Obama, Are You Asking For a Critique Already?

It didn't take very long to start critiquing Obama but after having read a Reuters article about his potential picks for the next Treasury Secretary, I felt I needed to comment. This is not to say that Obama yet deserves to be criticized, but I am already seeing the Washington bureaucracy and established order at work in his potential Treasury Secretaries.

Indeed, Obama's selection for this and other important roles in his administration will speak volumes about the approach he will take as president, and will give us a clue as to the man behind the 'cult figure.' Realistically speaking, how much decision making can one man (the president) really make? He will be relying on his inner circle to help him run the country, so his inner circle had better be up to par.

With the Treasury Secretary receiving all these new powers through the passage of the $700B bailout package, it was always obvious to me that it was not going to be Paulson excercising them, but his successor. So we should closely be watching who Obama is going to appoint in this crucial and increasingly important position. In my opinion, this should be someone with little ties to banks and corporations.

In fact, it should be a proven consumer advocate (i.e. someone who has consistently fought for the little guys) but that also has somewhat of a banking background, so that he can understand the mess and complexity of the issues that the banks and corporations have gotten us into. That way he would at least be in a position to propose intelligent and socially beneficial solutions to some of the problems facing the financial world today and tomorrow. I know I am probably being unrealistic in this expectation, but I try to be an optimist!

Lets take a look at the potential Trasury Secretaries one at a time:

1) Timothy Geithner, President of the Federal Reserve Bank of New York [profile]. A small amount of research into the US central banking system, i.e. the Federal Reserve, will show you that the most powerful, and essentially decision making branch, is the New York Fed. So my money is on Geithner taking the position for several reasons (please see the Muckety article below). This is not good news though. If you understand anything about how this system has been structured since 1913, you will realize that putting Geithner is just a continuation of the old debt-for-money scam and will do little to help 'Main Street', as the political elite have started calling it lately.

Greithner is closely affiliated to the Council on Foreign Relations and is chairman of the G-10’s Committee on Payment and Settlement Systems of the Bank for International Settlements. See his profile on the NY Fed website.

There is a great article about Tim Greither and some of his connections at news.muckety.com.


2) Former Treasury Secretary Lawrence Summers [profile]. Do I really need to say anything here? An old Treasury Secretary from the Clinton era, he has worked extensively in the Treasury. I very much doubt this will be Obama's pick so lets move to the next candidate on the list.


3) Former Federal Reserve Chairman Paul Volcker [profile]. Another member of the 'boys club.' He already served as Fed Chairman before Alan Greenspan. He has worked at both the New York Federal Reserve and the US Treasury, and is a powerhouse when it comes to political/corporate/banking connections. Definitely the second most likely candidate. The only reason I think he is unlikely to be chosen is because he flies in the face of Obamas 'Change' philosophy seeing as he is a well-established player in the game. Geithner is a lot more likely because he is young and is equivalently connected to the same crowd.

So in these three main choices, Obama is already starting to show his true colors, albeit wrapped in a much more politically attractive package. At the end of the day, will he be more loyal to the people who bankrolled him to the White House, or those that voted for him?

The following image illustrates who Obamas top campaign contributors were in the 2008 election campaign. I imagine a few people from these organizations will be filling positions in his new cabinet, especially from Goldman. Click on the image for more information.

I don't have an intelligent alternative suggestion, but I am open to hearing other people's ideas for who the next Treasury Secretary should be. Any ideas?


More readings:

Reuters - Obama considers Geithner, Summers for Treasury

Bloomberg - Summers, Emanuel Candidates for Obama Administration

International Herald Tribune - Obama Prepares to Name Key Team

Financial Post - Obama Must Pick Economic A-team