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hp12-1-08i President-elect Obama made official the worst-kept secret in Washington this morning: that his national security team will be headlined by a bitter political rival (Clinton) and a member of President Bush’s war cabinet (Gates).

Beyond the obvious symbolism, however, Monday’s moves also offer some important evidence on the best-kept secret of the past two years: how will a President Obama actually govern in these troubled times?

The parlor game of who gets what job is largely over, save a few of the less prestigious cabinet gigs. Here is what today’s announcement – combined with the unveiling of his top White House staff and economic team – tell us about the 44th president as he prepares to take over.

• He is an intellectual, who is more impressed by academic and governing credentials than familiarity and loyalty.

New York Times columnist David Brooks nailed it recently when he called the emerging cabinet a “valedictocracy”: a team of the nation’s first-in-class Ivy League elites. He meant it as a compliment. He’s not alone: it’s hard to find Republicans who don’t express admiration (at least in private) for the emerging Obama team.

Of the 18 top appointments announced so far, 12 have degrees from Ivy League institutions, Stanford or MIT. Susan Rice was a Rhodes Scholar; Larry Summers was the youngest tenured professor in Harvard history and Greg Craig, the top White House lawyer, attended Exeter, Harvard, Cambridge and Yale.

Few of the early picks could be considered Obama loyalists. Hillary Rodham Clinton thought she would be banished to the outer reaches of Obama’s world. Now, she’s secretary of state. Robert Gates thought he was headed for retirement. Now, he will run war policy for anti-war Obama. The victor has proved to be anything but vindictive.

There could be a cost to having so many high achievers around the same table. Bush’s war Cabinet was also praised for its experience and gravitas, but wound up being a dysfunctional snake pit.

• He is willing to take big risks.

His economic and national-security teams are getting packed with huge personalities who see themselves as architects, not assembly-line workers. The potential for big clashes in tough times is high. But so is the potential for big results.

Hillary Clinton could be a fabulous world diplomat, considering her familiarity with leaders and global problems. She could also be a disaster if the Clinton family’s penchant for personal and political dramas distract the Obama presidency…

Read on…

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Defense Secretary Robert Gates has served for two years under President Bush.

Defense Secretary Robert Gates has served for two years under President Bush.

WASHINGTON — President-elect Barack Obama’s security team came into sharper focus, with officials confirming that Defense Secretary Robert Gates would retain his job and that retired Marine Gen. James Jones would likely join the incoming administration as national security adviser.

The picks, which are expected to be formally announced in Chicago Monday, signal Mr. Obama’s desire for experience and continuity with the nation embroiled in two wars.

The probable appointments — along with Sen. Hillary Clinton’s likely ascension to the secretary of state position — also mean that Mr. Obama is entrusting his foreign policy to centrist figures who have at times advocated policies that were more hawkish than his own.

Lawmakers from both parties had been urging Mr. Obama to retain Mr. Gates for weeks, arguing that it would improve the new administration’s ability to oversee the war effort. It would also put a Republican in the cabinet of a president who promised to bridge partisan divides.

Mr. Obama appears to have made a similar calculus in asking Gen. Jones to be his national security adviser. The former North Atlantic Treaty Organization supreme commander and Marine Corps commandant hasn’t decided whether to take the job, but people close to him said the general appears likely to accept.

The job would make Gen. Jones, a nonpartisan figure, the chief policy coordinator between the State Department, the Pentagon and other national-security agencies.

Gen. Jones would become the first former military general to serve as the top White House national-security adviser to a president since retired Gen. Colin Powell worked alongside President Ronald Reagan 20 years ago. He is close to Sen. Clinton, and has close ties to many lawmakers on Capitol Hill, where he worked for years as a Marine liaison.

Gen. Jones also has deep knowledge of two of the biggest challenges Mr. Obama will face in his first term: the need to redesign America’s energy infrastructure and the ongoing war in Afghanistan.

Mr. Obama’s decision to retain Mr. Gates, while expected, is the clearest indication to date of the incoming administration’s thinking about Iraq and Afghanistan. The defense secretary has opposed a firm timetable for withdrawing American forces from Iraq, so his appointment could mean that Mr. Obama was further moving away from his campaign promise to remove most combat troops from Iraq by mid-2010.

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jobs-steve

Nov. 20 (Bloomberg) — I sat in the window of a cafe this month in Annapolis, Maryland, a sailing town near Washington, counting parked cars. “Honda, Honda, Nissan, Toyota, Honda, Lexus (made by Toyota), Mazda, and a battered 1970s Cadillac.”

No wonder the U.S. carmakers are in meltdown and begging to be plugged in to the Treasury’s life-support machines.

Don’t be misled, though — the something that is rotten in the auto industry has nothing to do with the credit crunch, and everything to do with years of mismanagement, shoddy products and bad choices.

Consider the credit-rating histories of General Motors Corp. and Ford Motor Co. For both companies, the rot started all the way back in August 2001, when Standard & Poor’s put the A grades they had enjoyed for a decade on review for downgrade. In October of that year, they each suffered a two-level cut to BBB+ that left them just three moves away from junk status.

So seven years ago, the car companies were already on the slide, after years of their Japanese rivals stealing market share with improved production methods and better reliability. That was well before the words “credit crunch” had become as ubiquitous as “would you like large fries with that?” or “the new Bond film isn’t as good as the previous one.”

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Pirates of Detroit

In other words, give us what we want or suffer the consequences. That sure sounds like blackmail to my ears, except even Somali oil-tanker pirates have so far stopped short of trying to pilfer $25 billion from their victims.

So, what to do? Nobody, least of all President-elect Barack Obama, wants to see the 250,000 people who work directly for the big three U.S. automakers tossed on the scrapheap, or the other 4 million workers whose job security is at risk somewhere along the supply chain from the drawing boards of Detroit to the car showrooms of America.

There seems to be a groundswell of support building for the concept of retraining and retooling auto workers away from churning out four-wheeled gas guzzlers to put them instead at the vanguard of the fight against climate change.

“Wouldn’t the benefits be greater if the U.S. government spent $25 billion to $75 billion — the current dollars proposed to bail out the auto industry — to train engineers, support infrastructure and work in the much-neglected alternative energy space?” wrote Tom Sowanick, who helps manage $20 billion as chief investment officer of Clearbrook Financial LLC in Princeton, New Jersey.

I Spy iCar

New York Times columnist Thomas Friedman suggested earlier this month that Apple Inc. CEO Steve Jobs should be persuaded to sign up for “national service” and run a car company for a year, long enough to invent the iCar.

I think Friedman is on to something. Sure, the iCar would be available in any color as long as it’s white (with a black model to be introduced as soon as all the early adopters have a pearlescent model in the driveway), and the windshield would be scratched to opacity within weeks. It would probably run on fresh air, though, and the packaging would be to die for.

First off, the U.S. government would need to absorb all those legacy pension and health-care costs that the automakers have used as an excuse for years to dodge getting their collective act together. Splitting the welfare issue from the business travails would deliver some much-needed clarity to the true financial position of the carmakers.

Then, turn the entire industry over to people who might make a difference. Give GM to Jobs, let Microsoft Corp. founder Bill Gates run Ford and allow billionaire Warren Buffett to try his hand at Chrysler. In five years, I bet that car counting in Annapolis would deliver a very different result.

(Mark Gilbert is a Bloomberg News columnist. The opinions expressed are his own.)

Source: Bloomberg