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Citing an “economic crisis of historic proportions” President-elect Barack Obama announced the key members of his economic team at a news conference in Chicago.
Update | 12:34 p.m. The Q & A was over pretty quickly, and Mr. Obama and his newly introduced economic team filed offstage.
Here’s a quick thumbnail that Mr. Obama gave in introducing each of them:
Mr. Geithner: “offers not just extensive experience shaping economic policy and managing financial markets – but an unparalleled understanding of our current economic crisis, in all of its depth, complexity and urgency. Tim will waste no time getting up to speed. He will start his first day on the job with a unique insight into the failures of today’s markets – and a clear vision of the steps we must take to revive them.”
“Growing up partly in Africa and having lived and worked throughout Asia; having served as Under Secretary of the Treasury for International Affairs – one of many roles in the international arena; and having studied both Chinese and Japanese, Tim understands the language of today’s international markets in more ways than one.”
Mr. Summers: “Larry helped guide us through several major international financial crises – and was a central architect of the policies that led to the longest economic expansion in American history, with record surpluses, rising family incomes and more than 20 million new jobs. He also championed a range of measures – from tax credits to enhanced lending programs to consumer financial protections – that greatly benefited middle income families.”
“As a thought leader, Larry has urged us to confront the problems of income inequality and the middle class squeeze, consistently arguing that the key to a strong economy is a strong and growing middle class. This idea is the core of my own economic philosophy and will be the foundation for all of my economic policies.”
Ms. Romer: “Christina is both a leading macroeconomist and a leading economic historian, perhaps best known for her work on America’s recovery from the Great Depression and the robust economic expansion that followed. Since 2003, she has been co-director of the National Bureau of Economic Research Monetary Economics program. She is also a member of the Bureau’s Business Cycle Dating Committee – the body charged with officially determining when a recession has started and ended – experience which will serve her well as she advises me on our current economic challenges.”
“Christina has also done groundbreaking research on many of the topics our Administration will confront – from tax policy to fighting recessions. And her clear-eyed, independent analyses have received praise from both conservative and liberal thinkers alike. I look forward to her wise counsel in the White House.”
Ms. Barnes: She has a “brilliant legal mind” and is “one of the most respected policy experts in America, will be serving as director of my Domestic Policy Council.” She will be “working hand-in-hand with my economic policy team to chart a course to economic recovery. An integral part of that course will be health care reform – and she will work closely with my Secretary of Health and Human Services on that issue.”
“As executive vice president for policy at the Center for American Progress, Melody directed a network of policy experts dedicated to finding solutions for struggling middle class families. She also served as chief counsel to the great Senator Ted Kennedy on the Senate Judiciary Committee, working on issues ranging from crime to immigration to bankruptcy, and fighting tirelessly to protect civil rights, women’s rights and religious freedom.”
Related: What Economic Blogs Are Saying
Auto Industry | 12:32 p.m. Question: What should be done about the auto industry?
Mr. Obama gets tough on Detroit and says he was “surprised” that the auto execs went to Washington last week without being better prepared.
“We can’t allow the auto industry to simply vanish,” he says, but “we can’t just write a blank check.” Nor, he said, can taxpayers be expected “to pony up more money to an auto industry that has been resistant to change.”
Then this: “I was surprised they didn’t have a better-thought-out proposal when they arrived in Congress.” He says Congress “did the right thing to say you guys need to come up with a better plan and come back.”
But any additional money for the industry, he says, should assure a long-term sustainable auto industry and is not just “kicking the can down the road.”
Economic Approach | 12:27 p.m. Question: How will your approach to the economy differ from the “ad hoc” approach of the last year?
Mr. Obama says he wants to make sure that moving forward he is “clearly articulating” his end goals, what he is trying to achieve and that there is “clarity and transparency” to his plan. Markets have been confused about the overall direction of the economy, he says, and he wants to provide clarity.
Stimulus Package? | 12:25 p.m. Ah, now we’ve got sound. But he still declines to discuss the size of the stimulus package. He says there is a consensus “across the spectrum” that we need an economic stimulus package and that it’s big enough to give a “jolt” to the economy. He is vague about how to pay for it beyond “reforms” in Washington.
On to Questions | 12:19 p.m. In the question-and-answer period, the questions, alas, are inaudible. But Mr. Obama declines to put a price tag on his stimulus package. Apparently he was asked about the Bush tax cuts because Mr. Obama says he isn’t sure exactly how those tax cuts will be repealed.
No Shortcuts | 12:15 p.m. “We need a recovery plan for both Wall Street and Main Street – a plan that stabilizes our financial system and gets credit flowing again, while at the same time addressing our growing foreclosure crisis, helping our struggling auto industry, and creating and saving 2.5 million jobs – jobs rebuilding our crumbling roads and bridges, modernizing our schools, and creating the clean energy infrastructure of the twenty-first century,” he says. “Because at this moment, we must both restore confidence in our markets – and restore the confidence of middle class families, who find themselves working harder, earning less, and falling further and further behind.”
He adds: “Again, this won’t be easy. There are no shortcuts or quick fixes to this crisis, which has been many years in the making – and the economy is likely to get worse before it gets better. Full recovery won’t happen immediately. And to make the investments we need, we’ll have to scour our federal budget, line-by-line, and make meaningful cuts and sacrifices as well – something I’ll be discussing further tomorrow.”
‘Crisis of Historic Proportions’ | 12:09 p.m. “We are facing an economic crisis of historic proportions,” Mr. Obama says, and we need the best minds to bring sound judgment and fresh thinking. He said his team are people who share his fundamental belief that we can’t have a thriving wall street without a thriving Main Street.
The News Conference Begins | 12:03 p.m. The market continues to cilmb as Mr. Obama opens his news conference. The Dow is up 306 points so far.
In addition to Mr. Geithner, Mr. Summers and Ms. Romer, Mr. Obama announces Melody C. Barnes will be director of the Domestic Policy Council, which will Ms. Barnes previously served as executive vice president for policy at the Center for American Progress and as chief counsel to Senator Edward M. Kennedy on the Senate Judiciary Committee from December 1995 until March 2003, according to the transition team. Mr. Obama said that an integral part of Ms. Barnes’s job will be working closely with the Secretary of Health and Human Services on health care reform.
The Economic Team | 11:53 a.m. President-elect Barack Obama is about to hold a news conference in Chicago and announce the members of his economic team, including Timothy F. Geithner, president of the New York Federal Reserve, as his Treasury secretary.
Mr. Obama also plans to name Larry Summers, who was Treasury secretary during the Clinton administration, as the head of his National Economic Council and Christina Romer, a well-regarded economist at the University of California at Berkeley, to lead the Council of Economic Advisers.
And he is expected to make the case for an expanded economic stimulus package to create or preserve 2.5 million jobs during the next two years.
Barack Obama’s presidential victory permeates this month’s list of best-selling political books, with both of his own works returning to the top and several by others landing among the 15 most popular.
President-elect Obama’s “Audacity Of Hope,” a former mainstay since the inception of the Caucus’s Poli-Book list, returns at No. 1, and his earlier memoir, “Dreams From My Father,” lands at No. 2.
An overwhelming focus continues on the 44th president-elect in pictorials and essays: “The American Journey Of Barack Obama” by the editors of Life magazine is No. 4; “The Rise Of Barack Obama” by Pete Souza is No. 8; “Obama” by Deborah Willis and Kevin Merida is No. 15. And “Michelle” by Liza Mundy falls at No. 13, as the first book on First Lady Michelle Obama to grace the list.
Also new this month is “American Lion” by Jon Meacham at No. 6. The controversial seventh president, founder of the Democratic Party, Andrew Jackson, made a radical stir in the political hierarchy, with lasting effects to date, by shifting from government concerns to giving more power to ordinary citizens.
The full list follows:
Poli-Book Best Seller List
Based on sales for weeks ending Oct. 25 through Nov. 15, 2008
1. The Audacity Of Hope, by Barack Obama. (Crown, $25.) The president-elect asks Americans to move beyond political divi sions.
2. Dreams From My Father, by Barack Obama. (Crown, $25.95.) The president-elect on life as the son of a black African father and a white American mother.
3. Hot, Flat, And Crowded, by Thomas L. Friedman. (Far rar, Straus & Giroux, $27.95.) How a green revolution can renew America, by The New York Times columnist.
4. The American Journey Of Barack Obama, by the editors of Life magazine. (Little, Brown, $24.99.) Photographs and essays, starting with Obama’s birth in Hawaii.
5. Fleeced, by Dick Morris and Eileen McGann. (Harper, $26.95.) Americans are fleeced by government, business, labor unions and lobbyists.
6. American Lion, by Jon Meacham. (Random House, $30.) An drew Jackson, the seventh president, in the White House, by the editor of Newsweek.
7. Tried By War, by James M. McPherson. (Penguin Press, $35.) Abraham Lincoln as commander in chief, from the author of “Battle Cry of Freedom.”
8. The Rise Of Barack Obama, by Pete Souza. (Triumph, $27.95.) Photographs of Obama’s career, from his first day in the United States Senate to the Pennsylvania primary last April.
9. Ted, White, And Blue, by Ted Nugent. (Regnery, $27.95.) A manifesto by the rock star, gun advocate and host of an Outdoor Channel hunting show celebrates “what so many Americans em brace as abundant truth, common sense and inescapable logic.”
10. Kill Bin Laden, by Dalton Fury. (St. Martin’s, $25.95.) The siege of Tora Bora by the elite counterterrorism unit Delta Force, by the senior ranking military officer at the battle.
11. The Limits Of Power, by Andrew Bacevich. (Holt, $24.) A retired Army colonel argues that American citizens are ultimately responsible for the country’s military and economic woes. (†)
12. Goodnight Bush, by Erich Origen and Gan Golan. (Little, Brown, $14.99.) A requiem for the Bush administration, based on the children’s book “Goodnight Moon.”
13. Michelle, by Liza Mundy. (Simon & Schuster, $25.) The Washington Post writer paints an intimate portrait Of Michelle Obama’s life.
14. The War Within, by Bob Woodward. (Simon & Schuster, $32.) White House debates over the Iraq war, 2006-8.
15. Obama, by Deborah Willis and Kevin Merida. (Amistad, $26.95.) Photographs capturing Obama’s 18-month campaign to the presidency.
Something for the prediction lovers out there!
He’s someone who says things are going to be looking up!
On the Chris Matthews Show today, Matthews argued that one of the major differences between President Bush and President-elect Barack Obama is the fact that Obama is intellectually curious. As an example of Bush’s lack of intellectual curiosity, Matthews played a 2004 clip of Washington Post reporter Bob Woodward saying on 60 Minutes that Bush “is not an intellectual” or what “would be called a deep thinker.”
Asked by Matthews to explain why Bush “shows little intellectual curiosity,” Woodward said it was essentially because Bush “doesn’t like homework”:
WOODWARD: I think he’s impatient. I think, my summation: He doesn’t like homework. And homework means reading or getting briefed or having a debate. And part of the presidency, part of governing, particularly in this area, is homework, homework, homework.
Woodward, who has written four books on the Bush White House, has reported multiple instances in which Bush has put his distaste for homework on display. In 2004, Woodward told PBS’s Frontline about how Bush describes himself as “a gut player” who doesn’t “play by the book“:
QUESTION: What does that tell us about this president, how his mind works and how he functions as an executive? …
WOODWARD: Bush looks at problems. And he told me, he said: “I’m a gut player. I play by instincts. I don’t play by the book.” And of course the book is Policy 101 about how you make these kinds of decisions, and all of this [is] coming from the gut.
In his most recent book, Woodward reported that Bush actually bragged about not attending meetings where key decisions about the surge were made, telling Woodward, “I’m not in these meetings, you’ll be happy to hear, because I got other things to do.” Woodward has said that in his eyes, Bush has “often displayed impatience and a lack of interest in open debate.”
MATTHEWS: Bob, he obviously relies a lot on instinct and is proud of that fact. Is that why he shows little intellectual curiosity about other people’s thinking?
WOODWARD: I think he’s impatient. I think, my summation: He doesn’t like homework. And homework means reading or getting briefed or having a debate. And part of the presidency, part of governing, particularly in this area, is homework, homework, homework.
MATTHEWS: And Obama?
WOODWARD: Obama is the opposite. He mainlines homework. He does, you know, where is extra credit.
Source: Think Progress
Timothy Geithner is a seasoned crisis manager with a temperament to match that of Barack Obama
STOCKMARKETS soared on Friday November 21st when investors learned that Barack Obama would nominate Timothy Geithner as his Treasury Secretary. That might seem odd. The president of the Federal Reserve Bank of New York was already a favourite for the post. And he brings no magical solution to the financial crisis: he has been battling it for over a year, with no end in sight.
The 494-point (6.5%) jump in the Dow Jones Industrial Average is more a statement about investors’ anxiety over the unsettled state of economic policymaking. News of the Treasury nominee holds out the prospect of a more coherent and forceful approach to the crisis. The current treasury secretary, Hank Paulson, is reworking the $700 billion bail-out plan on the fly, policymakers are struggling over a new approach to foreclosures, the status of the mortgage agencies, Fannie Mae and Freddie Mac, is in limbo, and Congress has just sent the carmakers, teetering close to insolvency, home empty handed. The two months before Mr Obama is sworn in seem like an eternity.
Investors were also relieved that their darkest fears of a Sarah Palin-like shock announcement did not come to pass and that Mr Obama, as in his other important appointments, has chosen ability over connections. Mr Geithner does not know Mr Obama well and has no notable ties to the Democratic Party. But for this cabinet post more than any other, an overtly political appointment would have been corrosive to investor confidence.
Assuming he is nominated Mr Geithner brings two crucial qualities. First, he represents continuity. From the first days of the crisis last year, he has worked hand in glove with Ben Bernanke, the Fed chairman, and Mr Paulson. He can continue to do so while awaiting confirmation. If Citigroup, for example, needs federal help, Mr Geithner will be involved. An unknown when he joined the New York Fed in 2003, he is now a familiar face to the most senior executives on Wall Street and to central bankers and finance ministers overseas.
Second, he represents competence. He has spent more time on financial crises, from Mexico and Thailand to Brazil and Argentina, than probably any other policymaker in office today. Mr Geithner understands better than almost anyone that in crises you throw out the forecast and focus on avoiding low probability events with catastrophic consequences. Such judgments are excruciating: do too little, and you undermine confidence and generate a bigger crisis that needs even bigger policy action. Do too much, and you look panicked and invite blowback from Wall Street, Congress and the press. At times during the crisis Mr Geithner would counsel Mr Bernanke on the importance of the right “ratio of drama to effectiveness”.
Mr Geithner looks a lot younger than his 47 years. He skateboards and snowboards and exudes a sort of hipster-wonkiness, using “way” as a synonym for “very” as in “way consequential” and occasionally underlining his point with the word “fuck”.
In temperament he seems similar to Mr Obama: he is suspicious of ideology, questions received wisdom
In normal times, risk aversion damps economic cycles; in a crisis, it accentuates them, leading to withdrawn credit, evaporating liquidity, margin calls, falling asset prices, and more risk aversion. “The brake becomes the accelerator,” as he puts it. Indeed, although he worked alongside Mr Paulson on the crisis, he has at times advocated a more aggressive approach. For example, news reports say that he was not comfortable with Mr Paulson’s decision to take public money off the table in the ultimately unsuccessful effort to save Lehman Brothers. He has not always got it right: he was the most important architect of the original bail-out of American International Group, an insurer, which in time has proved flawed, requiring significant amendment.
Mr Geithner looks a lot younger than his 47 years (though not as young as he did before the crisis began). He skateboards and snowboards and exudes a sort of hipster-wonkiness, using “way” as a synonym for “very” as in “way consequential” and occasionally underlining his point with the word “fuck”. In temperament he seems similar to Mr Obama: he is suspicious of ideology, questions received wisdom, likes a competition of ideas and is keenly aware of how uncertain the world is.
Mr Geithner learned about crisis management as an aide to Lawrence Summers who rose to Treasury Secretary under Bill Clinton. Mr Summers was the other candidate for the job under Mr Obama, and his appointment would probably also have been greeted enthusiastically. He will reportedly join the administration in a White House advisory role.
Mr Geithner leaves a big hole; the New York Fed president is by tradition the financial system’s go-to crisis manager, and that job has never been more important in the modern era than it is now. A probable candidate to succeed him is a Fed governor, Kevin Warsh. Though young (he is just 38) he has been a central player in the crisis thanks to his extensive contacts in the financial world and closeness to Mr Bernanke, who puts great store in Mr Warsh’s feel for politics and markets (see our recent blog post). That appointment will be made by the board of the New York Fed.
Mr Geithner faces a huge job. He will have critical decisions to make on whether to enlarge or alter the $700 billion Troubled Asset Relief Programme, what sort of firms will qualify for its money, whether and how to bail out the carmakers, what to do with the flailing mortgage agencies, Fannie Mae and Freddie Mac, and how to deal with countless other chapters in the continuing crisis. Unlike Mr Summers he is not an economist and brings no expertise to many of the big economic-policy questions that the Obama administration will confront such as health care, fiscal policy and taxes, even though he will be the primary spokesman on the administration’s economic policies.
He is a quick learner: within a year of joining the New York Fed he could debate the intricacies of monetary policy with academic experts. But he will join an administration rapidly filling up with heavyweights on economic policy, not least of them Mr Summers. Indeed, one of the big questions of the new team that Mr Obama is expected to unveil on Monday is just how Mr Summers, a brilliant but intimidating and sometimes abrasive figure, will fit in.
Mr Obama is assembling a formidable economic team. With the economy perhaps on the precipice of its worst recession since the Depression, he will need it.
CHICAGO — On a dark afternoon last week, the road to Jerusalem and Beijing momentarily veered through the office of a real estate company here.
Valerie Jarrett, the company’s chief executive, had signed her resignation letter an hour earlier, and now she was taking phone calls from potential top diplomatic appointees.
“You don’t need to thank me,” she said soothingly to a booming male voice on her cellphone. “I just wanted you to have a chance to make your case.”
If someone were to rank the long list of people who helped Barack and Michelle Obama get where they are today, Ms. Jarrett would be close to the top. Nearly two decades ago, Ms. Jarrett swept the young lawyers under her wing, introduced them to a wealthier and better-connected Chicago than their own, and eventually secured contacts and money essential to Mr. Obama’s long-shot Senate victory.
In the crush of his presidential campaign, Ms. Jarrett could have fallen by the wayside, as old mentors often do. But the opposite happened: Using her intimacy with the Obamas, two BlackBerrys and a cellphone, Ms. Jarrett, a real estate executive and civic leader with no national campaign experience, became an internal mediator and external diplomat who secured the trust of black leaders, forged peace with Clintonites and helped talk Mr. Obama through major decisions.
She “automatically understands your values and your vision,” Michelle Obama said in a telephone interview Friday, and is “somebody never afraid to tell you the truth.” Mrs. Obama added: “She knows the buttons, the soft spots, the history, the context.”
In January, Ms. Jarrett will go to the White House as a senior adviser to Mr. Obama, where she will be “one of the four or five people in the room with him when decisions get made,” as Anita Dunn, a Democratic strategist close to Mr. Obama, put it. Ms. Jarrett, who is a co-chairwoman of Mr. Obama’s transition effort, will also serve as the White House contact for local and state officials across the nation and the point person for Mr. Obama’s effort to build a channel between his White House and ordinary Americans.
Less formally, she intends to help Mr. Obama preserve his essential self as he becomes president, even as she becomes the type of person who chats with Gov. Arnold Schwarzenegger of California, mingles with Warren Buffett and is now sometimes greeted by strangers.
Washingtonians who assess the new White House crew sometimes cast Ms. Jarrett in parochial terms: she is the hometown buddy, they say, or the one who will hear out the concerns of black leaders. They note that presidential friends do not always fare well in the capital, that confidants from Arkansas and Texas have stumbled in the corridors of the West Wing.
Asked what was her biggest worry about the job, which is a major leap from anything she has undertaken before, Ms. Jarrett said she sometimes feared she did not know enough. “I will try to do my homework,” she said.
Ms. Jarrett, 52, has often been underestimated: perhaps because she is often the only black woman at the boardroom tables where she sits, or perhaps because she can seem girlish, with a pixie haircut, singsong voice and suits that earned her a recent profile in Vogue.
A protégée of Mayor Richard M. Daley of Chicago, Ms. Jarrett served as his planning commissioner, ran a real estate company, the Habitat Company — whose management of public housing projects has come under scrutiny with Ms. Jarrett’s rise — and sits on too many boards to count. She is an expert in urban affairs, particularly housing and transportation, in an administration expected to lavish more money and attention on cities than its predecessors.
And she has something no other adviser in the Obama White House ever will: ties to the president-elect and future first lady that go deeper than a political alliance. Ms. Jarrett is only a few years older than the Obamas, but her relationship with them can seem almost maternal. “I can count on someone like Valerie to take my hand and say, You need to think about these three things,” Mrs. Obama said. “Like a mom, a big sister, I trust her implicitly.”
During big speeches, Ms. Jarrett watched Mr. Obama with a gaze of such intensity that he and their other friends laugh about it. “Barack always jokes, You can’t look Valerie in the eye, she’s going to make you cry,” said Martin Nesbitt, the treasurer of the campaign.
Loyal allies to dominate inner sanctum but Clinton vets will abound
WASHINGTON – Two main quarries are supplying the building blocks for President-elect Barack Obama’s new administration.
Longtime, deeply loyal associates will dominate the White House inner sanctum. And veterans of Bill Clinton’s presidency will hold vital jobs throughout the government, although a bit farther from the Oval Office.
The structure suggests Obama is confident enough to hand top posts to former rivals whose loyalty is not guaranteed, a strategy many presidents have avoided. But most of those on Obama’s team who will have his ear everyday will be old friends and experienced advisers who are seen as having no ambitions beyond his success.
Obama raised eyebrows this month when he tapped some of Clinton’s closest allies for important jobs.
John Podesta, Clinton’s former White House chief of staff, is heading the transition effort. Illinois Rep. Rahm Emanuel, a former top Clinton adviser, is Obama’s chief of staff. Former Clinton appointees Eric Holder and Janet Napolitano appear in line for Cabinet posts.
Even more startling to many, Obama has signaled plans to name former first lady Hillary Rodham Clinton as secretary of state.
Some Obama supporters have praised him for reaching out to his toughest primary opponent. But others question why they worked so hard to defeat Clinton only to see her, and many close to her, grab prizes in the new administration. They note that Obama repeatedly campaigned against “the politics of the past” and Washington “dramas,” thinly veiled jabs at the Clinton presidency as well as President George W. Bush’s tenure.
Stephen Hess, a George Washington University authority on presidential transitions, said Obama is playing it smart.
“It’s easy to make a leap that this is going to be a repeat of the Clinton administration and there’s no way that’s going to happen,” said Hess, who first worked for the Eisenhower administration.
Value of ‘old-timers’
Obama needs a core of Democrats with federal government experience, Hess said, and veterans of Bill Clinton’s administration are virtually the only source.
“The old-timers are exceedingly valuable to him now,” he said, but Obama “also has his own group of advisers, and he will merge the two groups.”
That merger began taking shape last week. Obama’s three “senior advisers,” who will have desks near the Oval Office, are some of his closest and longest-serving allies: