Obama’s ‘Katrina Moment’?

Further to my earlier musings, it seems to me that the growing public outrage in the US (and elsewhere, including the UK) about the behaviour and mores of the banking sector poses a serious risk to politics-as-usual. Although the analogy is regularly discounted by contemporary sages, I keep thinking of what happened in Germany during the Great Depression, when the perceived incompetence of the political establishment at a time of economic emergency provided fertile ground for the rise of Nazism.

The rising level of popular rage in the US poses a real challenge to the Obama administration. It will take consummate political skill to manage and assuage it. All the evidence we’ve seen so far suggests that (a) the president is the only person in the Administration who possesses those skills, and (b) that many of his key appointees don’t possess them in the smallest measure. A case in point is Larry Summers, who may have a four-digit IQ, but has the political and emotional sensibilities of a dead cat.

Frank Rich made this point in a terrific OpEd piece in the NYT today.

Bob Schieffer of CBS asked Summers the simple question that has haunted the American public since the bailouts began last fall: “Do you know, Dr. Summers, what the banks have done with all of this money that has been funneled to them through these bailouts?” What followed was a monologue of evasion that, translated into English, amounted to: Not really, but you little folk needn’t worry about it.

Yet even as Summers spoke, A.I.G. was belatedly confirming what he would not. It has, in essence, been laundering its $170 billion in taxpayers’ money by paying off its reckless partners in gambling and greed, from Goldman Sachs and Citigroup on Wall Street to Société Générale and Deutsche Bank abroad.

Summers was even more highhanded in addressing the “retention bonuses” handed to the very employees who brokered all those bad bets. After reciting the requisite outrage talking point, he delivered a patronizing lecture to viewers of ABC’s “This Week” on how our “tradition of upholding law” made it impossible to abrogate the bonus agreements. It never occurred to Summers that Americans might know that contracts are renegotiated all the time — most conspicuously of late by the United Automobile Workers, which consented to givebacks as its contribution to the Detroit bailout plan. Nor did he note, for all his supposed reverence for the law, that the A.I.G. unit being rewarded with these bonuses is now under legal investigation by British and American authorities.

Summers is not the only tone-deaf appointee Obama has made. Most of the key figures in his Administration are poster children of the US Ivy League meritocracy — the kind of kids who, in other circumstances, would expect to have had great careers in the investment banks and hedge funds and law firms that presided over the current disaster. They have little empathy with ‘ordinary’ Americans, and know little of routine politics as it’s conducted on the ground. As such, they are walking disaster zones at such a sensitive and tricky time. what Obama needs around him now are not just liberal policy-wonks and rocket scientists, but old-fashioned pols (like the late Tip O’Neill, or even, Goddam it, Lyndon Johnson).

What happened in Germany was that the rage, fear and frustration of ‘ordinary’ people was turned on what they saw as a myopic, impotent and insensitive political establishment which appeared to be unaware of their concerns. In the end, they turned on that establishment — and gave the Nazis their opportunity. Something similar is beginning to happen in the US, and it’s scary. The US may never have produced a Hitler. But it did produce Joe MacCarthy.

Obama names the United States’s CTO

From NYTimes.com

Perhaps not surprisingly, President Obama has formed a close friendship with the District of Columbia’s young, Blackberry-addicted, problem-solving mayor, Adrian Fenty. Now, the president has raided Mr. Fenty’s staff to name a youthful, Indian-born techno-whiz as his first federal chief information officer.

The White House said Thursday that it had selected Vivek Kundra, 34, the chief technology officer for the District, to the federal position, where he will be expected to oversee a push to expand uses of cutting-edge technology. He will have wide powers over federal technology spending, over information sharing between agencies, over greater public access to government information and over questions of security and privacy.

But he will also – as Mr. Obama mentioned twice in the space of a six-line comment distributed by the White House – look for ways to “lower the cost of government operations” through technology.

Mr. Kundra’s background seems to suit him well for both aspects of the job. Born in India, he lived in Tanzania until the age of 11, when he moved to the Maryland suburb of Gaithersburg. One of his first memories there, according to a profile last month in The Washington Post, was of seeing a dog-food commercial on television. “I was shocked,” he said. “I was used to seeing people starve in Africa. It was mind-boggling to me that people could afford to feed their dogs!”

I like the sound of this guy. For example,

In just 19 months with the District, Mr. Kundra has moved to post city contracts on YouTube and to make Twitter use common in his office and others. He hopes to allow drivers to pay parking tickets or renew their driver’s licenses on Facebook.

His office’s Web site offers a “Digital Public Square” with links to information on everything from crime to parking to tourism. It provides a map of free wi-fi hot spots, a public library finder, leaf-collection schedules; even a widget to view live snow-plow progress.

Good Morning Silicon Valley gave some more detail:

In his D.C. job, Kundra attracted attention with his embrace of all things Web 2.0, moving the district’s 38,000 employees off of Microsoft’s Office software and into Google’s cloud-based applications, encouraging the use of social channels like YouTube and Twitter, and turning to crowdsourcing for development of apps of use to taxpayers (or as he calls them, “co-creators”). Based on brief remarks to reporters today, Kundra plans to take the same approach on the federal level, shunning expensive customized systems where possible in favor of off-the-shelf software and services. In Washington, “when I left my place and went to the local coffee shop, I had more computing power in my hands than the average teacher, the average police officer, and the average public works official,” he said. “The reason was because the public sector decided it was so special that there was no way it would adopt consumer technology. … You have Darwinian innovation in the consumer space, and that fundamentally lowered our operating costs.”

Kundra is also intent on giving citizens greater access to the vast reservoirs of data collected by the government on their behalf — a move also gaining momentum in the House — to allow third-parties to mine, analyze and mash up the information in ways not possible now. “There is a lot of data the federal government has and we need to make sure that all the data that is not private, or restricted for national security reasons, can be made public,” he said. Kundra plans a new site, Data.gov, to serve as a repository.

Ambitious aims, given the legendary intransigence of the federal bureaucracy, but a definite signal that the days of business as usual are ending. Says Tod Newcombe at Government Technology: “Kundra’s blend of public- and private-sector experience also bodes well. His ability to think outside the box, combined with his understanding of politics are two highly touted skills that a government CIO needs to move IT projects forward in the federal bureaucracy jungle. Finally, Kundra’s enthusiasm for technology as a powerful enabler and transformer, not just as plumbing to keep static government programs alive, marks a sea change in attitude regarding the business of government in the 21st century. Dare we say a paradigm shift?”

Now just imagine who John McCain would have chosen for the post. Probably the CEO of SCO.

Here we go… again.

I’m a big Obama fan and am delighted that such a handsome couple have made it to the White House. But there’s something depressing about seeing Mrs Obama draped on the cover of the latest edition of the premier fashion rag. She’s a clever and interesting woman, but the glossy media are going to do their utmost to turn her into a clothes-horse. And it looks as though she’s playing ball. Sigh.

Photo by Leibovitz, naturally. Explains why she’s the only snapper in the world who can afford a private jet.

Computing’s religious wars

From this morning’s Observer column.

Umberto Eco once wrote an intriguing essay about the differences between the Apple Macintosh and the PC. ‘The fact is’, he wrote, ‘that the world is divided between users of the Macintosh computer and users of MS-DOS compatible computers. I am firmly of the opinion that the Macintosh is Catholic and that DOS is Protestant. The Macintosh is… cheerful, friendly, conciliatory; it tells the faithful how they must proceed step by step to reach – if not the kingdom of heaven – the moment in which their document is printed. It is catechistic: The essence of revelation is dealt with via simple formulae and sumptuous icons. Everyone has a right to salvation.’

The PC was very different: ‘Protestant, or even Calvinistic, it allows free interpretation of scripture, demands difficult personal decisions, imposes a subtle hermeneutics upon the user, and takes for granted the idea that not all can achieve salvation. To make the system work you need to interpret the program yourself: Far away from the baroque community of revellers, the user is closed within the loneliness of his own inner torment.’

Where you can see the Inauguration

Useful set of links.

After the president takes the oath of office and delivers his Inaugural address and following the departure ceremony for the outgoing President, he will be escorted to Statuary Hall in the U.S. Capitol for the traditional Inaugural Luncheon. This is the menu:

Er, the first course will be served on replicas of the china from the Lincoln Presidency, which was selected by Mary Todd Lincoln at the beginning of her husband’s term in office. The china features the American bald eagle standing above the U. S. Coat of Arms, surrounded by a wide border of “solferino,” a purple-red hue popular among the fashionable hosts of the day.

How do I know all this? Why I visited the relevant Senate web site.

Now that’s what I call a ‘government of all the talents’

The NYT is reporting that Obama will nominate Steven Chu, the director of the Lawrence Berkeley National Laboratory, as his energy secretary. What’s interesting about that? Well, Mr Chu has a Nobel Prize for physics. Rather puts Gordon Brown’s feeble efforts to attract talent to his administration in perspective, doesn’t it. Who was it he appointed — a guy called Digby Jones?

The Obama rebound?

Sometimes, it’s ifficult to know what to think. This morning the Today programme carried a chilling article about the upsurge in US gun sales since Obama’s election. On the other hand, here’s an interesting reflection Mark Anderson.

The old adage says, The darkest hour is just before the dawn.

It’s hard to be upbeat these days, when every statistic is worse than the last. But the other day, as I was considering predictions for the coming year, a thought occurred to me: we are experiencing the waning days of the administration I have repeatedly called the worst in US history. Of course things look dark.

Is it possible, once the new administration is in place, that hearing daily announcements of LIPs (leadership, ideas and plans) put forward by people who are both smart and qualified, will have the opposite effect on the public from the constant drumming of fear we continue to have today?

Of course.

Is it also the case that markets react more to perception than to ground truth?

Generally, yes.

So I asked myself, what will the state of mind be of the average American, say, three weeks into the next administration – let’s say, by Valentine’s Day, February 14th?

If their house has just been foreclosed and their car repossessed, we know what they’ll be thinking. But otherwise, I expect it will be radically more optimistic than it is today.

Is that enough to provide a market rebound? It could be.