Tuesday, November 25, 2008

Obama's Cabinet


Independent, UK - Before Hillary Clinton has been formally offered the job as Secretary of State, a purge of Barack Obama's top foreign policy team has begun. The advisers who helped trash the former First Lady's foreign policy credentials on the campaign trail are being brutally shunted aside, as the price of her accepting the job of being the public face of America to the world. In negotiations with Mr Obama this week before agreeing to take the job, she demanded and received assurances that she alone should appoint staff to the State Department. She also got assurances that she will have direct access to the President and will not have to go through his foreign policy advisers on the National Security Council, which is where many of her critics in the Obama team are expected to end up.

The first victims of Mrs Clinton's anticipated appointment will be those who defended Mr Obama's flanks on the campaign trail. By mocking Mrs Clinton's claims to have landed under sniper fire in Bosnia or pouring scorn on her much-ballyhooed claim to have visited 80 countries as First Lady they successfully deflected the damaging charge that he is a lightweight on international issues.

Foremost among the victims of the purges is her old Yale Law School buddy Greg Craig, a man who more than anyone led the rescue of his presidency starting the very night Kenneth Starr's lurid report into the squalid details of the former president's sex scandal with Monica Lewinsky were published on the internet in 1998. Despite his long and loyal friendship with the Clintons, Mr Craig threw his lot in with Mr Obama at an early stage in the presidential election campaign. As if that betrayal to the cause of the Clinton restoration was not enough, Mr Craig did more to undermine Mrs Clinton's claims to be a foreign policy expert than anyone else in the some of the ugliest exchanges of the battle for the Democratic nomination.

Until this week he was poised to be the eminence grise of the State Department, organizing as total revamp of America's troubled foreign policies on Mr Obama's behalf. . . [Clinton] wanted guarantees of direct access to the president - without having to go through his national security adviser. Above all she did not want to end up like Colin Powell who was completely out-maneuvered by the hawkish Vice President Dick Cheney who imposed neo-conservative friends like John Bolton on the State Department and steered the US towards a policy of using torture to achieve its aims.

Mr Craig's crime was not so much that he enthusiastically backed Mr Obama for President and helped run his foreign policy advisory panel, it was his lacerating attacks on the putative Secretary of State's claims that she passed the "Commander-in-Chief test" as a foreign policy expert in the Clinton Administration. In a devastating memo of 11 March last, which he addressed "to interested parties," Mr Craig said: There is no reason to believe, however, that she was a key player in foreign policy at any time during the Clinton Administration. She did not sit in on National Security Council meetings. She did not have a security clearance. She did not attend meetings in the Situation Room. She did not manage any part of the national security bureaucracy, nor did she have her own national security staff."

"She did not do any heavy-lifting with foreign governments, whether they were friendly or not. She never managed a foreign policy crisis, and there is no evidence to suggest that she participated in the decision-making that occurred in connection with any such crisis."

The memo went on to say that Mrs Clinton "never answered the phone either to make a decision on any pressing national security issue - not at 3 AM or at any other time of day." Earlier this week Mr Craig was tapped to become White House counsel, a totally anonymous position, and shunted him out of the line of fire from the Secretary of State.

A question remains about the fate of Susan Rice, the public face of Mr Obama's foreign policy throughout the campaign. She too had been expected to take a prominent position at the State department, but in a conference call with reporters during the campaign she ridiculed Mr Clinton's claims to foreign Policy experience.

She may now end up as Deputy national Security adviser to the president, in the expectation that she would be frozen out by Mrs Clinton at the State Department, a situation that does not augur well for the future. . .


NY Times
- President-elect Barack Obama is expected to name Lawrence H. Summers as his pick to head the National Economic Council, an aide to Mr. Obama said.


Mark Ames, Nation - From the start, [Lawrence] Summers has been on the wrong side of Obama's supporters. In 1982, while still a graduate student at Harvard, Summers was brought to Washington by his dissertation advisor Martin Feldstein, the supply-side economist, to serve on Ronald Reagan's Council of Economic Advisors. Those first years in the Reagan administration were crucial in the right-wing war against New Deal regulation of the banking system and financial markets -- a war that Reagan's team won, and that we're all paying for today. Although Summers eventually identified himself with the Democratic Party -- albeit the right wing of that party -- nevertheless, as the New York Times's Peter T. Kilborn wrote in 1988:

He worked for 10 months as a top analyst in President Reagan's Council of Economic Advisers when his mentor, Martin S. Feldstein, was running it, and his colleagues don't recall him venting anti-Reagan heresies then. "One of the ironies of this business is that Summers's economics are quite close to Feldstein's," said William A. Niskanen, who was a member of the Feldstein council. . .

Some fifteen years after Summers's stint in the Reaganomics war room, he reappears as one of the key villains fighting to suppress the regulatory efforts of a top official, Brooksley Born, who was trying to call attention to the dangers of the unregulated derivatives, such as credit swap defaults, which today are considered the key to the current economic crisis. . .

Progressive Review - In 1991, Larry Summers signed a memo when he was vice president and chief economist of the World Bank concerning the handling of pollution in less wealthy lands. When an excerpt of the memo was leaked, more than a few people became upset. Summers initially took responsibility for the memo but claimed it was satirical. Later, blame for writing the memo was taken by aide Lant Pritchett. Pritichett went on to lecture at the Harvard Kennedy School and Summers went on to be president of Harvard.

If the memo was in fact intended to be humorous, whoever wrote it didn't understand that humor used again the poor and defenseless is not satire but ridicule and bigotry. The fact that Summers thought it funny should disqualify him from any government position.

The excerpt:

|||| 'Dirty' Industries: Just between you and me, shouldn't the World Bank be encouraging MORE migration of the dirty industries to the LDCs [Less Developed Countries]? I can think of three reasons:

1) The measurements of the costs of health impairing pollution depends on the foregone earnings from increased morbidity and mortality. From this point of view a given amount of health impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wages. I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that.

2) The costs of pollution are likely to be non-linear as the initial increments of pollution probably have very low cost. I've always though that under-populated countries in Africa are vastly UNDER-polluted, their air quality is probably vastly inefficiently low compared to Los Angeles or Mexico City. Only the lamentable facts that so much pollution is generated by non-tradable industries (transport, electrical generation) and that the unit transport costs of solid waste are so high prevent world welfare enhancing trade in air pollution and waste.

3) The demand for a clean environment for aesthetic and health reasons is likely to have very high income elasticity. The concern over an agent that causes a one in a million change in the odds of prostrate cancer is obviously going to be much higher in a country where people survive to get prostrate cancer than in a country where under 5 mortality is is 200 per thousand. Also, much of the concern over industrial atmosphere discharge is about visibility impairing particulates. These discharges may have very little direct health impact. Clearly trade in goods that embody aesthetic pollution concerns could be welfare enhancing. While production is mobile the consumption of pretty air is a non-tradable.

The problem with the arguments against all of these proposals for more pollution in LDCs (intrinsic rights to certain goods, moral reasons, social concerns, lack of adequate markets, etc.) could be turned around and used more or less effectively against every Bank proposal for liberalization. ||||

While Summers and Pritchett survived the memo incident, the Brazilian secretary of the environment was not as fortunate. He was fired after writing to Summers:

"Your reasoning is perfectly logical but totally insane. . . Your thoughts [provide] a concrete example of the unbelievable alienation, reductionist thinking, social ruthlessness and the arrogant ignorance of many conventional 'economists' concerning the nature of the world we live in. . . If the World Bank keeps you as vice president it will lose all credibility."

Composer John Halle has memorialized this seedy memo and the Brazilian official's reply with a musical number performed by the Sequitur Ensemble, Kristin Nordeval and Dora Ohrenstein, sopranos.

Heidi Przybyla, Bloomberg - Summers, a Harvard economist who worked under Rubin in the Treasury before replacing him as secretary, joined his boss in defeating an effort to rein in over- the-counter derivatives in 1998.

Brooksley Born, then commissioner of the Commodity Futures Trading Commission, wanted to examine regulating the derivatives, including credit-default swaps, saying they posed "grave dangers'' to the economy. Federal Reserve Chairman Alan Greenspan and Rubin issued a rebuke, saying in a statement that they seriously questioned the scope of the CFTC's jurisdiction in this area.

Summers called Born and said he was with bank representatives in his office and they believed that the regulation would lead to an economic crisis, according to a person familiar with the situation who asked to remain anonymous. Summers declined to be interviewed for this article.

Summers and Rubin also helped secure passage of the 1999 Gramm-Leach-Bliley Act, aimed at spurring competition in banking. The law repealed the 1933 Glass-Steagall Act, which had prohibited commercial banks from offering investment and insurance services. Summers, 54, helped craft the legislation, and Rubin urged Congress to pass it and Clinton to sign it. . .


According to David Savage in the LA Times:

- As governor of Arizona, Janet Napolitano last year signed into law the nation's harshest penalty for employers who knowingly hire illegal immigrants, a measure that would take away their business licenses for a second violation.

- She signed a law that would take away the business license for the second violation of a company hiring illegal immigrants, what she called the "business death penalty." The Mexican American Legal Defense and Education Fund and the U.S. Chamber of Commerce went to court to block the measure. It has been approved by a federal judge but is under appeal.

- She opposed punishment against immigrants who are already here.

- She vetoed a bill that would have prevent illegal immigrants from getting state tuition assistance.

- She vetoes a bill that would have require the police to arrest illegal immigrants.

- She has an approval rating over 70%

- John Trazvina, president of the Mexican American Legal Defense and Education Fund: "Arizona has become one of the worst states for immigrants in this country."

- She did not support a border fence. Her reaction: "You show me a 50-foot wall, and I'll show you a 51-foot ladder," she has said.

- She favors a "temporary worker program with no amnesty."

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