Monday, November 10, 2008

The Hangers-On

The Washington Post reported today on several Bush appointees that will remain for at least the beginning of the Obama Administration:

"In confronting the financial crisis and weakening economy, Obama must turn to Ben S. Bernanke, a Republican and former chairman of President Bush's Council of Economic Advisers, who will lead the Federal Reserve for at least the first year of the new administration. In assuming control of the wars in Iraq and Afghanistan, Obama must work with Adm. Michael Mullen, chairman of the Joint Chiefs of Staff, who was appointed by Defense Secretary Robert M. Gates for a two-year term that will end in late 2009 and, by tradition, can expect to be appointed for a second term as the president's top military adviser. Mullen shares Obama's belief in focusing more on Afghanistan but is wary of a timeline for withdrawing troops from Iraq. And in guarding against terrorist attacks -- while correcting what he considers the Bush administration's excesses -- Obama will rely upon FBI Director Robert S. Mueller III, whose term expires in 2011."

The default reaction to this news, from the progressive side, may be dismay. But as far as people who have to be held over from the Bush Administration, I don't think this is a bad group.
Ben Bernanke deserves quite of lot of the criticism he has received for responding slowly to the subprime mortgage crisis. But there is some more recent blame that Bernanke has absorbed that was not due. When the $700 billion bailout passed, congressional Democrats insisted on writing into the bill the ability for officials to use the money for "equity injections." Treasury Secretary, Hank Paulson, insisted repeatedly that he did not want this authority. Thankfully, Democrats forced it in there.

A few days later, British prime minister, Gordon Brown, recapitalized his country's banks and eased the freeze on the credit market in Britain. Shortly thereafter, American officials, led by Paulson, hinted they were leaning towards using the money in a similar, but recently vehemently opposed, fashion and their subsequent actions have eased the credit markets. Bernanke, it turns out, was in favor of the authority for equity injections but it was Paulson who shouted him down. As Paul Krugman wrote in an October 12 NY Times column:

"This sort of temporary part-nationalization, which is often referred to as an “equity injection,” is the crisis solution advocated by many economists — and sources told The Times that it was also the solution privately favored by Ben Bernanke, the Federal Reserve chairman. But when Henry Paulson, the U.S. Treasury secretary, announced his plan for a $700 billion financial bailout, he rejected this obvious path, saying, 'That’s what you do when you have failure.' Instead, he called for government purchases of toxic mortgage-backed securities, based on the theory that ... actually, it never was clear what his theory was."

Bernanke has seemed timid in this government and forced aside by partisan, ideological economic agendas and "solutions." I think an Obama Administration that urged him to have a more vocal role, with less partisan pressure, may find a more dynamic Bernanke than we've seen.

Admiral Mike Mullen shares Barack Obama's concern towards Afganistan but places Iraq ahead of Afghanistan in terms of military priorities. While Mullen is not a partisan appointment of Bush's, he and Obama will have to reconcile their views on the relative importances of Iraq and Afghanistan. From the Post:

"On the two wars, Mullen's views align broadly with those of the president-elect: He sees an urgent need to devote more troops and resources to Afghanistan, and he supports continuing troop reductions from Iraq. But there are also important differences: Although Obama has long cast Afghanistan as the only legitimate war to pursue in response to the Sept. 11, 2001, attacks, Mullen's priorities for that country are driven more by the escalating insurgency since 2006 than by any sense that Iraq is the wrong war for U.S. troops."

As an aside to this, Robert Gates may also stay on as Secretary of Defense. While Gates is a Mozart to Rumsfeld's Salieri (sorry Salieri, you don't deserve that kind of company), I don't like the idea of leaving him around for another year because he's part of the "Surge" architecture and the "Surge" is farce and a scam and Americans are clueless to its true nature. Even so, it may be difficult to get another Secretary of Defense up to speed in time to adopt two precarious (to say the least) wars seamlessly. Maybe Chuck Hagel would be ready for it, though...

Robert Mueller better stop wiretapping my damn cellphone. This has more to do with Obama deciding how to use his executive powers (or not use them) than it does with the man himself. I wrote about this in a column on my other blog in June of this year called "Barack Obama and the Theory of the Unitary Executive" which I encourage you to read. Money quote:

"[Obama's] supporters, myself included, expect monumental changes that will be difficult and time-consuming to achieve. Will Barack feel pressure to use his executive power - power swollen by Bush and friends - to make change quickly? Or will he be able to temper his people's expectations, encourage patience and deliberation, and perform the near contradictory tasks of simultaneously resizing the role of the executive and tackling the wounded economy and working on withdrawal from Iraq."

Hopefully, Obama will put an immediate end to the most egregious examples of Bush's anti-constitutional methods. I expect some will end, and some will not, and I expect to be disappointed. How well Mueller works out has to do with the limits Obama places on him, not the man himself.

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