rahm Emanuel as Chief of Staff and Obama’s message of post-partisan unity. If Emanuel is known for anything, it is his “take no prisoners” approach on partisan matters right up and through 2008. Yes, he is also known as an effective organizer, but does capability trump message here?

A better pick may have been former Senator Tom Daschle.  A fiery partisan in his day as Majority Leader of the Senate, Daschle has been away from Washington for the past four years after he was dispatched and humbled in a very close election in 2004. He would bring a 26 year career in both houses of Congress.  Surely someone who has run a Senate majority can run the White House.

But Obama is apparently sending him to the Department of Health and Human Services (HHS).  Daschle’s previous service on the Agriculture Committee seems poor preparation for a department that will have to implement any ambitious reform of health care that Obama campaigned on.

And what of Governor Janet Napolitano?  She is a capable governor of a border state and rising Democratic luminary, but there is nothing in her record to commend her for the Department of Homeland Security (DHS), except perhaps her early endorsement of Obama in January 2008. She is a lawyer by training who campaigned for AG of Arizona earlier in her career on consumer rights.

Other candidates that were (apparently) in the running offer more solid credentials and experience for DHS.  James Lee Witt won plaudits for his leadership at FEMA for Bill Clinton, and was later hired as an advisor to Louisiana, post-Katrina. Bill Bratton, Chief of Police for LA and earlier of NY has hands-on experience on first-responder crisis management that would seem more relevant to Homeland Security.

But these appointments pale in comparison to Obama’s apparent and mystifying choice for State.

Poor Bill Richardson, who would have been the symbolically powerful, qualified and experienced candidate, gets passed by and sent over to Commerce, which is tagged fairly or not, as the home for political hacks. Instead, Obama appears to be going with Senator Hillary Clinton. This journal has already discussed the lack of wisdom in the choice for both Obama and Clinton.

It is not that Mrs. Clinton is not a capable and formidable personality who will serve to the best of her ability. Rather, Obama is getting a Secretary who is as “new” to Washington as the Lincoln Memorial, ran to his right on foreign policy during the primaries and brings a bundle of avoidable conflicts, not the least of which is the former president of the United States.

It doesn’t help that she was one of the most polarizing political figures in recent American history, an example of the partisanship that Obama campaigned against.

Moreover, Clinton’s political heart is in domestic policy and health care. If it wasn’t seen as a second tier Cabinet post, Clinton belongs as Secretary of HHS where she can champion health care reform.  Better, she should stay in the Senate and lead the charge there.

Poor New Yorkers. You elected Clinton twice, but despite her organizational gifts and dedicated focus to underserved regions of upstate New York, it appears that the Senate seat really was only a stepping stone to the White House; something now beyond Clinton’s reach and therefore of little use. But it could be worse for you, but for evening of illicit pleasure, Elliot Spitzer could be nominating himself as Senator as her replacement.

Beyond the Clinton puzzle,  three other appointments should raise eyebrows.

Representative Raul Grijalva (D-AZ) is apparently in line as Interior Secretary.  An unknown to most of Washington, let alone America, to the extent that Interior and Homeland Security cooperate, Congressman Grijalva’s views on illegal immigration should make for interesting conversation.

The Congressman has said that today’s immigration rules are “cruel and unjust.”  He favors granting citizenship to all illegals currently in the US and expanding legal immigration into the country. He also opposed an Arizona ballot initiative that would require proof of citizenship before people were allowed to vote or obtain state benefits.  The initiative passed in 2004 by 56%.  He should be vetted carefully.

Perhaps this is more Washington inside baseball than reader’s desire, but the President-elect has hired Patrick Gospard as Political Director at the White House. A labor activist who worked with the Service Employees Union (SEIU), his office will now be signing off on Obama political appointments at other, lower levels of government, ensuring that organized labor will have a disproportionate, if less visible role in public policy.

One final appointment is that of Director of the Office of Management and Budget (OMB). Many consider OMB to be a thankless job, lacking the prestige of State or Treasury, or even some smaller, independent agencies. This mistaken belief belies OMB’s genuine power.

As the keeper of the budget and reviewer of government regulation, OMB has breathtaking power to shape policy that is unequaled and almost never recognized. Wise veterans of past Administrations will tell you that OMB is the most feared three letter acronym in the Federal vocabulary.

It has the power to choke initiatives, block program implementation and punish agencies, through use of the budget cycle, for perceived bad behavior.

Any legitimate review of policy shortcomings in Iraq between 2003-2005 deserve to start at OMB, which was more committed to ensuring adherence to its directives and circulars than in adapting federal policy to deal with the reconstruction challenges of Iraq. It is not a stretch to say that had today’s OMB existed in the late 1940s, there would never have been a successful Marshall Plan.

In any event, for this all powerful job, Obama has not chosen a Daschle, who understands the appropriations process or more seasoned veteran of the budget wars, but a youngish Peter Orsag whose primary career accomplishment has been to serve as Director of the Congressional Budget Office (CBO) for ten months. While Orsag has formidable intellectual credentials with a host of articles printed, and served a short term as an assistant to the Clinton administration’s National Economic Council (NEA), he seems in over his head for a job as consequential as Director of OMB.

All this said, Republicans should hold their fire for now. Viewed from today, Obama seems to be broadly forming a team of left-of-center pragmatists with previous government experience in most of the consequential jobs.

Geithner should reassure the markets (as his faux announcement apparently did) and pro-business and pro-growth officials should take solace that his voice will be consequential on the market impact of tax increases on capital gains and dividends, as well as Cap N’ Trade.

Bill Richardson at Commerce should be a boost to business as well. Richardson cut taxes to promote growth and business creation as governor. Forbes magazine credited Richardson for making Albuquerque the best city for business in 2006.  The libertarian Cato Institute called Richardson one of the most fiscally responsible Democrats in the nation.  The OAS named Richardson as “Hemispheric Ambassador” to promote a dialogue on immigration and free trade. Considering that Austin Goolsbee, the exiled staffer who had the temerity to question the logic of free trade agreements during the campaign, and was exiled as a result, is now at the NEC at the White House, there may yet be hope against thoughtless, union-inspired protectionism.

We’ll know for sure when the US Trade Representative pick is announced.

On the foreign policy front, as previously noted, Clinton ran to the right of Obama on Iran and other issues. If she is complemented with former General Jim Jones as National Security Advisor – a man who probably would have served had McCain been elected –  and with Bob Gates staying on at DoD, there will be a measure of stability and even continuity in core US foreign and national security policy.

Of course it is not perfect for the 57 million people who voted against Obama, but broadly speaking, for the team that lost the election, the incoming Obama administration seems potentially friendlier than we might have hoped or expected.

This may necessarily cause unease or even dismay among Obama’s core backers for whom his breathing version of change looks very old and very familiar, particularly the selection of Senator Clinton who, for many, defined the status quo.

For the rest of us, for whom Obama’s “change” meme was never more than a method of collectivizing individual aspiration that, by definition could never be fulfilled, we await the policy proposals the follow the nominations.

“Caveat emptor.”

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