David Corn

David Corn

Washington Bureau Chief

Corn has broken stories on presidents, politicians, and other Washington players. He's written for numerous publications and is a talk show regular. His best-selling books include Hubris: The Inside Story of Spin, Scandal, and the Selling of the Iraq War.

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Why Obama Should Replace Larry Summers With Eliot Spitzer

| Thu Dec. 4, 2008 3:42 PM EST

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It's easy to snicker at Slate magazine for signing up Eliot Spitzer, former New York governor and onetime john, as a regular columnist. But judging from Spitzer's first outing, it was a master stroke.

The manner in which Spitzer crashed and burned has essentially wiped out the pre-prostitution portion of the Spitzer tale, which included his longtime stint as a critic of corporate excesses. But Spitzer's opening column in Slate is a reminder that in these days of multi-billion-dollar bailouts, there are few powerful and knowledgeable figures in government raising the appropriate questions and challenging the save-the-rich orthodoxy.

From his Slate piece:

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The Curious Retention of Robert Gates

| Mon Dec. 1, 2008 2:57 PM EST

Barack Obama's national security team--at this early stage--presents more questions than answers. His selection of Hillary Clinton to be secretary of state has been a much-chewed-over topic of pundit puzzlement. And with the Monday morning unveiling of his senior defense and foreign policy aides, Obama made official another curious decision: his retention of Robert Gates as secretary of defense.

There's an obvious reason for Obama to keep Gates at the Pentagon. Having a George W. Bush appointee in charge will give Obama political cover as he proceeds with his plan to withdraw troops from Iraq. But there are several potential problems with this move. I've consulted two former Pentagon officials--who are critics of standard operating procedure at the Pentagon--who decry this move. (Neither wanted to be quoted, for they might now or later be in contention for a job in the Obama administration.) "It's probably the dumbest thing Obama's done," one said.

They identified three possible pitfalls. First, Gates is a lame duck. There has been no indication how long he will stay in the Pentagon's top post, but it seems Gates will remain there on a quasi-temporary basis. Consequently, Pentagon bureaucrats who don't want to see their prerogatives challenged--if Gates wanted to do such a thing--could try to wait him out. Second, Gates is no agent of change when it comes to the Pentagon budget. In the Bush years, the regular military budget has increased by 40 percent in real terms (not counting so-called "emergency" supplemental spending bills for the wars in Iraq and Afghanistan)--partly because of hundreds of billions of dollars in cost overruns. During the campaign, Obama talked about the need to cut "billions of dollars in wasteful spending" from the military budget. But Gates has yet to demonstrate he is truly interested in reworking the Pentagon's out-of-control budget. Keeping Gates in place sends the signal that Obama, who faces a host of hard jobs, is not eager to take on the Pentagon at the start of his presidency. "There are so many problems at home," says one of the critics, "Obama may not want to do anything fundamental about the Pentagon."

As Obama Taps Larry Summers, Recalling Summer's Days as a Regulation Foe

| Mon Nov. 24, 2008 5:58 PM EST

On Monday, President-elect Barack Obama announced his economic team, noting that Lawrence Summers would be the director of his National Economic Council. In touting Summers, Obama praised the former treasury secretary for his work during the Clinton years

Larry helped guide us through several major international financial crises – and was a central architect of the policies that led to the longest economic expansion in American history, with record surpluses, rising family incomes and more than 20 million new jobs. He also championed a range of measures – from tax credits to enhanced lending programs to consumer financial protections – that greatly benefited middle income families.
As a thought leader, Larry has urged us to confront the problems of income inequality and the middle class squeeze, consistently arguing that the key to a strong economy is a strong and growing middle class....And as one of the great economic minds of our time, Larry has earned a global reputation for being able to cut to the heart of the most complex and novel policy challenges.

While some of that might be true, Summers has been a controversial figure, and it's likely no accident that he is being handed a position that does require him to be confirmed by the Senate.

But despite Summer's intellect and experience, it's worth remembering that he did blow one of the major calls of the 1990s: what to do about financial derivatives--those esoteric financial products (such as credit default swaps) that helped grease the way to the subprime meltdown. Not only did Summers oppose greater regulation for those financial instruments; he led the opposition against it.

Hillary to State Appears a Done Deal, But What About Bill's Overseas Donors?

| Mon Nov. 24, 2008 12:07 PM EST

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It appears to be a done deal: President-elect Barack Obama will appoint Senator Hillary Clinton to be his secretary of state. But while the Obama camp's vetting of Bill Clinton's foreign entanglements and activities continues, there is one thorny matter that needs to be addressed publicly: the identity of the donors to Bill Clinton's foundation and presidential library.

The former president has raised millions of dollars from overseas officials and corporations for his foundation and library--while also pocketing mega-speaking fees from businesses abroad. (He's also struck an unusual deal with transnational mining conglomerate head Frank Giustra.) All of this raises potential conflicts and ethics questions. The basic dilemma: can Bill Clinton receive millions of dollars from foreign nations and corporations that may have an interest in US foreign policy while his wife oversees US foreign policy? Unless Clinton opts out of his (often admirable) globe-trotting activities, this situation seems almost too knotty to be untied.

But aides to Obama and Bill Clinton aides are trying to work out rules that would govern the former president's actions. Last week, The Washington Post reported:

Obama's No-Drama Pick for Treasury: Tim Geithner

| Fri Nov. 21, 2008 5:11 PM EST

Various news outlets are reporting that on Monday, Barack Obama will announce his pick for Treasury secretary: Tim Geithner.

Compared to the other leading contender, Larry Summers, a former Clinton Treasury secretary, Geithner, the president of the New York Federal Reserve, is relatively unknown. Geithner is a career economist (with no Ph.D.)--no Wall Street master of the universe--who has worked in three administrations for presidents of both parties. He's been described as not an imposing figure, but a rather competent and steady person. Which may be why the Dow Jones shot up after word of his appointment leaked. (Take that, Hank Paulson!)

In March, Financial Times published a profile of Geithner. Some interesting bits:

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