James Pethokoukis

Politics and policy from inside Washington

Obama’s new chief economist, Alan Krueger

Aug 29, 2011 16:16 UTC

First, the 411 on Alan Krueger, new chairman of the White House Council of Economic Advisers, from Reuters:

U.S. President Barack Obama said on Monday he has chosen Princeton University labor economist Alan Krueger to become the top White House economist. Krueger would succeed Austan Goolsbee as chairman of the White House Council of Economic Advisers. The decision comes as Obama prepares to unveil a jobs package in a speech planned for shortly after the September 5 Labor Day holiday.

“As one of this country’s leading economists, Alan has been a key voice on a vast array of economic issues for more than two decades,” Obama said in a written statement. “Alan understands the difficult challenges our country faces, and I have confidence that he will help us meet those challenges as one of the leaders on my economic team.”

Krueger’s expertise in labor-market issues is in keeping with the administration’s efforts to underscore a focus on jobs. At Treasury, Krueger was assistant secretary for economic policy and chief economist. He is also a veteran of President Bill Clinton’s administration, serving as chief economist for the Department of Labor from August 1994 to August 1995. Krueger holds a Bachelor of Science degree in industrial and labor relations from Cornell University. He earned his PhD in economics at Harvard University. While at Princeton, Krueger was a regular contributor to the Economic Scene column in The New York Times. Krueger has written extensively on unemployment and the effects of education on the labor market.

Anyone still looking for a turn to the right from Obama will be mightily disappointed. Krueger is part of the center-left economic consensus that believes a) America is undertaxed, b) government must become permanently bigger as America ages, and c) climate change requires a vast new regulatory scheme to control carbon emissions. His big idea to boost the U.S. economy and bring the budget in balance is ginormous consumption tax on top of the current income tax system:

Why not pass a 5 percent consumption tax to take effect two years from now? … In the short run, the anticipation of a consumption tax would encourage households to spend money now, rather than after the tax is in place. Along with the rest of the economic recovery package, this would help jump-start spending in the economy and thereby increase production and employment. In the long run, a 5 percent consumption tax would raise approximately $500 billion a year, and fill a considerable hole in the budget outlook. In addition, a consumption tax would encourage more saving in the long run. Many economists consider a consumption tax an efficient way of raising tax revenue, especially in a global economy. The prospect of greater revenue flowing into federal coffers would probably help lower long-term interest rates because the government would need to borrow less down the road, and further bolster the economy.

Krueger, who was Tim Geithner’s economist over at Treasury, is probably best known for his 1990s study that showed raising the minimum wage in New Jersery didn’t increase unemployment among fast-food workers. But that study seems to have been debunked. This is just one example (among many):

We re-evaluate the evidence from Card and Krueger’s (1994) New Jersey-Pennsylvania minimum wage experiment, using new data based on actual payroll records from 230 Burger King, KFC, Wendy’s, and Roy Rogers restaurants in New Jersey and Pennsylvania. We compare results using these payroll data to those using CK’s data, which were collected by telephone surveys. We have two findings to report. First, the data collected by CK appear to indicate greater employment variation over the eight-month period between their surveys than do the payroll data.  …  Second, estimates of the employment effect of the New Jersey minimum wage increase from the payroll data lead to the opposite conclusion from that reached by CK. For comparable sets of restaurants, differences-in-differences estimates using CK’s data imply that the New Jersey minimum wage increase (of 18.8 percent) resulted in an employment increase of 17.6 percent relative to the Pennsylvania control group, an elasticity of 0.93. In contrast, estimates based on the payroll data suggest that the New Jersey minimum wage increase led to a 4.6 percent decrease in employment in New Jersey relative to the Pennsylvania control group.

But for good or ill, I don’t think Krueger’s ideas will have much impact on the Obama White House.  Krueger won’t even be sitting in the job when Obama rolls out his new jobs plan on Sept. Moreover, it’s the political shop running policy right now, not the propellerheads. And the reelection team believes little can be done to alter the economy’s path over the next 15 months. Any big stimulus plan, even assuming effectiveness, would open Obama to GOP charges of being a reckless spender. Better, they think, to instead make the case that Obama has the best ideas to improve the economy over the next four years, not Rick Perry or Mitt Romney. In short, the Obama reelection plan is the Obama jobs plan. Krueger’s job will be explain away the bad jobs and GDP numbers and tell American why the GOP is wrong.

COMMENT

James Pethokoukis

U’re a terrible debater.

U say nothing and interrupt everyone else to ensure that the cnbc viewers are left with nothing.

I want to hear what people have to say, and u totally ruin that on cnbc. It’s sickening that someone pays u to do what u do.

love all ways
-Mitch R. Corburn

Posted by empyrean | Report as abusive

Bill Daley to the White House? Business would love it

Jan 5, 2011 14:10 UTC

If President Barack Obama chooses JPMorgan executive William Daley as his next chief of staff he could at last build bridges with the disgruntled U.S. business community, both on Main Street and Wall Street. Daley’s pro-trade views are a big reason the buzz around his potential nomination is so loud. The pick would also bode well for reaching deals with Republicans on taxes and spending. A few observations (via my column for Reuters Breakingviews):

1. It might be a stretch to call Daley a potential “dream pick” for Corporate America — but not by much. He was President Bill Clinton’s point man on trade in 1993 and deserves much of the credit for steering the North American Free Trade Agreement through a hostile Congress. As president of SBC Communications from 2001 through 2004, his job was to schmooze top regulators and the Republican Congress. More recently, Daley said Obama — a fellow Chicagoan whom he knows well — made a mistake by focusing on healthcare reform rather than job creation. That’s a view shared by many pragmatic members of the president’s own party.

2. The Daley Scenario is more than just a bout of wishful thinking from CEOs still cranky about Obama’s accusatory tone and pro-regulatory policies during the past two years. And it’s more than just a White House trial balloon to gauge the intensity of liberal outrage over hiring a Wall Street banker for a key administration position. (The early result on that are already in: Liberals are most unhappy at the prospect.)  My sources confirm that Team Obama and Daley are having a serious conversation about the gig, though it’s hardly fait accompli. There’s even a chance Daley might instead replace Larry Summers as National Economic Council.

3. But Daley as chief of staff seems the more plausible outcome. It is certainly the more important job. When Rahm Emanuel held the position before leaving to run for Chicago mayor (replacing Daley’s brother), he was both White House gatekeeper and de facto chief economic policy adviser. Obama adviser Valerie Jarrett is the administration’s current liaison to business. But if Daley is the pick, it’s his phone number corporate bosses will dial if they need something from 1600 Pennsylvania Avenue.

4. The same would go for Republicans. Daley is a fixer, not a general for waging ideological war against the Republicans in the next two years of Obama’s term. If party leaders want to cut a sweeping budget deal with Obama, Daley’s probably the right guy to grease the skids and make it happen. Come to think of it, it’s hard to see why the White House hadn’t thought of bringing Daley in before now.

COMMENT

The Obama administration will continue its headlong dash to the right. What they don’t understand is that no matter how far to the right they run, the political right and the media will continue their shrieking about what a communist, socialist, marxist, business-hating, economy-destroying monster he is.

Obama would’ve been far better served simply pursuing his own agenda – even with healthcare “reform,” despite essentially passing the version Republicans promoted originally, he was still accused of “cramming it down the throat” of America.

Instead, Obama’s cowardice has him abandoning and alienating his base in a fruitless quest to garner the support of people who are totally committed to his destruction. It’s foolish.

I say this all from the perspective of a libertarian who didn’t even vote for the guy.

Posted by JackMack | Report as abusive

Bill Daley as Obama’s new chief of staff?

Jan 4, 2011 15:08 UTC

That is the buzz. But it is more than just buzz. My sources tell me that serious conversations are being had, though it is not a done deal. Certainly the business folks I have chatted with would be delighted. Forget about Valerie Jarret. When a top CEO had an issue, he or she would be calling Bill Daley from now on, not Jarrett. Daley would be “their guy.” (And I would also call Gene Sperling the frontrunner to replace Larry Summers.)  Here is the Reuters take:

Longtime Obama aide Pete Rouse is currently serving as interim chief of staff. He replaced Rahm Emanuel, who left the administration in October to enter the race for mayor of Chicago.

Many businesspeople had hoped Obama would fill Summers’ job as director of the National Economic Council with a chief executive. While Sperling has done consulting work for Goldman Sachs, his career has been heavily focused on public policy.

Daley served at Commerce during former President Bill Clinton’s administration.

Daley would bring a breadth of experience in business, not just in the financial sector. He serves on the board of Boeing Co. and has served in the past as director at Merck and Co. He is also a past president of SBC Communications.

J.P. Morgan spokesman Joe Evangelisti declined to comment.

COMMENT

Bill Daley? Never heard of him, but the fact that he has considerable private sector experience and also served in Bill Clinton’s cabinet is a) a good thing and b) yet more evidence that Mr. Clinton is gently pushing Mr. Obama to the centre.

The GOP had best be careful. They’ve been outwitted by Mr. Clinton before.

Posted by Gotthardbahn | Report as abusive

Replacing Larry Summers …

Nov 22, 2010 16:07 UTC

From the White House’s perspective, the ideal replacement for Larry Summers as chief economic brain would be a female chief executive who could reach out to Republicans and the business community without irking liberals. Buzz about the candidacy of Roger Altman, the founder of investment bank Evercore, shows how difficult it may be for President Barack Obama to land that dream candidate.

The only thing more challenging than filling that job spec might be finding another Summers. He’s a brilliant academic and former Treasury Secretary who handled emerging market crises in the 1990s. As director of Obama’s National Economic Council, he’s been less a dispassionate coordinator of policymaking than the president’s maximum economist during a time of extreme financial tumult.

But Obama doesn’t necessarily need a Summers sequel at the halfway point of his presidency. With Republicans flooding Capitol Hill, the final two years of his term likely won’t see many big policy initiatives. Frankly, Obama needs a political symbol that shows Corporate America’s leaders he views them as more than just background staging for photo ops.

Ideally, he’d find that figure outside of Wall Street, which many in his liberal base blame for the economic crisis. Also, given that the Treasury Secretary and chair of the Council of Economic Advisers are now both men, adding a high-profile female to the economic team might be preferable. And just in case the Republicans want to play ball, a reputation as a deficit hawk would be a great kicker.

Two potential choices, and former CEOs, Anne Mulcahy of Xerox and Ann Fudge of Young & Rubicam, either passed or were dropped from the initial shortlist. Fudge seemed a natural – not least because her work on Obama’s debt panel has impressed Republicans. Remaining short-listers have also major drawbacks. Former NEC chair Laura Tyson has no business experience other than serving on the board of Morgan Stanley. Jared Bernstein, the chief economic adviser to Vice President Biden, comes from a union-backed think tank. Moreover, many CEOs privately profess concern about the unglamorous nature of the staff job.

So, by comparison, Altman makes some sense. Although from Wall Street, he’s built a successful mid-sized firm, met a payroll, successfully created wealth and served in President Bill Clinton’s Treasury. He’s also expressed concern about Obama’s relationship with business, most recently in a Wall Street Journal op-ed that read like a NEC job application. Altman may offer one other plus: He’d probably take the gig.

Is Geithner the next to leave Obamaland?

Oct 21, 2010 13:39 UTC

The man behind the Volcker Rule and the bank tax will soon be leaving Washington. That’s right, Obama political adviser David Axelrod is headed back to Chicago. What, you thought I meant Treasury Secretary Timothy Geithner? As for Geithner, he will more than likely be at Treasury for the duration, though in some ways he has a better skillset for the National Economic Council. Here’s a bit from my recent Reuters Breakingviews columnette on Obama’s pal:

Treasury secretaries are typically former CEOs, prominent politicos or longtime presidential pals. A career technocrat, Geithner didn’t tick any of those boxes. Instead, he was part of the crisis-response troika, along with Ben Bernanke and Hank Paulson. Effectively, Geithner was hired to be a fixer.

Nearly two years in, it’s Mission More or Less Accomplished. The St. Louis Fed’s “financial stress index” — incorporating various interest rates, yield spreads and bond indices — is currently 0.48 after hitting a peak of 5.09 in October 2008. Even the pilloried bank bailout gets better with age. (It was certainly better than outright bank nationalization). Geithner deserves considerable credit for it, especially his push for “stress tests” to be included.

But a new set of skills may be required for the next two years. Obama soon will need help from his Treasury secretary advancing a new budget agenda after his ballyhooed deficit commission issues its report in December. The job also will require pushing Beijing to trade more freely while tamping down on protectionist sentiment at home, redoubling efforts on unemployment and finely honing a tax policy.

Geithner might not be the obvious candidate for most of this modified job description. Before he got to the Fed in 2003, his education and career had been more focused on international affairs than domestic issues. And Geithner could still present political liabilities given earlier personal tax missteps and his dicey relations with Congress.

But if not Geithner, who? Wall Street bosses are still radioactive, while recruiting Clinton administration veterans could look desperate. The scarcity of obvious replacements is highlighted by the permanent presence of media mogul and New York Mayor Michael Bloomberg’s name on the Beltway circuit, despite his repeated denials of interest in the job.

Most importantly, Geithner seems still to have the full confidence of his boss. That’s probably more than enough for him to keep his spot on the team.

Me: I think Geithner has it about right on China trade, and he certainly takes the budget deficit seriously. He is even sounding better on “King Dollar, as my friend Larry Kudlow puts it. It’s really no joke that he could have comfortably been a member of John McCain’s cabinet.  On tax policy, he and the rest of Team Obama have it totally wrong.  Raising the U.S. tax burden in the current system is anti-growth and thus terrible for the nation’s long-run solvency.

Rahm Emanuel leaves the White House

Oct 1, 2010 18:39 UTC

First a bit from my Reuters Breakingviews column on the departure of Rahm Emanuel:

On a West Wing organizational chart, the profane and pugilistic Emanuel was Obama’s tough-guy bouncer, controlling the flow of people and information into the Oval Office. He was — as a humorous name plate in his office read — the Secretary for Go [Expletive] Yourself. But Emanuel was much more. He was Obama’s economic consigliere, virtual shadow treasury secretary, and de facto prime minister.

Indeed, it would be impossible to write an accurate financial history of the past two years without acknowledging the critical role Emanuel played. While still an Illinois congressman and House leader during the autumn of 2008, Emanuel helped push the $700 billion bank bailout bill through a reluctant Congress.

Once in the Obama White House, Emanuel massaged and manipulated the wonkery of the Obama economics team into a politically workable form. When some advisers pushed hard for a $1.2 trillion stimulus in early 2009, Emanuel downsized it, knowing that his old mates in Congress would balk such a lush package

And it was “Rahmbo” to the rescue after the stock market tanked in response to Treasury Secretary Timothy Geithner’s February 2009 speech on the banking crisis. Obama ordered Emanuel to whip the understaffed Treasury team into fighting trim. And that was just fine with the banks. They considered Emanuel — who made millions in a previous guise as a managing director at Wasserstein Perella — a fellow traveler.

So Wall Street is sad to see him go. Republicans should be, too — at least those who desire fiscal reform. Emanuel was a big believer that politics is the “art of the possible.” Obama will be under plenty of pressure from his unhappy liberal base to appoint a successor who will be the guardian of traditional liberal principles. But that’s a recipe for gridlock. America needs a closer, not an ideologue, whispering in the president’s ear.

Addendum: I think Obama tries to get a deal on spending, eventually agrees to one-year extension on all the Bush tax cuts, and — as they say — “draws some contrast” with the GOP on GSE reform. I think Pete Rouse will be a facilitator of that. But it is also amazing how little clarity there is about next year because of the potentially sweeping nature of the November midterms.

Summers speculation roundup

Sep 22, 2010 13:03 UTC

Place your bets!

Reuters:

Following are economists that have been mentioned as potential replacements for Summers as director of the White House National Economic Council.

LAURA TYSON

A member of the President’s Economic Recovery Advisory Board, an outside panel of economic experts advising Obama. Tyson is a former top economic adviser to former President Bill Clinton. She is also a professor at the University of California, Berkeley’s Haas School of Business.

DIANA FARRELL

A deputy to Summers on the National Economic Council. She also sits on Obama’s Auto Task Force. From 2002 to 2009, Farrell was Director of the McKinsey Global Institute, the economics research arm of McKinsey & Company. Prior to joining McKinsey, she worked at Goldman Sachs as a financial analyst.

JASON FURMAN

He’s also a deputy to Summers. Furman served as Economic Policy Director of Obama’s presidential campaign. He served in the Clinton administration as a staff economist at the Council of Economic Advisers and later worked for the National Economic Council. In addition, he was a senior adviser to a top World Bank official.

ANN FUDGE

A member of the bipartisan deficit commission Obama formed early this year to tackle the deficit. Fudge was chairman and chief executive officer of Young & Rubicam Brands. She also held senior executive positions at General Mills and Kraft.

GARY GENSLER

Chairman of the Commodities Futures Trading Commission, Gensler is a former Treasury official and Goldman Sachs employee. He was also a senior adviser to former Senate Banking Committee Chairman Paul Sarbanes, on the Sarbanes-Oxley Act.

GENE SPERLING

Counselor to Treasury Secretary Timothy Geithner. Sperling headed the National Economic Council in the Clinton administration. He served as an economic policy adviser to the Clinton-Gore presidential campaign and was also an economic adviser to former New York Governor Mario Cuomo.

MARK ZANDI

Chief economist at Moody’s Analytics, Zandi was an economic adviser to John McCain’s presidential campaign. But he has also advised the White House and congressional Democrats and Republicans.

JEFFREY IMMELT

Chairman and CEO of General Electric since 2001. Immelt is also a member of The Business Council and is on the board of the New York Federal Reserve Bank.

RICHARD PARSONS

Chairman of Citigroup and a former chair and chief executive of Time Warner, Parsons was on the Obama transition team’s economic advisory board before being named Citigroup chairman. He also served on a task force under former President George W. Bush that examined Social Security changes.

ANNE MULCAHY

Former Xerox Corp. chief executive. She serves on the President’s Economic Advisory Board.

Bloomberg:

Among those whose names have been discussed is Anne Mulcahy, the former chief executive officer of Xerox Corp., two people familiar with administration discussions said. Other potential candidates include David Cote, CEO of Honeywell International Inc., and Richard Parsons, chairman of Citigroup Inc., according to one of the people. Cote is a member of Obama’s commission on cutting the federal deficit and, along with Parsons and Mulcahy, has been among the executives the president has called to the White House for consultations. The co-chairman of the deficit commission, former Clinton administration official Erskine Bowles, also has been mentioned as a possibility, a third person said.

Wall Street Journal:

Former Xerox Corp. chief executive Anne Mulcahy quickly emerged as a leading candidate to replace Mr. Summers, though White House officials caution that no decisions have been made yet. A senior administration official confirmed that Ms. Mulcahy had dinner in Washington Friday evening with senior presidential adviser Valerie Jarrett. She is highly thought of within the administration, the official said, where she serves on the President’s Economic Advisory Board. Other candidates include Deputy National Economic Council Director Diana Farrell, who came to the White House from McKinsey & Company, and Laura Tyson, an economist at the University of California, Berkeley, who served in the Clinton administration as chair of the Council of Economic Advisers.

Politico:

Potential Summers replacements reportedly being initially considered include Rebecca Blank, a Commerce Department official who oversees the Census Bureau and Bureau of Economic Analysis; Ursula Burns, chairwoman and CEO of the Xerox Corp.; Ann Mulcahy, the company’s former CEO; and veteran economist Laura Tyson, who held the NEC director’s post in the Clinton administration. Obama is also expected to give a close look to business executives, as well as women candidates currently serving on his Economic Recovery Advisory Board and the President’s Export Council. The president is also known to think highly of Vice President Joe Biden’s chief economist Jared Bernstein .

Washington Post:

As Obama gears up for the 2012 reelection campaign, administration officials need both a fresh face on the economy and someone who can craft a credible vision for creating jobs and restoring the nation’s economic vitality. Sources said the White House is considering whether to choose a candidate who could blunt criticism that the administration has been anti-business, such as a corporate chieftain or prominent investor. Administration officials are also eager to find a woman to fill a top economic role, since Romer’s departure left Obama with an all-male group of principals at his daily economic briefing.

More on Larry Summers leaving the White House

Sep 22, 2010 12:42 UTC

A few additional thoughts about Larry Summers leaving the White House and going back to Harvard:

1. His replacement as director of the National Economic Council will be an interesting tea leaf.  Obama’s recent replacements for WH budget chief,  Jack Lew, and head of his council of economic advisers, Austan Goolsbee, were steps toward the center. Another centrist (like Jason Furman) could hint at The Pivot, a POTUS effort to work with a congress next year that will likely be far more Republican. And a liberal pick (Jared Bernstein) though, could be a signal to Obama’s base that the president intends to double-down on Obamanomics 1.0.  Markets would like the former, not the latter.

2. On substance, the new NEC head might not be that big a deal. The position will likely revert to that of a coordinator from being the high-level policymaking job it was with Summers who was basically Obama’s maximum economist, at least in 2009.

3. I know that business is clamoring for a CEO to get the gig. And while I think it would be fantastic to get someone in the White House with significant private sector experience, I really want someone who is more pro-market more than pro-business. We need to get rid of corporate pork and take a more realistic approach to China’s anti-market trading position.

4. These are some of the names I was Tweeting (https://twitter.com/JimPethokoukis) yesterday afternoon (followed by odds from Paddy Power): Ann Fudge (5/2), Laura Tyson (11/4), Anne Mulcahy (6/1), Jason Furman (4/1), Mark Zandi (9/1), Diana Farrell (9/2),  Jeffrey Immelt (8/1), Gene Sperling (9/2), Richard Parsons (10/1), Gary Gensler (10/1).

COMMENT

The WH is too male dominated. Bring in some women economists and budget experts. Laura Tyson is well respected but she may not want to leave her attractive life in Berkeley CA. What about Susan Athey – the brilliant Clark medallist? What about Carmen Reinhart? Janet Yellin? Linda Bilmes? Caroline Hoxby? Esther Duflo? There are plenty of good candidates if you look hard enough.

Posted by kittylynn | Report as abusive

The departure of Larry Summers

Sep 22, 2010 11:09 UTC

So who is going to replace Larry Summers over at the White House? My Reuters colleagues list a number of options. I have come up with a number of my own over at Twitter. (The WH would love a female CEO as director of the National Economic Council, methinks.) Anyway, here is my Reuters Breakingviews column on the the impending Summers exit:

If deftly handled, the exit of brilliant-but-testy White House economic adviser Lawrence Summers could be addition by subtraction. Summers’ departure for Harvard University gives President Barack Obama an opportunity to fill a gaping hole in his administration’s skill set: private sector experience.

Businessmen, both big and small, would be thrilled to see the next director of the National Economic Council – a key role in the country’s economic leadership – drawn from their own ranks. Executives have repeatedly knocked Team Obama for overweighting academics and government apparatchiks over folks who’ve met payrolls and earned profits. Summers’ two year stint as an adviser at hedge fund D.E. Shaw made him one of the few members of the Obama White House with “real world” experience.

Certainly such a move would make it a bit less likely that president would, as he did at Monday’s town hall meeting, have to reassure Corporate America that he believes making a buck isn’t morally inferior to community organizing.

But such a decision could have policy implications as well. A CEO in the vicinity of the Oval Office might point out the risks of regulatory overhaul amid economic uncertainty. Or he/she might highlight how higher taxes can alter the risk-reward calculations of business owners and investors. Just having someone in the West Wing that business sees as offering a sympathetic ear might be enough to spur détente.

But the significance of the position shouldn’t be overstated. Traditionally, the NEC director is a coordinator more than an idea generator. In that way Summers has been something of an anomaly. He served as Obama’s maximum economist in 2009, designing the stimulus plan, helping steer financial reform and keeping a watchful eye on markets.

During the past year, though, there’s been a sneaking suspicion with the November midterm elections approaching that more policy is being conducted by the Obama political gurus than the financial guys. If so, that power shift may continue as the president continues positioning himself for a possible 2012 reelection campaign.

Still, with the economy clearly the top priority of voters, Obama’s pick to replace Summers will be given plenty of symbolic weight. And with business still nervous about taxes, deficits and regulation a friendlier face would be a way for him to sound the “all clear.”

A few thoughts on Elizabeth Warren

Sep 16, 2010 15:20 UTC

It looks like an end-run around the Senate, but liberals activists have still managed to get Elizabeth Warren into the Obama administration. A few thoughts:

1. I keep hearing how the WH is going to adopt a new tone with business. But picking Warren means that adjustment is more of a 2011 thing, I guess.

2.  I also hear that this Plan B might provoke senate Republicans into holding up Obama’s stalled Fed nominees.

3. Doesn’t this undermine Tim Geithner just a bit? She has been highly critical of Geithner in relation to TARP, which he has touted as key to the economic recovery.  Warren would also have preferred, her work on the TARP panel suggests, bank nationalization and mass bank executive firings in 2009. Geithner was completely against that.

4. The financial industry will complain about the Warren pick, but it now seems unlikely that either Warren or Michael Barr will end up running this new agency.  The two differ more on style than substance. So maybe the eventual pick will be someone more moderate that can better deal with a more Republican congress.

5. There is an old management rule: Never hire someone you can’t fire. Obama violated this rule by picking Hillary Clinton for secretary of state.  And he just did it again.

  •