Blue Mass Group

Reality-based commentary on politics.

Obama Cabinet takes shape [Cabinet Open Thread]

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State – Hillary Clinton looks like a done deal, with apparently concerns about her husband’s connections worked out.

Defense – It looks like Robert Gates will stay on.  Was he pushing for pullout of Iraq behind the scenes?  Otherwise, if we assume that opposition to our involvement was a key factor in the outcome of the election it doesn’t make much sense to keep the guy responsible for it.

Treasury – Timothy Geithner, Chair of the New York Federal Reserve.  Dow climbed almost 500 points today on the news.

Attorney General – Eric Holder, deputy under President Clinton.  Choosing a deputy is top priority.  It would be a good fit for Deval, but he insists he’s not going anywhere.

Homeland Security – AZ Governor Janet Napolitano, which is interesting since I thought she might challenge McCain in 2010 and have a good chance of succeeding, though doing this for awhile then running I suppose isn’t completely out of the question.

HHS – Tom Daschle, though I’ve heard he’s likely to be a figurehead, with the deputy as the policy expert in this field.

Commerce – Looks like Bill Richardson, though he might have prefered State.

National Security Advisor – General Jim Jones (USMC, Ret.)

Penny Pritzker and Cong. James Clyburn have turned down offers to lead Commerce and HUD respectively.

In Congress Henry Waxman has been chosen to replace John Dingell as Chair of Energy & Commerce.  It’s probably better from our perspective to not have a Congressman from Detroit responsible for energy legislation.  This is a snub to seniority as Dingell is THE most senior member of the House.  Also, it’s looking more certain that Senator Kerry will succeed Senator Biden as Chair of Foreign Relations.

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  2. I drove through a puddle and my bumper sticker got wet.  
    The ink washed away and underneath it said, “Same-old, same-old.”

      • It’s only a bumper sticker, but take Timothy Geithner.  In the lame-duck Clinton administration he worked to get the credit default swap through (PL 106-554). True, this was just another nail in our economy’s coffin.  Lately Mr. Geithner has teamed with SECTREAS Paulson on the bailout.  

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        p>Does that make him ambidextrous?

        • Read this for some background on Geithner circa 2006:

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          p>Sayeth Geithner, 2006:

          “The same factors that may have reduced the probability of future systemic events, however, may amplify the damage caused by and complicate the management of very severe financial shocks. The changes that have reduced the vulnerability of the system to smaller shocks may have increased the severity of the large ones.”

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          p>So he understands the system.  I’ve heard a few allegations about Geithner being part of the problem, but I’m still waiting on the support for those allegations.

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          p>–

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          p>I’m pretty OK with Obama’s team.  He’s the one with the temperament and the brains; stands to reason he might want people with experience.  Who would you want at Treasury?

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          p>As our friend David Brooks wrote recently,

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          p>

          Unlike past Democratic administrations, they are not just handing out jobs to the hacks approved by the favored interest groups. They’re thinking holistically – there’s a nice balance of policy wonks, governors and legislators.

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          p>and

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          p>

          …they are picking Washington insiders. Or to be more precise, they are picking the best of the Washington insiders.

          Obama seems to have dispensed with the romantic and failed notion that you need inexperienced “fresh faces” to change things. After all, it was L.B.J. who passed the Civil Rights Act. Moreover, because he is so young, Obama is not bringing along an insular coterie of lifelong aides who depend upon him for their well-being.

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          p>I don’t say this very often, but I agree with David Brooks’s assessment.

  3. I hope somebody will ask Geithner at his confirm hearing:
    “Recently the Federal Reserve cut rates to 1.5%. Rates were at 1.5% four years ago. In between you raised rates to 5%, destroying many people with ARMs, and throwing many more out of work who then defaulted on their mortgages. Was that the right thing to do?”

  4. For Napolitano, I think it might make more sense for her to pass up on challenging McCain and go after Jon Kyl instead.  He’s up for reelection in 2012, so she’d get a couple more years experience at DHS.  Plus Kyl should be an easier target for her to pick off — he’s an arch conservative in a state that’s trending blue and 2012 will be Presidential election year when I’d expect to see a big push to swing AZ blue now that McCain won’t be on the ballot, so having her on the ballot would be a big help there.

  5. … will be heading up the OMB.  This is huge.  He’s the guy from OMB that’s been raising the ‘health care is at the center of our future fiscal problems flag’ for some time.

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    p>Ezra:

    Orszag will be coming from the Congressional Budget Office, OMB’s legislative cousin. There, he’s shown an almost single-minded focus on health care reform. He’s added dozens of health care analysts to the staff, reconstructed the health policy division’s management structure, and is readying to release two major books on health policy options and CBO’s health care scoring models that will be extremely central in how Congress looks at building a health care bill. Amidst all that, he’s toured the country giving a slide show about the problems of the health care system, the overwhelming danger it poses to our fiscal condition, the incredible inefficiencies that beset the delivery, and the research that suggests reform could not only save money but also improve care. He’s also acted as a powerful and credible counterweight to those who counsel incrementalism, or delay, on health reform. Indeed, when it became common to suggest that the bank bailout should displace ambitious agenda items like health care reform, Orszag took to his blog — yes, he has a blog, did I mention that? — to write:

    Many observers have noted that addressing the problems in financial markets and the risks to the economy may displace health care reform on the policy agenda…Although it may not seem immediately relevant given our current difficulties, it will be crucial to address the nation’s looming fiscal gap – which is driven primarily by rising health care costs – as the economy eventually recovers from this current downturn. Indeed, our ability to address our current economic difficulties (through both financial market interventions and potential additional fiscal stimulus) would be severely impaired if investors were not so willing to invest substantial sums in Treasury securities without charging much higher interest rates. That willingness reflects the (currently accurate) view among investors that Treasury securities are extremely safe investments.

    If we fail to put the nation on a sounder fiscal course over the next few decades, though, we will ultimately reach a point where investors would lose confidence and no longer be as willing to purchase Treasury debt at anything but exorbitant interest rates. If that were to occur, we would lack the kind of maneuvering room that we currently enjoy to address problems in the financial markets and the economy. So if you think the current economic crisis is serious, and it is, imagine what it would be like if we didn’t have the ability to undertake aggressive and innovative policy interventions because creditors were effectively unwilling to lend substantial additional sums to the Federal government…

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