[Pen-l] Leading liberal blasts Obama's economic advisers

[Louis Proyect <lnp3@xxxxxxxxx>]

NY Times, December 7, 2008
Op-Ed Columnist
The Brightest Are Not Always the Best
By FRANK RICH

IN 1992, David Halberstam wrote a new introduction for the 
20th-anniversary edition of "The Best and the Brightest," his classic 
history of the hubristic J.F.K. team that would ultimately mire 
America in Vietnam. He noted that the book's title had entered the 
language, but not quite as he had hoped. "It is often misused," he 
wrote, "failing to carry the tone or irony that the original intended."

Halberstam died last year, but were he still around, I suspect he 
would be speaking up, loudly, right about now. As Barack Obama rolls 
out his cabinet, "the best and the brightest" has become the accolade 
du jour from Democrats (Senator Claire McCaskill of Missouri), 
Republicans (Senator John Warner of Virginia) and the press (George 
Stephanopoulos). Few seem to recall that the phrase, in its original 
coinage, was meant to strike a sardonic, not a flattering, note. 
Perhaps even Doris Kearns Goodwin would agree that it's time for 
Beltway reading groups to move on from "Team of Rivals" to Halberstam.

The stewards of the Vietnam fiasco had pedigrees uncannily 
reminiscent of some major Obama appointees. McGeorge Bundy, the 
national security adviser, was, as Halberstam put it, "a legend in 
his time at Groton, the brightest boy at Yale, dean of Harvard 
College at a precocious age." His deputy, Walt Rostow, "had always 
been a prodigy, always the youngest to do something," whether at 
Yale, M.I.T. or as a Rhodes scholar. Robert McNamara, the defense 
secretary, was the youngest and highest paid Harvard Business School 
assistant professor of his era before making a mark as a World War II 
Army analyst, and, at age 44, becoming the first non-Ford to lead the 
Ford Motor Company.

The rest is history that would destroy the presidency of Lyndon 
Johnson and inflict grave national wounds that only now are healing.

In the Obama transition, our Clinton-fixated political culture has 
been hyperventilating mainly over the national security team, but 
that's not what gives me pause. Hillary Clinton and Robert Gates were 
both wrong about the Iraq invasion, but neither of them were 
architects of that folly and both are far better known in recent 
years for consensus-building caution (at times to a fault in 
Clinton's case) than arrogance. Those who fear an outbreak of 
Clintonian drama in the administration keep warning that Obama has 
hired a secretary of state he can't fire. But why not take him at his 
word when he says "the buck will stop with me"? If Truman could 
cashier Gen. Douglas MacArthur, then surely Obama could fire a 
brand-name cabinet member in the (unlikely) event she goes rogue.

No, it's the economic team that evokes trace memories of our dark 
best-and-brightest past. Lawrence Summers, the new top economic 
adviser, was the youngest tenured professor in Harvard's history and 
is famous for never letting anyone forget his brilliance. It was his 
highhanded disregard for his own colleagues, not his impolitic 
remarks about gender and science, that forced him out of Harvard's 
presidency in four years. Timothy Geithner, the nominee for Treasury 
secretary, is the boy wonder president of the Federal Reserve Bank of 
New York. He comes with none of Summers's personal baggage, but his 
sparkling résumé is missing one crucial asset: experience outside 
academe and government, in the real world of business and finance. 
Postgraduate finishing school at Kissinger & Associates doesn't count.

Summers and Geithner are both protégés of another master of the 
universe, Robert Rubin. His appearance in the photo op for 
Obama-transition economic advisers three days after the election was, 
to put it mildly, disconcerting. Ever since his acclaimed service as 
Treasury secretary in the Clinton administration, Rubin has labored 
as a senior adviser and director at Citigroup, now being bailed out 
by taxpayers to the potential tune of some $300 billion. Somehow the 
all-seeing Rubin didn't notice the toxic mortgage-derivatives on 
Citi's books until it was too late. The Citi may never sleep, but he snored.

Geithner was no less tardy in discovering the reckless, wholesale 
gambling that went on in Wall Street's big casinos, all of which 
cratered while at least nominally under his regulatory watch. That a 
Hydra-headed banking monster like Citigroup came to be in the first 
place was a direct byproduct of deregulation championed by Rubin and 
Summers in Clinton's Treasury Department (where Geithner also 
served). The New Deal reform they helped repeal, the Glass-Steagall 
Act, had been enacted in 1933 in part because Citigroup's ancestor, 
National City Bank, had imploded after repackaging bad loans as toxic 
securities in the go-go 1920s.

Well, nobody's perfect. Given that John McCain's economic team was 
headlined by Carly Fiorina and Joe the Plumber, the country would be 
dodging a fiscal bullet even if Obama had picked Suze Orman. But I 
keep wondering why the honeymoon hagiography about the best and the 
brightest has been so over the top. Washington's cheerleading for our 
new New Frontier cabinet superstars has seldom been interrupted by 
tough questions about Summers's Harvard career or Geithner's record 
at the Fed. For that, it's best to turn to the business press: Andrew 
Ross Sorkin at The New York Times, for one, has been relentless in 
trying to ferret out Geithner's opaque role in the catastrophic 
decision to let Lehman Brothers fail.

No doubt the Pavlovian ovations for the Obama team are in part a 
reaction to our immediate political past. After eight years of a 
presidency that valued cronyism over brains (or even competence) and 
embraced an anti-intellectualism apotheosized by Sarah Palin, it's a 
godsend to have a president who puts a premium on merit. I also 
wonder if a press corps that underrated Obama's political prowess for 
much of the campaign, demeaning him as a professorial wuss next to 
the brawny Clinton and McCain, is now overcompensating for that 
mistake. No one wants to miss out a second time on triumphal history 
in the making.

This, too, is a replay of what happened when Kennedy arrived, beating 
out the more seasoned Richard Nixon and ending eight years of 
Eisenhower rule. "Rarely had a new administration received such a 
sympathetic hearing at a personal level from the more serious and 
respected journalists of the city," Halberstam wrote. "The good 
reporters of that era, those who were well educated and who were 
enlightened themselves and worked for enlightened organizations, 
liked the Kennedys and were for the same things the Kennedys were 
for." They couldn't imagine that "men who were said to be the ablest 
to serve in government in this century" would turn out to be 
architects of America's "worst tragedy since the Civil War."

Post-Iraq, we're unlikely to rush into a new Vietnam. But we ignore 
the past's lessons at our peril. In his 20th-anniversary reflections, 
Halberstam wrote that his favorite passage in his book was the one 
where Johnson, after his first Kennedy cabinet meeting, raved to his 
mentor, the speaker of the House, Sam Rayburn, about all the 
president's brilliant men. "You may be right, and they may be every 
bit as intelligent as you say," Rayburn responded, "but I'd feel a 
whole lot better about them if just one of them had run for sheriff once."

Halberstam loved that story because it underlined the weakness of the 
Kennedy team: "the difference between intelligence and wisdom, 
between the abstract quickness and verbal facility which the team 
exuded, and true wisdom, which is the product of hard-won, often 
bitter experience." That difference was clearly delineated in 
Vietnam, where American soldiers, officials and reporters could see 
that the war was going badly even as McNamara brusquely wielded 
charts and crunched numbers to enforce his conviction that victory was assured.

In our current financial quagmire, there have also been those who had 
the wisdom to sound alarms before Rubin, Summers or Geithner did. 
Among them were not just economists like Joseph Stiglitz and Nouriel 
Roubini but also Doris Dungey, a 47-year-old financial blogger known 
as Tanta, who died of cancer in Upper Marlboro, Md., last Sunday. As 
the Times obituary observed, "her first post, in December 2006, took 
issue with an optimistic Citigroup report that maintained that the 
mortgage industry would 'rationalize' in 2007, to the benefit of 
larger players like, well, Citigroup." It was months before the 
others publicly echoed her judgment.

For some of J.F.K.'s best and brightest, Halberstam wrote, wisdom 
came "after Vietnam." We have to hope that wisdom is coming to 
Summers and Geithner as they struggle with our financial Tet. Clearly 
it has not come to Rubin. Asked by The Times in April if he'd made 
any mistakes at Citigroup, he sounded as self-deluded as McNamara in 
retirement.

"I honestly don't know," Rubin answered. "In hindsight, there are a 
lot of things we'd do differently. But in the context of the facts as 
I knew them and my role, I'm inclined to think probably not." Since 
that interview, 52,000 Citigroup employees have been laid off but not 
Rubin, who remains remorseless, collecting a salary that has totaled 
in excess of $115 million since 1999. You may be touched to hear that 
he is voluntarily relinquishing his bonus this Christmas.

Rubin hasn't been seen in a transition photo op since Nov. 7, and in 
the end Obama chose Paul Volcker as chairman of his Economic Recovery 
Advisory Board. This was a presidential decision not only bright but wise.

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