The recent flap involving the White House chief of staff is another sign that President Obama needs a Paul Volcker of the bipartisan world – - someone whose stature will command instant respect, who can act as a trusted counselor to the President. It may be one of his last chances to avoid an even more costly episode of unintended acceleration into political disaster.
There is a universal law of organizations, especially political organizations, which some of us who have counseled them over the years have come to observe. When the trusted advisor begins to attract the kind of press that puts the boss in a bad light, someone has a problem. And it’s usually not the boss –unless he lets it. The latest in a growing list of issues involving White House chief of staff Rahm Emanuel came to light in a column by Washington Post political reporter Dana Milbank, who made the point that “Obama’s first year fell apart in large part because he didn’t follow his chief of staff’s advice on crucial matters.”
Since it is Mr. Emanuel who was supposed to be giving the advice, not many besides he would know whether it was taken or not. In any event, this is not something that is going to assist a White House that is more and more looking like a victim of unintended acceleration into disaster, along with a Democratic Party that seems unable to steer away from calamity. As both the real and symbolic head of the Democratic Party, Mr. Obama needs to think about the picture that is emerging: The Senate loss in Massachusetts. The Governor’s scandal in Albany. The demise of Ways and Means chairman Charles Rangel (D-15th NY). The forced resignation of first-term representative Eric Massa (D-29th NY). A slow motion train wreck involving health care reform also features prominently on the list. Cap and trade seems almost buried and gone. The President’s approval ratings have plunged. The popularity of his party is foretelling of a November blowout. Apart from spending trillions in bailout packages to deal with problems that were not of Mr. Obama’s making, there is pitifully little to show on the domestic side for the first year of his term. On the foreign file, certain presidential trips, like the one to China, seem not to have been worth the cost of the fuel. Of course, not every problem can be laid at the door of the Oval Office. But issues, especially the ones that deal with tricky concepts of ethics and competency like those noted above, can quickly morph in the minds of voters, leaving the occupant of the White House often tarred with the blame. This is especially true during a time of increasing anti-incumbency attitudes and mounting populist sentiment.
As White House chief of staff, a post which many contend is something akin to the role of an unelected prime minister, Mr. Emanuel is not exactly a remote bystander in all of this. Our own views on the subject of his performance and probable early exit were set out late last year. One gets the impression that the growing litany of failures and setbacks is prompting some rewriting of history or at least an unbecoming distancing from the decisions themselves. The fact remains that no chief of staff in any administration worthy of respect would be caught with these kinds of comments connected to him. He has not denied the thrust of Mr. Milbank’s column. It’s another red flag that should not be ignored by a president who has already missed some important ones over the past year.
A positive step for Mr. Obama at this point would be to re-think the merits of the Chicago school he brought with him into the White House. When other presidents have been faced with a loss of momentum, they have called upon respected senior adults to help with turning things around. David Gergen comes to mind in that role for President Clinton. Howard Baker was brought in to bring direction to the Reagan White House after the messy arms-for-hostages debacle. Mr. Obama could use his own version of such a trusted advisor in the West Wing now.
What is needed is a Paul Volcker of the bipartisan political world — someone whose stature will command instant respect inside and outside the White House. The purpose would not be to replace Mr. Emanuel, but it would be the kind of person who could take over that function if it became necessary. With a little luck, he or she even might have developed an ability to restrain their predilection for profanities, bone-headed comments and flights of ego, all of which are becoming too closely tied to the staff of the Obama White House.
Coming into office, Mr. Obama wisely made much of his desire not to become tied to pre-scripted viewpoints or inside-the-beltway thinking. He understood that advice from outside was an important tool for testing the accuracy of the political compass and maintaining a healthy perspective. More of that thinking, both from Mr. Obama and from those who advise him, is needed now if an even more costly episode of unintended acceleration into political disaster is to be avoided.
The President has plenty of challenges and problems hitting him from outside. He does not need them coming from the office next door.
in Barack Obama, Democracy, Hot Issues, Turbo Populism
The Olympic Winter Games in Vancouver are another chapter in the unique history that Canada is writing on the world stage — sometimes in bold letters, sometimes in subtle poetic cadence.
The world’s top athletes pushed and soared, twisted and glided for 17 days and gave the world a spectacular performance. But in the end, it was Canada’s team that set the record, claiming more gold medals than in any Winter Olympic Games in history. The host country pulled in 14 first place medals, compared with 10 for Germany and 9 for the United States. To top it off, there was the Canada – U.S. final that saw two evenly matched emblematic titans of hockey go into sudden death with Canada claiming the gold there, too. Joannie Rochette, the figure skater from Quebec, won the bronze and the hearts of millions everywhere for her amazing grace in the face of such a sorrowful loss. She became the world’s adopted symbol of what the Olympic spirit means in terms of dedication and commitment. The opening and closing ceremonies showcased unsurpassed talent that revealed to the world the potential of a land blessed with natural beauty and endowed with an energetic and creative people. And they came from every part of the globe to make Canada their home.
All this was a fitting and long overdue reminder to those who may have forgotten that Canada can compete with anyone and win. Canada will never shine in the swagger competition. Its voice is sometimes understated in either of its official languages. Its institutions of democracy sometimes seem a little tepid compared with those of the U.S., and way too much power is concentrated in the hands of its prime minister. One does not get many Barack Obamas rising in Canada’s political system. Nor would a Sarah Palin ever get beyond a small town council chamber. But ask Canadians to build a railway through a mountain and span a continent with it, or charge them with taking a hill called Vimy Ridge in the battle torn fields of First World War France; tell them you want to create a health care system that is universal and serves all citizens equally, or enlist them in a war against terror in Afghanistan – and you will see an uncompromising and unparalleled spirit that gets the job done like no one else. One can never presume to know with precise certitude on what side of a struggle Providence sits. But when you have a Canadian on your side, there’s never any doubt. And success is always a lot closer because of it.
The Games got off to a shaky start, but, overall, their organization was a masterful display of management at its best. Canada’s Olympic committee never lost sight — as many organizations often do — of its central mission. In this case, that was the competition of the players and teams and the ease by which audiences could partake in the excitement. Well done.
The Olympic Winter Games in Vancouver are another chapter in the unique history that Canada is writing on the world stage — sometimes in bold letters, sometimes in subtle poetic cadence. It speaks a language of tolerance, understanding, respect for the individual and, above all, of how precious the gift of freedom is to be able to compete, excel, and, if not to prevail, at least to leave a better mark with a head held high.
That’s a gold medal performance that is Canada’s gift to the world.
in Canada, Hot Issues
The settlement was not crafted to act as a deterrent to future wrongdoing or to give the investing public confidence that the SEC is looking out for their interests in this post-Madoff era.
U.S. District Court Judge Jed S. Rakoff had finally approved the settlement between the Securities and Exchange Commission and Bank of America. Our concerns seemed at least to have made an appearance in the courtroom, though they clearly did not carry the day.
As we set out here before the judgment, our greatest misgiving in the proposed settlement was the inherent unfairness surrounding the $150 million penalty, which effectively involved the transfer, without their consent, of money from one shareholder pocket to another. The main players in the abuse, which included key officers and directors, got a pass on making any payment proportionate to their responsibility. To us, the settlement could easily have been concocted by Groucho Marx. It was not crafted to act as a deterrent to future wrongdoing or to give the investing public confidence that the SEC is actually looking out for their interests in this post-Madoff era.
Judge Rakoff correctly focused on this shortcoming in his combined opinion and order:
An even more fundamental problem, however, is that a fine assessed against the Bank, taken by itself, penalizes the shareholders for what was, in effect if not in intent, a fraud by management on the shareholders.
Unfortunately, the specter of judicial deference to tribunals like the SEC was also looking over his shoulder and he was unable to do more than register his chagrin. That does not do a lot for investors who were victimized by the shell game Bank of America engaged in, but it may serve as further evidence that the SEC needs to seriously rethink what precisely it is seeking in such settlements. Too often, they seem cleverly designed to create the illusion that justice is being served, rather than fostering policies that promote investor confidence in the capital markets and stand the test of garden-variety common sense on Main Street.
Judge Rakoff gave his verdict on that score, calling the settlement “half-baked justice, at best.” We see it more like a pie in the face of shareholders, despite the efforts of a plain-speaking judge to do his best to prevent it.
in $700 Billion Bailout, Bank of America, Hot Issues, Panic on Wall Street/Outrage on Main Street, SEC, Securities Regulation, Wall Street and Main Street
