I must confess that there are certain types of human activity that are a complete mystery to me, and much of the column ink spilled this weekend serves as a vivid reminder.
There are two types of articles very much on display:
1. Who will key members of Obama’s cabinet be (with the financial press focused on the Treasury secretary possibilities)
2. What should Obama do? Tons, and I mean TONS, of advice pieces. The New York Times Sunday business section, for instance, has seven articles with advice on economic policy, and they don’t come close to converging.
This sort of speculation is impractical. We can natter all we want to about who Obama may pick, should pick, and what the implication of those choices might be. Guess what? He is gonna pick someone, and he isn’t listening to any us out here in the peanut gallery.
And even if we think we know how someone may operate (“oh, if he chooses Summers, than means X”), again guess what? The script may not play out as expected. Before Robert Rubin, no one though the Treasury secretary has much power, Rubin enlarged the role via making himself a combination of a negotiator and consigliere in Clinton’s cabinet, and moving fast in the Mexican currency crisis (which for him had the good fortune to happen early in his tenure), which gave him a lot of cred. The early Bush Treasury secretaries were unmemorable, and Paulson looked like an ineffectual bull in the china shop until September, when the combo of the Fannie/Freddie conservatorships and a $700 billion checkbook with virtually no strings attached suddenly gave him sweeping authority.
Similarly, look how Henry Kissinger, as national security advisor during Nixon’s first term, assumed more power than the Secretary of State William Rogers. It is possible, for instance, that Obama may have an unconventional economic policy decision-making structure, given the scale and complexity of the issues at hand, particularly with Paul Volcker having apparently become a trusted advisor.
And why do we feel the need to have people, yes, prominent and (hopefully) informed people offer up policy wish lists when Obama has a very large team that is no doubt already inundated with suggestions from their extensive network of contacts and experts? There might be ways of framing the possibilities that could be useful for the larger public (“If Obama hasn’t addressed X and Y by this date, Z will be the consequence”), but few are. And there are so many of this type of piece running now that they strike me as a lot of background noise (but it there are any that are really a cut above the rest, readers are welcome to point them out).
I can understand trying to guess what the Fed might do with interest rates, for instance. The Fed will do something (or not), it has only a limited range of choices, its action will have an impact on asset prices, so investors have reason to engage in that sort of guessing game. But the sort of speculation on display is so far removed from being able to help predict the outcome of any particular decision that I am at a loss to understand why it is nevertheless such a popular activity.