Economic Calendar

Monday, November 17, 2008

Obama Cabinet Must Balance Gravitas, New Faces: Albert R. Hunt

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Commentary by Albert R. Hunt

Nov. 17 (Bloomberg) -- Barack Obama has had an almost perfect two weeks. He will make mistakes in the transition; everyone does. He especially needs to walk a delicate line as he forms a new government.

Since Nov. 4, though, his tone, balance, appointments, priorities and few policy actions have been on key. Small missteps, such as a careless remark abut Nancy Reagan, were rectified immediately.

It is striking how well prepared this political newcomer is. What John McCain called his arrogant presumptiveness during his campaign is turning into a valuable strength in the most dicey transition since 1932, one that didn't go well.

If he taps Hillary Clinton as his secretary of state, it will be a carefully considered choice.

On policy and politics, Obama has been collegial with the Bush administration without being collaborative. He is neither committing his administration to policies it may wish to change nor appearing to undercut the current administration.

Obama has talked to foreign leaders but has resisted entreaties to get involved in early policy direction.

Smartly, he is filling his White House staff before the Cabinet. Bill Clinton did it the other way and had a chaotic first two years. The White House staff is the engine that drives a presidency.

The selection of the tough, and sometimes combative, Chicago congressman, Rahm Emanuel, to be chief of staff was enlightened. Emanuel can deliver bad news, often with relish, understands the interplay of politics and policy as well as anybody in Washington, and knows how to play Congress.

Influential Figures

Fears of Emanuel achieving Karl Rove-type omnipotence are misplaced. He has a wider range of experience than Rove; there are other equally influential White House figures, including chief political strategist and Emanuel friend David Axelrod and Valerie Jarrett, the president-elect's close confidant; and, more than his predecessor, Obama, 47, is a secure and confident man who actively seeks a diverse set of views.

Still, the appointments over the next several weeks will establish the early persona of the Obama presidency.

Two dominant realities are in conflict. One, he promised change, not just from the Bush administration but from the ``decades of broken politics in Washington.'' He faces the most perilous situations of any new president since Franklin D. Roosevelt, with a financial crisis and two wars, conditions that demand experienced judgment.

He wants to assemble a group that has gravitas and is fresh, one that reflects the diversity of his political appeal and the depth and knowledge he promised to bring to government. Insiders and outsiders.

The large Obama-Biden transition team illustrates these conflicts. There are a lot of able people who understand governance.

Smart Retreads

Collectively, they also look very much like the Clinton government-in-exile. You need smart retreads; that picture doesn't look like a group that wishes to change ``decades of broken politics.''

Some of the tough trade-offs and considerations are evident in weighing whom to tap for his most important Cabinet positions, starting with Treasury.

In a financial crisis, there's no one who would bring more expertise and experience than former Treasury Secretary Lawrence Summers, 53. The complaints from a few women's groups about a careless comment he made several years ago are dismissed as frivolous by the Obama insiders, as they should be.

The only drawback against Summers, and why some believe he's more likely to be tapped for special assignments and as a possible Federal Reserve Board chairman-in-waiting, is that picking the former secretary for the same job isn't synonymous with change.

Youthful Geithner

That's why 47-year-old New York Federal Reserve Chairman Timothy Geithner, whose acumen is as striking as his youthful appearance, is a more attractive alternative to some Obama advisers. A possible middle ground that has been advanced to the president-elect is the towering presence of 81-year-old former Federal Reserve Chairman Paul Volcker, with Geithner as his deputy and heir apparent.

One thing is clear: Considering such heavyweights as Summers, Geithner and Volcker, any other choice would send a very disappointing signal.

For secretary of state, Senator John Kerry of Massachusetts and New Mexico's Governor Bill Richardson are lobbying for the job. Neither would be a very uplifting selection.

Nunn, Holbrooke

Two who would be are totally different. Sam Nunn, the former chairman of the Senate Armed Services Committee, personifies solidity and respected judgment; if there's a crisis with Russia or China, there's no one you'd rather have in place. Former United Nations Ambassador Richard Holbrooke would bring unsurpassed creativity and new thinking into a world that looks a lot different than it did 10 years ago.

Over the past couple of days the odds-on favorite for this post has become Hillary Clinton. She'd be a good choice -- assuming her husband is with the program -- and it speaks volumes of Obama's confidence and reach. He is inspired by Doris Kearns Goodwin's ``Team of Rivals,'' recounting how Lincoln -- with only one term in Congress -- surrounded himself in key posts with the heavyweights he'd beaten. His secretary of state was William Seward, the senator from New York.

For attorney general, Obama supporter Eric Holder is a frontrunner.

Marc Rich Pardon

There is a problem: As deputy attorney general in 2001, Holder failed to oppose Bill Clinton's infamous pardon of Marc Rich, the tax cheat and fugitive financier. Arizona Governor Janet Napolitano, a former prosecutor 2,000 miles away from Washington, doesn't have any insider baggage.

Two months from today, as these men and women undertake the daunting challenges ahead, it'll be instructive to look at the top 50 appointments -- secretaries and deputies, the top dozen White House appointments and a few others -- and apply two tests: is this a truly talented and diverse collection of the best people and are half of these men and women new and fresh, not retreads of the 1990s?

If Barack Obama threads that delicate needle, he'll be ready to govern.

(Albert R. Hunt is the executive editor for Washington at Bloomberg News. The opinions expressed are his own.)

To contact the writer of this column: Albert R. Hunt in Washington at ahunt1@bloomberg.net




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