Saturday, November 29, 2008

Indian attacks in Context

For those looking to really get a glance at the root causes behind the recent Mumbai attacks, and previous incidents, I would suggest this op-ed from the Globe and Mail.

It does an excellent job of putting the attacks in the broader context of Hindu-Muslim tensions - with dual flashpoints in Hindu nationalist extremism and Muslim instigators in Kashmir. However, it also adds the extra step reminding people that this is a pluralist, mostly peaceful democracy. Indeed, the pluralism is such that it is mind-boggling to most Americans.

One excellent quote, which provides the important context to keep in mind amidst the sensationalism of the media:

From this, you may believe that India has been overtaken by sectarian divisions and religious polarization. That also would be wrong.

This is, after all, a country whose people, 80 per cent of whom are Hindu, have overwhelmingly elected a government with a Prime Minister who is Sikh, a President who is Muslim and a governing party led by a Roman Catholic woman.

Most Hindus have no interest in the politics of religious nationalism. And most of India's 150 million Muslims have nothing to do with Islamic politics – they're the Muslims who rejected Pakistan, an Islamic state, during the Partition of 1947.

India has the honor of being, by far, the world's largest democracy - and has been a stable one for sixty years. This is not a country on the verge of collapse or instability from terrorist attacks. Indeed, relative to some of the disruptions from mass protests India has seen, this attack is a minor "flash in the pan." Small comfort to the victims, but true nonetheless. No government, no matter how stable and prosperous, can prevent all misfortune. India's stability, despite the persistent poverty of millions, is a testament to how (broadly) tolerant and accustomed to plurality its citizens are. Indeed, the best step we can take in preventing instability is to is to remove the poverty itself. After all, it is poverty that often breeds a bitter mindset and enables people to look for someone to blame.

Thus, I will end with another quote, this time from Suketu Mehta's recent op-ed in the NY Times:

But the best answer to the terrorists is to dream bigger, make even more money, and visit Mumbai more than ever. Dream of making a good home for all Mumbaikars, not just the denizens of $500-a-night hotel rooms. Dream not just of Bollywood stars like Aishwarya Rai or Shah Rukh Khan, but of clean running water, humane mass transit, better toilets, a responsive government. Make a killing not in God’s name but in the stock market, and then turn up the forbidden music and dance; work hard and party harder.

Friday, November 28, 2008

Good Op-eds on Economic Policy & My Take

There have been quite a few excellent op-eds on economic policy over the past few days, due in large part to Obama announcing his economic team.

Paul Krugman on financial crises and the need for regulation: Lest We Forget

David Brooks on forcing stimulus to have a long-term strategy: Stimulus for Skeptics

Dean Baker on the selection of the current economic team: Geithner at Treasury: Can He Learn?

For a bit more innuendo on why this economic team might be suspect, see this article in the Washington Post: Familiar Trio at Heart of Citi Bailout

My Take:
On the one hand, I am somewhat heartened to see that Obama seems to have something of a long-term strategy attached to stimulus - green technology, infrastructure, and patching the holes in the safety net. I will note one caveat there - he has also mentioned "aid to local and state governments" but has not mentioned what the aid would be used for. Might I suggest local public transit initiatives as an excellent option? Connected with a real rail infrastrucure (at least in California and East of the Missisippi), a good network of local public transit would do a lot to solving energy problems and building integrated markets. There are still a number of major cities that lack a real metro system, for instance (Philidelphia is but one example).

On the other hand, I am worried that Obama has been so cautious in his selection of his economic policy team. I expected to see a few old hands in top policy positions - particularly Geithner. But I was also hoping to see Obama do a little reaching out to the left - the source of his core support. In fact, his economic team is arguable more conservative than Bill Clinton's - after all, Clinton had Joeseph Stiglitz has his chairman of the Council of Economic Advisors. Christina Roemer is a solid choice, giver her expertise on the Depression, but having all of the other top positions held by centrist figures (Summers, Voelcker, Geithner, and Goolsbee) makes one wonder exactly how much debate there will be on economic policy.

Furthermore, all of these gentlemen (excepting Goolsbee), have had a hand in serious policy blunders. Summers is well-known for his part in the deregulation leading to this crisis - he was Treasury Secretary when the bank holding provisions of Glass-Steagall were repealed, and when the SEC avoided regulating credit default swaps (at the behest of Hank Paulson when he was at Goldman Sachs, among others). Voelcker spearheaded the end of stagflation, but he did so by strangling the US economy and raising interest rates to ridiculous levels. In doing so, he also sparked the debt crisis in the developing world, known as the "Lost Decade" in Latin America.

Geithner, on the other hand, was a member of the team that ensured IMF austerity conditions would be attached to loans in the 1997-8 Asian crisis. In essence, he forced countries facing an outflow of investment capital to spend less on their economies and to raise their interest rates... and these were countries that had balanced their budgets for years (unlike the US). These policies are known as "pro-cyclical" in economics jargon, and they have the effect of exacerbating a pre-existing crisis. In fact, the country that recovered most quickly from the crisis was Malaysia, who ignored IMF advice and imposed controls on capital flight, cut interest rates, and increased spending. This is exactly the opposite of what the US is doing now, and the exact opposite of what economists recommend should be done in a crisis.

Whether these gentlemen have learned from the past twenty years of supposed "consensus" that led to this fiasco remains to be seen. Until I see proof that they have, however, I worry that any response to the current crisis will be luke-warm - too small and too short-term. That was the mistake FDR made in the Depression, and if we learn from history, we should not make the same mistake again.

Tuesday, November 25, 2008

Two worries about Obama

Given the amount that we have heard about "change" coming to Washington in the Obama administration, let me mention that for all my support for some of the President-Elect's new policies (e.g. renewable energy, infrastructure spending, and health care), and guarded optimism about others (e.g. higher education finance reform), I still have worries about his willingness to tackle the biggest issues in national politics - the two "complexes" that constrain policy the most. They are (1) the "military-industrial complex" (term coined by President Eisenhower) and (2) the "Wall Street-Treasury complex" (term coined by centrist Columbia Economist Jagdish Bhagwati).

Military-Industrial Complex:

To really understand this issue, let me refer you to three sources. The first is a recent article in The Nation that is an excellent primer on the problem. This article identifies two central concerns and challenges related to our military spending.

The first is simple and straightforward: we should not be spending money on weapons systems adapted to an outmoded geopolitical situation - namely the Cold War. Big culprits include the F-22 Raptor, the Ballistic Missle Defense System, and arguably most of the US nuclear arsenal. An excellent line-by-line report identifying key programs to be targeted for reduction was done by Foreign Policy in Focus, and is entitled "A Unified Security Budget for the United States, FY2009."

The second issue is more fundamental and concerns the position of the US in the world. We have, since WWII, become accustomed to using our military to project influence into the world. Part, though not all, of this is related to energy politics (one of the many reasons for renewable energy). Overall, we have over 700 bases and outposts stationed in foreign countries. Perhaps the most comprehensive coverage of this issue has been done by esteemed political scientist Chalmers Johnson, emeritus at UC San Diego. For a list of some of his fairly regular op-eds, see this page at AlterNet. More importantly, see the trilogy he wrote on US intelligence, military, and the potential decline of the American Republic - including parallels to Rome and Britain. The books can be found on Amazon, and are titled: Blowback, The Sorrows of Empire, and Nemesis.

As the article in The Nation mentions, Obama has signaled that he wants a shift out of Iraq and into Afghanistan, but he hasn't signaled that he is willing to take on the Pentagon's ever increasing budget requests or its unwillingness to phase out old programs - to say nothing of whether we should take a fundamental look at where we have bases and why. I voted for Obama because I think he understands that we're looking at a multipolar world. Unfortunately, I don't have any indication that he's willing to take on the established old guard at the Pentagon. Toning down our militarism is the central component to finding a new place in the world. We need to remove our "big brother" and "world policeman" mentality and return to a simple concern with our own national security. Besides, the only thing that will force more military responsibility on other countries is if we don't have the resources to do it all for them.

The Wall Street-Treasury Complex:

My problem here is much simpler - Obama's economic team is populated by old-guard economists, many of whom contributed to the rise of the "Washington Consensus" and the deregulation of financial markets that got us into this mess. When your house falls down, do you hire the same contractor who built it in the first place? I take a little hope that the Treasury Secretary is Tim Geithner, and having a respected hand there is important, but I would be much happier if the economic policy posts weren't completely filled with Robert Rubin's protégés. Rather than complaining about it too much myself, let me suggest two good sources. The first is this article from the NYTimes, and the second is this op-ed by Dean Baker at CEPR.

In short, it remains to be seen if change is really coming to Washington. Old habits die hard, and people are often loathe to unlearn ideas they formed over decades-long careers. Who will Obama listen to, and how will he synthesize their opinions? Is there enough diversity to ensure a proper balance? All of his advisors are bright, well-educated, and experienced - but it remains to be seen if they are stuck in their ways.

Sunday, November 23, 2008

Update: Cabinet announcements

Here's the most recent list of cabinet announcements:

Treasury: Timothy Geithner (Current President of the NY Fed, helped craft bailout plan)

Chief of White House National Economic Council: Larry Summers (Treasury secretary under Clinton)

Chair of Council of Economic Advisers: Christina Romer (UC Berkeley Economist, specialist in Great Depression)

Chairman of Economic Recovery Council:
Paul Voelcker (Former Fed Chairman who hiked rates in 1980s to get us out of Stagflation)

Staff Chief of Economic Recovery Council: Austan Goolsbee (U of Chicago economist, Senior Economist at Progressive Policy Institute)

Commerce: Bill Richardson (Governor of New Mexico, was a presidential primary candidate)

Foreign Policy:
Hillary Clinton (Senator from NY, primary candidate)

Defense: Robert Gates (at least as a transition for 1-2 years)

Homeland Security: Janet Napolitano (Governor of Arizona)

National Security Adviser: General James L. Jones (Retired Feb 2007 - former Supreme Allied Commander, Europe; Commander of the United States European Command; and Commandant of the Marine Corps)

Social Policy:
Health and Human Services: Tom Daschle (Former Senate Democrat Leader, published a book on Health Care recently, strong supporter of health care reform).

Director of Domestic Policy Council: Melody Barnes (Executive VP, Center for American Progress)

Director of Office of Management and Budget: Peter Orszag (Director of Congressional Budget Office; has focused particularly on health care)

Attorney General:
Eric Holder (Deputy AG under Clinton)

Thursday, November 20, 2008

Cabinet so far

Cabinet announcements so far....

Attorney General: Eric Holder (Deputy AG under Clinton and career prosecutor, wants to restore independence to AG office)

Health and Human Services:
Tom Daschle (Former Senate Democrat Leader, published a book on Health Care recently, strong supporter of health care reform).

Homeland Security:
Janet Napolitano (Governor of Arizona, tough on illegal immigration)

Edit: National Security Adviser: Unconfirmed talk that it could be General James L. Jones (Retired Feb 2007 - former Supreme Allied Commander, Europe; Commander of the United States European Command; and Commandant of the Marine Corps)

Edit: Secretary of State: Hillary Clinton has apparently made up her mind to accept the post, and vetting is finished and OK (see Bloomberg article). Sources say she is set to be nominated after Thanksgiving.

Friday, November 14, 2008

Shadow Summit details

If anyone is looking for more specifics on what events are being held when and where at the Shadow Summit - here is a link:

Thursday, November 13, 2008

Shadow Summit to G20 this weekend!

November 14-16 2008
Forum will be held November 15th at Luther Place, 1226 Vermont Ave NW
People's Summit Against the G20

While George W. Bush hosts a meeting to promote flawed top-down ideology, IPS and friends invite you to a summit for "the rest of us."

We know the global financial crisis cannot be fixed by those who created it. Join us this weekend for the People's Summit to demand new ideas, people over profit, and democratic control over resources.Nine events are planned for the summit this weekend. For the full schedule of events, please visit Global Justice Action. The weekend's activities will culminate in a People's Forum on Saturday, November 15 and will include:

* An introduction to the financial crisis and its foundation in global capitalism
* Breakout groups, with experts, to further explore energy, the housing crisis, and other factors that contributed to the financial crisis
* A fishbowl discussion on alternatives to capitalism, exploring local, national and global models
* A movement discussion and networking opportunities

The closing panel on international perspectives will feature:

* Martin Khor, Director of the Third World Network, and board member of the International Forum on Globalization
* Njoki Njehu, long-time Director of the Fifty Years is Enough Network
* Lidy Nacpil, Filipina activist and long-time leader of Jubilee South
* Moderator: John Cavanagh, Director, Institute for Policy Studies

Read the Global Call to learn more about the People's Forum and add your voice to those calling for a new, democratized economic system.

Sponsors: Bank Information Center, Casa de Maryland, Global Justice Action, International Forum on Globalization, Institute for Policy Studies, Jobs with Justice, Students for a Democratic Society, US Action, and the Washington Peace Center

Wednesday, November 12, 2008

Hank Paulson's Bailout Shift...

Apparently, the US Department of Treasury may be coming gradually to its senses. Earlier today, Hank Paulson announced that the focus of the bailout plan would shift, focusing more on direct capital infusions from the government (in association with private investors) rather than purchasing of toxic assets. Rather than bailing out the bankers, as we have all feared, this welcome move is intended to bolster liquidity in credit markets and insure reliable access to consumer credit, while granting the government direct authority to ensure that banks do their number one job: keep lending. For more on this change, see this article in the Financial Times and this one in the New York Times.

On the other hand, Paulson has maintained that the focus on the bailout should be targeted at the financial sector, rather than giving aid to Detroit auto manufacturers. On the face of things, this might make sense, until you consider the fact that car manufacturers are major financial institutions in their own right. After all, every company-owned dealership extends credit to consumers to facilitate buying cars, and all those loans are kept on the books. It is more than a bit naive to assume that the auto industry, which employs a lot of workers in typically hard-hit "Middle America" (Michigan, Indiana, Ohio especially), can weather a credit crisis when the goods it sells are so dependent on access to consumer credit. Unfortunately, in typically narrow-minded fashion, still-President-for-now Bush has made his approval of any economic stimulus (including for automakers) contingent on Congress dropping opposition to the Colombia Free Trade Deal.

None of this is to argue that cars are a good thing, or that we should continue producing cars. However, even those long-sighted auto manufacturers like Toyota and Honda, with their hybrid marketing and fuel-efficient lines, have taken a sales hit over the past year or so. In the medium-term we need to get off of foreign oil, but real public transport (both local and interstate) takes time to build, and until then we need to keep our auto workers employed. The collapse of any of the Big Three would have a devastating impact on what manufacturing economy this country has left. The private car isn't going away anytime soon, and these companies have been hard-hit by an external shock. Like it or not, they need government assistance to retool (and even to prevent job cuts), and frankly enough of the burden to justify using government funds lies on the American taxpayers' historic aversion to rail and public transit in favor of cars and jets.

As I indicated in my letter to President-Elect Obama, the key here is to capture synergies. We need to provide funds to automakers, but those funds need to be contingent upon a significant retooling of their automobile lines - away from SUVs and towards fuel-efficient city vehicles, hybrids, plug-in hybrids, electric cars (like those being developed by Tesla Motors), and hydrogen fuel cells (Note: I do not include ethanol because it has devastating impact on food prices, particularly in the developing world). Then, when the President-Elect takes office, we can hopefully turn our attention to public transit infrastructure (light rail and high-speed rail, especially), green energy generation, and the supporting infrastructure for alternative fuels (especially hydrogen and public plugs for plug-ins/electrics).

Income inequality...

Throughout the election, Barack Obama was attacked as a "redistributor" and a "socialist" by the right. The implication is that a downward distribution of income from the wealthy to the middle classes is somehow a bad thing, and that all of the benefits of economic growth are equally shared. Those who perpetrate these claims are either (a) wealthy, (b) cronies of the wealthy or (c) bamboozled by rhetoric and lacking evidence or the skills to interpret the evidence.

As just one simple piece of evidence, from 1979-2004 the real (that is, adjusted for inflation), after-tax income of the top 1% of society rose by 176%. The top 20% of society saw an increase of 69%. The bottom 20% saw an increase of only 6%. No quintile below the top saw an increase of over 30%, and the pattern is distinctly regressive. Here is my source, and I would like to point out that the data used comes from the Congressional Budget Office.

So, either the wealthiest in our economy are suddenly much better entrprenuers than they were 30 years ago (given boom-bust cycles, I doubt it!) or they have benefited from a set of policies related to international trade and investment, as well as domestic welfare policies, that favor an upward redistribution of income at the expense of the lower and middle class. I might point out that Reagan was elected in 1980, and in the period mentioned there has been only one Democratic president, Bill Clinton. Even Clinton was hamstrung by a Republican Congress for much of his term, and was a pro-free trade, pre-free investment, financial deregulator and fiscal conservative.

Small wonder this election saw a mandate for change in Washington policies - indeed, its a wonder that Obama's victory was not a landslide. Sadly, this may be a testament to the pervasive and simplistic "free market" ideology long advocated by the right, and the manipulative anti-communist rhetoric employed to promote it. One wonders if John Maynard Keynes, the chief architect of the post-WWII international economic regulatory structure, would be labelled a socialist in today's politics! We need to move past such divisive ideology to get to the point where people understand (at least roughly) that economics is fundamentally about manipulating incentives to produce a beneficial outcome - and that the "free market" vs. "socialism" is a dangerous false dichotomy that hinders real progress in the USA.

Monday, November 10, 2008

Keynes, revisited...

In case people remain worried about the cost of economic stimulus + the bailout, and don't trust my economics, may I suggest an editorial by a Nobel Prize-winning economist? Paul Krugman's take on a stimulus package and the New Deal can be found here.

Saturday, November 8, 2008

Dear President-Elect Obama...

Dear President-elect Obama:

You've been elected, and with a broad mandate, but the devil is in the details. How will you deliver?

You ran on a platform advocating change and unity, bringing accountability to government, and rejuvenating a suffering middle and lower class. However, most of the concrete policies you specified in your campaign are rather moderate, aimed at targeted small interventions, and seem to lack a cohesive vision. In one sense, this is good, because it grants you flexibility to respond to changing circumstances. In another sense, however, it is worrying - particularly given the broad array of challenges facing you.

Perhaps the most important point is this: do not let the size of recent financial bailouts or the government deficit distract you from deeper goals. Please remember the wisdom of Sir John Maynard Keynes, the great British economist: target a deficit in times of trouble towards sustained employment and economic renewal, so that you can increase revenues and balance the budget in times of economic health. In crafting your economic stimulus package, you would do well to remember your commitment to the middle and lower class, to the most vulnerable in society. Furthermore, you should try to aim at finding positive synergies that allow you to harness the crisis stimulus for longer-term goals. This is particularly relevant in terms of environmental, social welfare, and infrastructural objectives.

To illustrate, consider the following example. Lagging infrastructure in the United States is most apparent in two areas: energy and transportation, particularly rail transport. At the same time, we are embroiled in two wars abroad, at least one of which (Iraq) is significantly tied to oil. These two categories of infrastructure represent an enormous opportunity to achieve multiple objectives and follow through on the message of change and pro-lower class growth that propelled you to the White House.

Investing in the construction of rail transport - particularly high speed passenger rail - would provide hundreds of thousands of jobs to an industry deeply hurt by the burst of the present asset bubble, while reducing our long-term dependence on foreign oil, reducing harmful greenhouse gas emissions, and reducing America's long-term dependence on wasteful automobile, jet, and truck transport. Along similar lines, the provision of federal subsidies to local and state governments promoting mass transit systems, would have a similar impact. Such measures might run into some opposition (particularly from oil and auto industries), but that type of opposition could easily be cast as relying on corporate self-interest rather than the public good.

A very similar case can be made for clean energy subsidies and construction, particularly smaller scale technologies with less potential harm which can be utilized in local settings, maximizing the safety and security of our energy infrastructure while minimizing the long-distance transport of oil and coal. Wind (particularly in the Midwest and Appalacians) and Solar (particularly in the southwest) both provide excellent alternatives, and should be supplemented with other locally applicable solutions - such as tidal power and geothermal. Other initiatives, such as clean coal and nuclear should be explored, but have a larger number of detrimental side effects - coal mining and radioactive waste both cause ecological issues if mismanaged. Once again, these initiatives provide jobs and have the potential to reduce american utility bills, to the benefit of the middle class. They may be opposed by the coal and oil lobbies, but these lobbies again have selfish corporate profits as their interest, not the public good or the long-term health of our economy.

Lastly, please remember your commitments to social welfare, health care, and education. Please remember that all commitments should be funded with a progressive tax structure aimed at minimizing inequality (while maintaining incentives to entrepreneurs) and minimizing speculation. Measures like a small tax on financial transactions, or a Tobin tax on currency transactions, have minimal impact on long-term investment and savings (or normal business operations), but a substantial impact on "casino capitalism." Furthermore, these progressive tax measures could be earmarked to pay for health care and unemployment insurance, both of which would achieve substantial demand-side fiscal stimulus in their own right.

Mr. President-Elect, you have set yourself lofty goals. However, you have also signaled a willingness to play political hardball. You have a Vice President who is a major figure in the Senate and wields enormous respect. You have a Chief of Staff who is a similarly high-ranking member of the House of Representatives, and is a close political ally. You have built a mass movement that can be mobilized to provide support for your initiatives, and have tremendous personal charisma to rally the people. Coupled with an appropriate political strategy that begins with decisive and successful immediate action - through a stimulus plan that captures the synergies between many of your goals - you could achieve long-lasting and visionary success for this country.

In short, Mr. President-Elect, you have tremendous potential. Please do not waste it.

Financial Crisis: Revisited

Hey folks, since I finally finished my series on the financial crisis, and since we now have a new administration - I thought I would re-post the links.

Financial Crisis Part I: The Antebellum - details the fairly immediate domestic historical causes of deregulation and the housing bubble. There is more that could be said here about the impact of international globalization, portfolio account liberalization, parallels with the East Asian crisis of 1997, and if the IMF has a role - but for now I'll leave those issues alone.

Financial Crisis Part II: The Conflagration - details the majority of the major banking collapses (I wrote this before Washington Mutual collapsed and merged with JP Morgan Chase). It also gives a sketch of the bailout and impact on national debt, trying to keep things in perspective. I think, in retrospect, that my critique was a bit conservative in this section, and the move towards actual equity shares in the banks is a good one, because it confers additional and more sustained oversight. One thing to keep in mind: the social role of the financial sector is not to make profits, it is to provide stability, transparency, and liquidity to producers and consumers alike - so that the economy continues to function. It needs to do this efficiently, but we need to remember that financial profits do not generally reflect actual productivity increases or the health of the real economy. In fact, when fueled by speculative investment, they typically prop up bubbles like the one we just saw. If there is any segment of the economy that should be stringently regulated, even to the point of quasi-nationalization, it is the banking sector (I do make this point in part III).

Financial Crisis Part III: A New Regulatory Framework - details my take, based partly on analysis from Dean Baker at CEPR (who, incidentally, is one of the few economists who has legitimately predicted all of this for years), on how we can input smart and targeted regulation to prevent the excesses of speculative activity, provide public oversight, and root the calculus of financial companies in long-term sustainable profits - rather than short-term bubble-burst activity.

So - for those who missed it the first time, or who are new readers, or only read part of it - there is my take on what we should do (roughly).

To come later - I will probably try and provide a framework for the Obama administration - how we should be focusing on changing or restructuring our society to be more dynamic, sustainable, and capable of providing legitimately equal opportunity for all.

Friday, November 7, 2008

Cabinet scuttlebutt

Here are a few more articles on potential cabinet members: CBS discusses most open posts, specifically on foreign policy
we have this article from the Hindustan Times, and Reuters reports that former Clinton Secretary of Treasury Robert Rubin has ruled out a return to the post.

I'm going to mention a few of my preferences here, though I won't guess on many, because a lot of this is behind-the-scenes chatter and hard to predict:

(1) Treasury - NOT Rubin or Larry Summers - this whole financial crisis run-up started under the Clinton administration, so returning to the people who were wrong is a bad idea. Also, Summers has a big mouth and a large ego, and got into trouble at both the World Bank and Harvard for them. Paul Voelcker, former Fed chairman, is a possibility, but he is too much of an anti-inflation-hawk for my tastes and bears the stigma of the 1980s debt crisis. He's also getting old. Tim Geithner, current chair of the NY Fed, is a solid possibility because he was involved in crafting the bailout and can hit the ground running. Warren Buffet is seen as an outside shot - I might like that idea because Buffet is big on business fundamentals and stability, and agaisnt the over-financialization of our economy that has happened in the past few years. He's not a banker, which some take as a minus, but I see as a solid plus - the Wall Street-Treasury complex needs to take some time off.

(2) State - Bill Richardson is my pick, and almost a prediction. I think he's been angling for the role since the primaries. Plus, with a resurgent Latin America starting to have a voice in international affairs, a Hispanic secretary of state can go a long ways in casting a friendlier face. Richardson campaigned hard amongst latinos and broke with the Clintons to endorse Obama, so Obama also owes him a favor. He's also an old hand as Ambassador to the UN and has negotiated with Kim Jong-Il. It is worth noting that whoever is in charge of State will probably butt heads with Joe Biden.

(3) Defense - Personal choices are to stay with Robert Gates or to bring Colin Powell back into the fold. Gates is one of the best/most moderate people in the Bush administration and has openly stated that Defense needs to yield to state; that the US needs to focus less on hard power and overextending resources and more on soft power as other countries become global players. Plus, he can hit the ground running. Colin Powell is one of the most respected people in the US, including internationally, and his credentials are peerless: Chairman of the Joint Chiefs and Secretary of State under both Democrat and Republican administrations. He also underastands that military intervention is a last resort, and is not afraid to speak his mind - but does so in a calm, balanced, quiet, and respectful manner. Whoever is in DoD needs to be able to bridge the aisle and bring consensus on an orderly withdrawal from Iraq.

(4) Energy - I like the gubernator for this one - Arnold Schwarzenegger is another moderate Republican, who has done a lot as governor of California. He's promoted alternative energy, and has also been a proponant of improving US rail infrastructure. One project approved on election day was the first leg of funding for a bullet train in CA connecting Sacramento to LA. High Speed rail should be our #1 priority for infrastructure - it provides jobs, reduces oil consumption, reduces carbon footprint, and can streamline air travel so that we don't need to fly within a 800-1000 mile radius. Another potential place for Arnold, following this, is Dept of Transportation. See this link for the rail project.

(5) Council of Economic Advisors - A few people who should be included and listened to: (a) Amartya Sen (Nobel Prize 1998 on Famines, at Harvard, also on the IMF Governance Reform panel), (b) Joeseph Stiglitz (Nobel Prize twice, at Columbia, known for alternatives to globalization, and understands Latin American cooperative movements), (c) Dani Rodrik (arguable the best development economist for understanding how institutions impact the economy, also at Harvard) - along the lines of Rodrik, other possibilities include Nancy Birdsall at the Carnegie Endowment or Arvind Subramanian at the Peterson Institute, (d) Paul Krugman (Nobel Prize for work on trade this year, might be a bit vitriolic at times, but also understands the need for careful governance of globalization), (e) Maybe Jeffery Sachs at Columbia or William Easterly at NYU - both are known and respected internationally, but they also hate each other, so they might be better as people to consult on a part-time basis.

One last comment is this - to bring real change, Obama needs to start listening closely to the alter-globalization movement, best represented by the International Forum on Globalization (IFG). Some of those organizations are listed on my sidebar.

Sunday, November 2, 2008

Thoughts on Staffers?

So, assuming no gigantic upsets and Obama wins the election, any thoughts on potential cabinet posts? Here's a list of the names being circulated in top Democrat circles: