Some headlines require no story, as they tell the story. Today we see confirmed the fear that the Obama Administration would be staffed with inexperienced liberals, whose only qualification are diplomas from elite schools, fine connections in the power structure, and sound ideology.
Of course, it does not matter. We’re sheep, and will accept this unqualified new addition to our shepherds without protest. Get into the spirit of our nation: while reading this say “baa baa baa“.
Are we capable of self-government? Are we worthy of the privilege of self-government? If you believe the answer is yes, I suggesting getting angry soon. The situation is sliding downhill fast, and we cannot count on the Blue Fairy to fix things.
Today’s example: “The 31-Year-Old in Charge of Dismantling G.M.“, New York Times, 1 June 2009 — Opening:
It is not every 31-year-old who, in a first government job, finds himself dismantling General Motors and rewriting the rules of American capitalism. But that, in short, is the job description for Brian Deese, a not-quite graduate of Yale Law School who had never set foot in an automotive assembly plant until he took on his nearly unseen role in remaking the American automotive industry.
Nor, for that matter, had he given much thought to what ailed an industry that had been in decline ever since he was born. A bit laconic and looking every bit the just-out-of-graduate-school student adjusting to life in the West Wing — “he’s got this beard that appears and disappears,” says Steven Rattner, one of the leaders of President Obama’s automotive task force — Mr. Deese was thrown into the auto industry’s maelstrom as soon the election-night parties ended.
“There was a time between Nov. 4 and mid-February when I was the only full-time member of the auto task force,” Mr. Deese, a special assistant to the president for economic policy, acknowledged recently as he hurried between his desk at the White House and the Treasury building next door. “It was a little scary.”
But now, according to those who joined him in the middle of his crash course about the automakers’ downward spiral, he has emerged as one of the most influential voices in what may become President Obama’s biggest experiment yet in federal economic intervention. While far more prominent members of the administration are making the big decisions about Detroit, it is Mr. Deese who is often narrowing their options.
I recommend reading this in full. It gets worse. Here is Deese’s Wikipedia entry.
The Bush Administration did the same, but at least sent them overseas to screw-up Iraq.
Don’t count on the Obama Administration getting useful feedback from the liberal intelligentsia. Just as most conservative intellectuals followed Bush Jr. off the cliff — cheering wildly — their liberal peers are doing the same with Obama. Exhibit #1 is Matthew Yglesias. An insightful critic of the Bush Administration’s follies, he appears to have lost his mind when writing about Team Obama. He has this to say about this key appointment:
Meanwhile, it seems that the man now running the auto industry is Brian Deese who got his start right here at CAP/AF working for Gene Sperling.
You tell them, Yglesias! Speaking truth to power!
I expect that during the Obama Administration the US government will expand its reach deeper into American society, growing in every dimension of power. This crucial appointment suggests that its expertise, effectiveness, and efficiency will not increase.
Afterword
Please share your comments by posting below. Per the FM site’s Comment Policy, please make them brief (250 word max), civil and relevant to this post. Or email me at fabmaximus at hotmail dot com (note the spam-protected spelling).
For information about this site see the About page, at the top of the right-side menu bar.
For more information from the FM site
To read other articles about the Obama Administration, see the FM reference page (on the right side menu bar) about Obama, his administration and Ameican policies today. It has these 4 sections:
- About President Obama
- About Team Obama
- About change
- About the policies of the Obama Administration
Posts about Team Obama (section 2):
- Secretary Gates would be a hero – if speeches could reform DoD, 6 May 2008
- I was wrong about SecDef Gates – here is a more accurate view of him, 7 May 2008
- Biden’s gaffes are a threat to American’s complacency!, 13 September 2008
- Obama’s national security team: I hope you didn’t really believe in change?, 26 November 2008
- Obama’s cabinet are the best and brightest (here we go, again), 20 February 2009
- The media rolls over and plays dead for Obama, as it does for all new Presidents (Democrats only, of course), 19 February 2009
I should have just skipped to the comments! I would have missed your deft evasion of the obvious: “The Bush Administration did the same, but at least sent them overseas to screw-up Iraq.”
The difference, dear leader, is that Bush did it in spades in Iraq, not just one inexperienced guy monitoring one company, but one inexperienced guy monitoring the whole banking system. And there were dozens of Bush appointees in Iraq, apparently, who had no background at all other than having beeen Young Republicans, or worked for the RNC. Deese may be green, but he’s the one who’s been selling and explaining the bankruptcy plan to Congress and the public, not to mention GM itself. Evidently he’s a quick study. Too bad they didn’t pick someone like him to supervise the bank bailouts.
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Fabius Maximus replies: First, since most experts consider the GM bailout daft, that he’s expalining it to our politicos does not fill me with joy. Second, the Bush appointees were not supposed to (even on paper) be running the Iraq government (though they were, as I note, incompetent to assist in any meaningful capacity). Third, on what basis do you consider this a one-off event (Bush did it in spades in Iraq, not just one inexperienced guy monitoring one company). More likely this is a indicative of a serious system failure.
I know that it’s not in vogue to make comments apparently supporting the greedy investor class that (lumped together as the amorphous “them”) have all made off with billions of taxpayer money, but…
Would someone please explain to me how it’s “better” in any sense of the word to have this inexperienced, unelected guy, bright as he is, making decisions that direct the economic life and death of a once proud industry? I mean, wouldn’t it make more sense to follow normal bankruptcy law and let creditors and/or investors, who at least have some skin in the game, to chart the course? Instead of this youthful bureaucrat who has little accountability if he makes huge mistakes?
The arrogance!
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Fabius Maximus replies: I hope you are wrong that writing such things is not in vogue, as I’d hate to think that I was not in the advant-garde.
There exist proven mechanisms for handling insolvent banks and industrial firms. Avoiding liquidation is the goal of Chapter 11 of the United States Bankruptcy Code. Government assistance, perhaps legislative and financial, could have greased this process.
The Bush and Obama administrations have chosen to by-pass the standard process for politically powerful corporations, creditors, and unions. Instead of forcing necessary re-organization, including eliminating their sufficating burden of debt (converting the creditor’s interest into equity ownership), they have instead chosen to provide a special few firms with gifts of government money — funded by borrowing.
For the banks, the prime creditor is the US government, acting through FDIC. A government take-over, reorganization, and sale probably would have been far cheaper to the taxpayer, and avoided the massive moral hazard created by the Bush/Obama program (financail firms now have a “heads they win, tails we lose” guarantee).
For Chrysler and GM (and eventually Ford), chapter 11 would put those firms on a sound footing. I know of no experts who believe the current plans will do so.
Yglesias can’t help but to cheerlead his own from CFAP, although his posts about national security resonate a subtle disdain for Michelle Flourney and CNAS. Whether this is Yglesias’s way of pouting after not getting picked on the team, or some thoughtful argument against the Nagl Dominated COIN theory is another subject entirely.
I don’t get your objection. Reading the article closely, it’s pretty clear the kid’s a glorified gopher. He does the research grunt work, runs errands between the principals, and generally acts as Summers and Rattner’s chief butt-boy. He runs the auto industry about as much as Vikram Pandit’s receptionist runs Citibank.
The only remarkable thing is, apparently the Obama people actually listen when underlings have ideas. That’s a good way to run an organization. Have an open door and open ears; and smart people will work themselves to the bone for you for practically nothing.
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Fabius Maximus replies: In your theory, who in the government is the responsible executive for the auto bailouts? I don’t mean in a titular sense, like the President or Obama. In a real sense, as the person with the knowledge and experience to assume responsibility for making recommendations? It looks like Deese is that man, but without the knowledge and experience.
Comemtn #4: Define smart. Lawyers shouldn’t engineer a gas plant and engineers shouldn’t launch an advertising campaign. From the article:
Even if he knew of a great way to make GM profitable, he has other competing interests that mute the scheme.
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Fabius Maximus replies: This article describes government decision-making at its most disfunctional. Deese has nothing like the necessary foundation of experience and training to be writing such a memo. That people believe this rational just demonstrates the broken reasoning that has put America in such a hole.
@FM: I think the prospects of Ford are looking up. The wreckage of GM and Chrysler must have put the fear of Godverment in them, the flexibility to build what they want gives them more agility in the industry, and lots of “Buy American” conservatives will never buy Chrysler or GM again. {snip}
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Fabius Maximus replies: Discussion of investments are off-topic; there are hundreds of websites for that. Your comment looks like wild speculation. Esp your guessing as to loss of market share by GM and Chryser. It might just as easily be that the bankruptcies and government aid give GM and Chrysler a competative edge to Ford — forcing Ford to follow suit. Nobody has a good record of predicting such things.
I think it was a young lieutenant who arbitrarily drew the line demarcating the border between India and Pakistan. That worked out great, didn’t it?
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Fabius Maximus replies: No. The division between the two new dominions was done according to the “3 June Plan”, aka the “Mountbatten Plan.” The border between India and Pakistan was determined by a British Government-commissioned report usually referred to as the Radcliffe Line. Here is an excerpt from the Wikipedia entry about the Radcliffe Line (note footnotes to links for more info):
Here is a link: “Pakistan’s British-Drawn Borders“, blog of the New York Times, 5 May 2009
Pakistan’s other borders were created in 1947 by another British colonial officer, Sir Cyril Radcliffe, who was made chairman of the boundary commission and given six weeks to carve a Muslim-majority state from British India. As the historian Karl Meyer wrote in his book “The Dust of Empire,” Sir Cyril “was a curious choice,” since he had never previously visited India. In a chapter called “Pakistan: Sins of Partition,” Mr. Meyer explained:
As Radcliffe’s former private secretary, Christopher Beaumont, later remarked in an interview, the chairman had never traveled east and “was a bit flummoxed by the whole thing. It was a rather impossible assignment, really. To partition that subcontinent in six weeks was absurd.”
Hundreds of thousands of people died in the ethnic cleansing that followed the imposition of the new border Sir Cyril drew between India and Pakistan. W.H. Auden made the absurdity of the way the border was created the subject of the poem “Partition,” published in 1966.
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Fabius Maximus replies: This comment conflates two issues. The NYT article discusses the Durand Line between Afghanistan and Pakistan, not the Pakistan-India border. Neither was randomly done, nor was either the result of one person’s work. Considering the centuries-long, bloody process of establishing Europes borders, let’s not pretend this process is easy.
See the above entry for details of the Pak-India border. Here is an excerpt from the Wikipedia entry on the Durand Line:
My only point was that Sir Cyril was thrown to the dogs with zero background or experience to perform by remote control a Herculean task. Same as poor Mr. Deese. They were both lawyers too.
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Fabius Maximus replies: The comparison is absurd. Lord Radcliff was 47 when appointed Chairman of the 2 boundary commissions. He was a prominent attorney, Director-General of the Ministry of Information during WWII. Although not an area expert, he is the sort of eminent person appointed to head these committees. Nor did he act alone. From “Drawing the Indo-Pakistan Boundary“, Lucy Chester (Ast Prof of History, U of CO), American Diplomacy, February 2002:
The problem was the time allowed, as the political process was spinning out of control. Unlike GM, which has been slowly fading to bankruptcy since late 2008. Perhaps the primary difference is that there is a clear and tested process of business bankruptcies, unlike the partition of the sub-continent.
“Third, on what basis do you consider this a one-off event (Bush did it in spades in Iraq, not just one inexperienced guy monitoring one company). More likely this is a indicative of a serious system failure.” (FM comment on #1)
What is the system failure — failure to bring in seasoned professionals to supervise a process? How do you define a seasoned professional — someone who’s worked in the industry a long time? That’s how the government has handled the financial failure so far — by letting the banks who brought on the crisis dictate their own rescue terms. Are you recommending this as a better approach?
Or by seasoned professionals do you mean academic specialists in the subject — like Lawrence Summers?
In the history of government regulation of business, from the Progressive Era forward, industry has largely written the terms and provided the supervisory personnel. You seem to be suggesting that the Obama administration wasn’t capable of finding a trusted hack, or dignified senior figure, to act as figurehead for industry-friendly regorms. The truth may be rather that the auto industry itself had no idea what to do, and washed its hands of responsibility.
Deese’s role may be nothing more than that of an auctioneer, trying to get the highest price for each part, or, as someone said above, an errand boy between Geithner and Summers. The interesting question will be who will make the decision about whether to close the plants in Michigan and Indiana and move them to non-union plants in the South.
FM replies: “In your theory, who in the government is the responsible executive for the auto bailouts?”
The Presidential Task Force on the Auto Industry is officially chaired by Geithner and Summers, although Geithner is de facto represented by Steve Rattner. So to answer your question: Summers and Rattner are in charge – an academic apologist for the banksters turned hedge fund geek and a journalistic apologist for the banksters turned private capital joker.
That’s what concerns me far, far more about this deal than some young ignoramus in charge of running their errands.
This NYT article is, by the way, of a piece with a more odious side of Summers’ management style: elevate a talented underling to public prominence but little real power; then when your own policy fails, let the underling take the blame and enlarge your own power. (See: Geithner, Tim).
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Fabius Maximus replies: You miss the point I made. While very senior people with broad experience are nominally in charge, projects like these are run (i.e., largely influenced) by the most senior person assigned to this full time. He (or she) prepares the materials fed to the actual decision-makers, and hence has a big role shaping the final decision. Saying that this person “runs their errands” is factually incorrect. In this case that person knows almost nothing about the issue, and has even less experience. That suggests a sound decision is unlikely.
Problems with the most senior Obama team are a distinct and seperate problem from that discussed in this post.
FM: “The Bush and Obama administrations have chosen to by-pass the standard process for politically powerful corporations, creditors, and unions.”
Some discussion type questions on this statement — what may be the heart of the topic:
What is the process by which corporations, creditors, and unions, etc. become politically powerful?
How did this process grow powerful in our constitutional republic?
Is there a difference between economic power and political power?
Would a higher, thicker wall between business and government, excepting court protection from force and fraud, answer our present problems dynamic? If not, why not?
Does anyone really think the NY Times has any idea what is actually going on?
Obama inherited an economic disaster. In his brief time as a legislator he showed no interest in the problem and contributed nothing. He ran a much better campaign that McCain, not hard, has appointed a dreadful bunch of Clinton retreads who are contributing to the looting of the country which they participated in over the last dozen years. It is obvious that there is no good reason to prevent the auto companies from going into bankruptcy or taking the banks to the same therapy the S&Ls were subjected to. What has prevented this? For the banks, simple old-fashioned corruption; for the cars, the influences of the unions and the huge pension/health funds they hold on their books which are tied to all kinds of financial and institutional interests which are never discussed. These companies stopped being car companies some time ago and morphed into financial institutions of a peculiar sort.
Now we are preventing the reckoning. This person cannot wait for the Walt Whitman in the breast of each American to awaken and remember the taste of honest freedom. Free us from these fools, enough already with Harvard and Yale, and Berkeley too. As one of my great teachers nobly said at a Harvard faculty meeting, I would rather be governed by the first two hundred names in the Boston telephone directory than this body of fools.
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Fabius Maximus replies: I suspect that the folks at the NYT have a very good idea what is going on. Journalists often do, however coy their reports in print. Also, that quote is from William F. Buckley Jr; see Wikiquote for specific citations.
Once there is nothing left to steal, we will be abandoned to our own devices. But by then, will anyone left be capable of self sufficiency? I do hope that North America of the 22nd century is not to be the Africa of the 20th.
Journalists are largely leftist in sympathy, so why would they rain on Obama’s parade now that leftists have virtually complete control of the ongoing destruction.
It is all leftists from here on out. No surprise that your lefty commenters are up in arms at the least criticism of Obama. The wagons are not the only thing they are circling.
Something like an inverse Peter Principle operates in large organizations. It happens like this: you staff the top positions with superstars, genuine experts — but they have to spend all their time and energy formulating policy, and then battling the other insiders to get those policies OK’d. By the time they’ve done all that, the top superstars with experience and knowledge have no time left to actually implement the policies. So the policies get delegated. But the next echelon of experts don’t have time to implement the policies either, since they’ve gotten dragged into the brueaucratic infighting to support and push forward the policies. So the actual implementation of the policies trickles down and down to the least experienced and least knowledgeable people in the organization.
I don’t see this as something unique to the Obama administration. Throughout history, we constantly get minor functionaries setting details of policy that become enormously important and exerting overwhelming influence on the course of subsequent events. Classic example: Col. Joshua Lawrence Chamberlain’s peculiar textbook flanking maneuver on Little Round Top on day two of the Battle of Gettysburg, which arguably determined the entire course of the subsequent battle.
You also seem to suggest a Chapter 11 bankruptcy for GM and Chrysler to avoid a Chapter 7 liquidation, but this seems pointless. A typical Chapter 11 reorganization proves useful in a case where a company has built up excessive debts or suffers from a temporary cash flow shortage. By reorganizing its debts and settling with its creditors, the company can survive long enough for economic conditions to turn around.
But the American automotive industry is not undergoing some temporary downturn. All the available evidence shows that gasoline prices are headed permanently higher and Americans are moving away from the “Happy Motoring” car culture that characterized the U.S. economy from 1945 through the year 2000. Many pieces of evidence converge on this conclusion: for the first time, bicycle sales have outpaced new car sales. Automakers Fear A New Normal of Low Sales: “Trading in a car every three years is a luxury that the average American can no longer afford.” Also see: Ford, GM, expecting lower car sales than they forecast.
In much of the U.S. gasoline is now at or above $3.00 per gallon and we haven’t hit peak driving season yet this summer. Add in the chronic gridlock of freeways in big cities and bumper-to-dumper traffic throughout the rush hour, and you get the incredibly low sales numbers cited in General Motors Death Watch 254: All That You Dream.
The reality is that it doesn’t matter whether some ignorant unqualified 31-year-old is bollixing up GM’s bankrupcty, because the car industry and car culture is going away, like the newspaper industry and the record companies and the book companies.
100 lb , 30 mph vertical take-off missiles in protective covering , with high differential visio – audio systems and logic capacity . Capable in mid-air contact ,of breaking my employee’s sternum and collapsing her lung ,last weekend . Please show sheep more respec’ , FM .
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Fabius Maximus replies: I do not understand to what you are referring.
So here’s the question. Now that Ford has UAW representing all its factory workers, while UAW is majority owner for Chrysler and GM, can Ford unilaterally sever the union representation agreement for its US operations based on the UAW’s conflict of interest?
I suspect anna nicholas’s employee was sky-diving and ran into a sheep at a high rate of speed. I don’t know what this has to do with the topic, but if I were the sheep that broke the government’s sternum I’d be proud of it.
Comment 17 describes sheep (accurately) as intelligent and dangerous self-guided missiles. Calling people “sheep” sounds like an insult…unless you’ve ever been faced with an angry ram.
I’m not agreeing with Anna Nicholas, just explaining what she meant. Even more dangerous than sheep are boars, and worst of all, tiny little monkeys. A lab monkey can blind you or kill you so fast you can’t believe it. We humans like to think we’re masters of the world, but animals like sheep can be amazingly intelligent and dangerous.
Comment #15: As the only leftist commenter on the site that I’m aware of, I deny any wish to defend the new President. In foreign policy and in the current economic crisis, he is only following the bi-partisan policies of the past thirty years. I was only defending him against a patent bit of swift-boating from the right, for doing exactly what Bush had done to much greater degrees in the early occupation of Iraq — a far more serious breach of responsibility than mishandling (if so it is) of the bankruptcy of one US company.
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Fabius Maximus replies: You must be having a bad day. There are lots of other leftist commentators, here. To mention just one: Sgt Oblat (here) ranting about Mark Steyn and my right-wing biases.
(1) “In foreign policy and in the current economic crisis, he is only following the bi-partisan policies of the past thirty years.”
You might have mentioned that since the election I’ve written a dozen or so posts saying the exact same thing.
(2) I was only defending him against a patent bit of swift-boating from the right, for doing exactly what Bush had done to much greater degrees in the early occupation of Iraq — a far more serious breach of responsibility than mishandling (if so it is) of the bankruptcy of one US company.
I do not believe this to be a fair characterization of this post, or what others are saying. This is presented as indicative of the Obama Administration’s modus operandi. It does not say even remotely that this one appointment is equivalent to the Bush Administration’s actions over a longer period of time.
The thing I don’t get is: Why isn’t the bond market imposing more discipline on us? Why is China still buying our paper at such low yields? I know our central bank can and is holding treasury yields down by Q.E. but why isn’t the corporate bond market freaked out by this? Who in their right minds is going to roll over our corporate unsecured debt, or their secured debt for that matter, at current yields?
I know in the valley of the blind the one eyed man is king, but is the whole world really in such bad shape that we’re still looking like a good investment? What will it take for the rest of the world to say, “Enough! You guys are a bad risk.”?
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Fabius Maximus replies: The bond market is dominated by two groups. First, central banks buying Treasury bonds to maintain their Bretton Woods II merchantilist economic strategies. Inflation has been a minor concern vs. the short-term benefits of export growth. This may be changing, but only slowly. Second, institutional investors. They are backwards-looking, and inflation has been falling for 25+ years.
Current yields on corporate debt are high — not low — vs. the current rate of US inflation.
McClaren has it right/ It really doesn’t matter what lap dog/ shill/ stooge they put in charge of the dismantling of an ICON – he’s only the ‘public’ entity, for what has already been plotted and planned for some time now. Our ‘Happy Motoring’ days are indeed over. Gas will go UP and UP! We’ll have our RAT-MOBILES, enough to get us to our “in-town” $12.00 an hr. drone job/ then home again, to our ‘work force’ housing (insidiously being put in place across the country).
The auto industry died when the corporate/ political hacks, partnered with the oil barons, took over. Hey at least now, (RAT CARS) we can do away with seat belts/airbags! Let one of those Mexican semis hit you and you have a built-in shroud and coffin! As for the Peter Principle – I prefer to stay safe at my level of ‘creative incompetence’.
Hmm – I wonder how all those relics in the Senate feel (privately) about our media created Messiah/ ready to rule the world with a hefty 141 days as a Junior Senator? Gone forever, the auto worker’s son/daughter (also steel – mfg) becoming an engineer – doctor – or cradle to grave frat boy politician!!
I recall my dad taking us for rides in the country, in a car with real chrome (Oldsmobile Holiday convertible). Every kid had a car he could ‘work on’! An era gone never to be replaced. I suspect that these 3000 closed dealerships, will be readied for the 700,000 S.Korean imports, Chinese Hummers/ Pod cars!! As for DEBT – or BAD RISK. Though not reported in our media, Bejing students hooted and laughed at Geithner last week in his ‘Up Up With America’ speech! There he was ‘begging’.We need $1.9 trillion come Oct, to keep up with this air dropping of money/ and Perpetual War. Least we forget – ‘the borrower is slave to the lender’.
We might be surprised at the ‘collateral’ agreed upon in gilded boardrooms? Has anybody noticed (past decade +) of the millions of acres (all states) set aside (protected preserves – etc)/ diminished logging – roadless forests – Clinton (without telling UTAH Gov- Politicians) setting aside the TONS and TONS of low sulfur coal on 1.7 million acres! Timber – water – gold – gas – oil – minerals (now there’s some collateral for fiat paper).
It’s something to think about – read the Art of War/ Sun Tzu (online) – The Chinese recognized the GREED of our industrialists/ politicians decades ago/ They’d steal pennies off a dead man’s eyes. Chinese warfare protects the spoils of war intact! See Global Landgrab. The ‘herd’ will be relegated to small oasis’ of drudge work/ cracker box housing/ POD cars. NOT for the HOGS – Only they, will be able to afford the gas guzzlers/ as long as they play the GAME. Just my creative incompetent vision, of the Future American Dream (minus multitudes with health care definition – Survival of the Richest).
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Fabius Maximus replies: Always entertaining to read the cartoons. Evil masterminds silently re-shaping our world! What comforting simplicity.