First, was the blunder with the cabinet nominations. If one includes the withdrawal of Bill Richardson, the incoming administration failed three times to show due diligence in the vetting process that is a fundamental part of nominating somebody for a cabinet post.
Second, came a little publicized news item: the administration decided that the Census Bureau is not going to be anymore part of the Commerce Department, but is going to depend from the White House, although now they are backpedaling on it. The census counts noses and it is important for determining the boundaries of political districts.
Last, but not least, came the announcement of the stimulus. To me it sounded like "here you are $787 bn, and the details will come later." The markets did not like it, and it is no wonder . Look at The Financial Times graphics, and you will see that the details are very fuzzy.
Now there is a homeowner rescue plan that it is likely to flop, and a trillion dolars to revive the moribund mortgage market, as an attempt to jumpstart the rest of the credit system.
My conclusion is that, so far, this administration has shown the following problems:
- The crisis is due to a lack of confidence, not money, and this administration does not know how to build confidence. Quite the contrary, they are making everybody more nervous by throwing good money after bad.
- There is a tendency to concentrate power in the White House that is worrisome. Signs of this are the census fiasco and the decision to tackle the problem of the auto industry without nominating a czar.
- All new administrations show inexperience, but in some areas you can always bring seasoned people to remedy this. The cabinet nomination process is a tried and true one, and the last Democratic administration was in power only nine years ago. There should be enough Democrats around that remember how to do it right. It seems that they are not in Mr Obama's rolodex.
