1000 Days: Brilliant But No Management Skills

Our current President, Barack Obama is a brilliant man. Personally I would rank him as one of the smartest Presidents we have had since Richard Nixon and in the same breath with Thomas Jefferson, Andrew Jackson and Woodrow Wilson. But as history has shown us, to be a brilliant President does not necessarily translate into being and effective or efficient one. Yes Obama is brilliant, but just using the example of his efforts to gain traction with our current economic conundrum, it is obvious he lacks the management skills required to astutely address this nation’s economic woes.

Now I am no Obama cognoscenti nor is this to state that he cannot manage, sure he can however much remains to be said of management skills regarding economics. Sure he is a competent jurist and astute in constitutional law, but one can simply examine how he works with his economic team to objectively examine his skill set in terms of management ergo concluding something is lacking. For the record before I proceed, I want to say I stated before and now that Tim Geithner was the wrong man for the job of Treasury secretary and I still stand by this. First I still maintain distrust for former Republicans that turn democrat in particular if they once worked for Kissinger and Associates. Second he is and foremost a banker and will always be as opposed to those of us on main street. I also had a problem when Geithner was living with Daniel Zelikow, as a top JP Morgan Chase executive, while he was overseeing the bailout of several huge Wall Street banks, including JPMorgan, which received $25 billion in federal rescue funds from the TARP program.

I can use the dysfunction of Obama's retinue of economic advisors to demonstrate why I have this opinion and come to the aforementioned conclusion. To start off with, Larry Summers (former Director of National Economic Council), Paul Volcker (former Federal Reserve Chairman), Christina Romer (former Economic Advisor), Elizabeth Warren (former Special Advisor to the Treasury Secretary), Peter Orszag (former Budget Director), and Tim Geithner (Secretary of the Treasury) alone provide me with more than enough substance to make this argument. Just looking at documented occurrences covering the Volcker rule, issues regarding Citibank, the bailout and the first stimulus, gives one an additional layer for discussion.

With respect to Larry Summers, it could be implied that the reason he resigned as director of the National Economic Council was his incessant economic blunders and what some could assert criminal actions. As an economist at Harvard and at the World Bank, Summers argued for privatization and deregulation in several areas, including finance. Prior to this under Clinton, he Summers oversaw passage of both the Gramm-Leach-Bliley Act, which repealed Glass-Steagall and Commodity Futures Modernization Act (which banned all regulation of derivatives, including exempting them from state antigambling laws) as well as permitted the previously illegal merger that created Citigroup. Not to mention, Summers, in concert with Greenspan, and Rubin and dismissed all warnings regarding the impending economic turmoil that we currently experience.

It was a major mistake to place Summers in an advisory role as a man who one did not perceive America’s economic crisis as a serious threat and two, as a man that developed many of the rules in which began this crisis.But this was more the fault of Obama obviously not having studied his past thoroughly and accepting on face value recommendations from his fat cat Wall Street donors.

In concert with Geithner, Summers cost us regular taxpaying citizens up to a trillion dollars or more. How because Obama puts on a front in front of the regular citizen hammering out loud at the banking industry and its faults, yet employs the very same men who rigged this game on behalf of the banking industry. Thus it is hard to say you are hard on banks and want them to get their acts together when behind closed doors you give them everything they ask for and more. Even with respect to Elizabeth Warren, the woman Obama wanted to head his Consumer Protection Agency, Geithner worked against the President wishes, for he insured the Banking industry and Wall Street she would not be approved for nomination, against the wishes of the President.

For example, the Obama administration’s $500 billion plus proposal was only beneficial to the banks and big dollar investors at the expense of the US tax payer. Why? Because we gave money to bailout make believe a false alarm problem contrived by bankers singularly. If one consider a toxic asset held by Citibank with a face value of $1 million, but with zero probability of any payout and therefore with a zero market value, most investors would not purchase such an asset. However, if Citibank itself sets up a Citibank Public-Private Investment Fund (under the Geithner-Summers plan), this allowed the bank to bid the full face value of $1 million for the worthless asset because it can borrow $850K from the FDIC, and get $75K from the Treasury (BAILOUT) to make the purchase - meaning the bank will only have to come $75K out of pocket. This means the bank (Citibank in this instance) would get $1 million for the worthless asset, while the fund in its name ends up with a pile of worthless assets against $850K in debt to the FDIC – allowing the fund to declare bankruptcy and make an easy $1 million. This is the best hustle since buying Newports in the South and selling up North.

I know I said I would present a discussion on the Volcker rule, but I do not want to bore you any further. In summary, regardless of being a President, Mayor, or Governor, Obama does not seem to have or display the management skills required to understand the creative use or utility of power at his hands. Unlike Maynard Jackson, Coleman Young, Richard Nixon, Willie Brown or even a Hank Parker, Obama appears to lack in terms of economic prowess and maybe even social acumen, the apperception that he is in a distinctive place in which the suitable exercising of influence can gather immense efficacy. Unlike the other African Americans mentioned above, although not serving as the President, Obama, has not shown he knows how to use power creatively and find the balance to take chances to correct existing inequities regardless of the political risk.

Like I said Obama is smart, but his management skills lack something: what I cannot say. The turnaround of the members of his economic top advisors suggest this alone. It is one thing to have high turnover, but if any other business or organization showed similar levels of turnover, they would go out of business or become inoperable. Moreover, it is clear that no other parts of his top advisors in other areas (state department, or Justice for example) have displayed similar high rates of attrition. No wonder the economy is in shambles.

I agree the prior presidents from Reagan to Bush 43 got us in this mess, but I also acknowledge that trying to suppurate consensus is not the same as making a decision. Selecting the wrong people (smart folks who do not get along or see eye to eye) is not helpful either and doesn’t equals being able to make a decision. Obama may be too smart for his own good, thinking that coming to a consensus is more important than making a decision. Sometimes a president or a governor or mayor must manage situations accordingly and decide on one policy over another. Can Obama do this has yet to be determined pertaining to his economic policy.