Amateur hour at Obama's White House
What Obama isn't learning from Brazil: to hire people with real-world experience to solve real-world problems
Not long ago, a major democratic nation faced "economic and financial collapse." It "was on the verge of economic implosion and default. Growth was languishing," debt exploded, the government faced "unfriendly global conditions," not to mention "doubt and pessimism" and "corporate scandals."
That country went and elected an avowed socialist as president. Not our own Barack Obama; his enemies call him that. We mean Brazil, and the president was Luis Ignacio "Lula" da Silva, a radical labor leader whose opponents warned his long advocacy of working people over capital would ruin Brazil's fragile economy.
Last Saturday, Lula retired after his second term, leaving his ally Dilma Rousseff in the job, and having "managed to turn his country around," cut unemployment "in half," and put the nation "in a position to sustain high economic growth for many years, strengthen an already robust financial situation, and better meet the aspirations of the poorest segments of its society," writes Mohamed El-Erian, boss of the trillion-dollar bond giant Pimco, in this Bloomberg article.
How'd he do that? The President "recognized that there were no inherent contradictions among financial stability, economic growth and improved social conditions," writes El-Erian.
He set a "well-defined" but also "flexible" plan for government spending and market improvements. "He was open about the serious challenges," clear about his plans, and respectful to independent instutions, especially the nation's central bank. This "was crucial to promoting broad respect for fiscal responsibility."
And then, "he delegated implementation to a carefully chosen set of technocrats. He intentionally didn't rely on experienced policy makers, choosing instead new faces that quickly became credible economic spokesmen both within and outside Brazil." El-Erian called Lula a model other companies' presidents should follow.
Meanwhile, Obama is hiring Gene Sperling, yet another policy guy, and Clinton retread, to replace the departing Lawrence Summers as his chief economic adviser.
At least Summers was a genuine rocket-scientist PhD economist. Sperling is a professional policy wonk (Clinton and Cuomo), think-tanker (Brookings, the Center for American Progress), pundit (Bloomberg), and charity consultant (for Goldman Sachs).
Not only isn't he a "technocrat". He's a lawyer by training. He's never actually run anything, that we can see. Except, previously, the same National Economic Council he's taking over from Summers, which Sperling also ran for Clinton, negotiating bank deregulation with Congress, which helped get us in the mess we're now in.
Can we trust a guy with this background to know the impact of his cherished state initiatives on business - or labor, for that matter?
(El-Erian, who makes a living trying to read the US Treasury and Federal Reserve and presumably stay well-sourced in our nation's capital, declined through spokesman Mark Porterfield to comment about whether his advice that other presidents copy Lula should apply to Obama, too.)