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The Commerce Department: a bureaucratic hodge-podge where old habits die hard

Apparently Judd Gregg voted to blow up the Commerce Department in the '90s and now here he is running it. Some of you may think that disqualifies him. But I worked as a senior official in the Commerce Department and I think it recommends him.

The Commerce Department is a bureaucratic hodge-podge held together by those old Washington stand-bys of inertia, habit, and the self-interests of Congressional appropriators. Oh, and neglect. And ignorance. Not only do most Americans not know what the Commerce Department does -- its various missions are so diffuse most people who work there don't know all that it does.

For a few choice months in 1995 and early 1996, I served as Acting Under Secretary of Commerce for International Trade during which time we enjoyed several periods of government shutdown due to budget disputes. We were asked to identify "essential personnel" who would be asked to come in to work in any case. That was tough enough. Harder still was recognizing after a while that you could probably shut the whole operation down and it would be six months before you got a letter of complaint from a constituent who noticed.

That said there are plenty of things that are done within Commerce that need to be done. We need a Patent Office. We need NOAA. We need a trade promotion and enforcement mechanism in the government. We need a Census Bureau. And so on. But they all belong in different places. In a rational world we would have a Department of Trade and Industry or a Department of Trade and Commerce that would bring together all the trade related agencies of the U.S. government. (Quick now, before they all atrophy into nothing.) So you would have the policy making parts of the USG trade apparatus (most currently in USTR) and the policy implementation parts of the apparatus (trade promotion from Commerce, trade finance from OPIC, Exim and TDA, trade enforcement from Commerce, export controls from Commerce and State, etc.) all in one place. NOAA could go to a Department of Environment and Resources. The Economics and Statistics Administration and the Census Bureau could shack up with Bureau of Labor Statistics and other statistical agencies in a National Bureau of Statistics, etc. You get the idea. A more rational structure. Monkeys will fly out of Judd Gregg's behind long before this happens.

I was talking yesterday to a senior Republican who said to me "if there were a list made by prominent Republicans of 100 good Republican candidates for Commerce Secretary Judd Gregg wouldn't even be on it." (Who knows, this could also be to his credit.) But the guy added, "also he's not seen as a number one guy by anyone. He's really at best a number two or a number three guy."

When it was suggested this was why he was picked, everyone around the breakfast table where the discussion was taking place nodded knowingly. Of course. The established power-center of the Obama economic team either doesn't want a strong Commerce Secretary or they don't care much about the job.

Here's the problem: the job of this administration is to rebuild our economy and for all its myriad structural flaws and like of budgetary clout, the Commerce Department is the only place with anything like the capability to play a role this area. High financial policy types don't typically think much about the grunt work of job-creation or supporting the businesses that actually create the jobs. And we have been so ideologically opposed to anything that had a hint of industrial policy to it for so long that there is no capability elsewhere to help determine where to best invest stimulus money or what the future of the U.S. economy will look like.

It is in the interests of everyone that Commerce be given not only an expanded role in these areas but the responsibilities and resources they will need to carry them out. This is a time for transformational leadership in this misshapen typically (and deservedly) neglected department. Will it come? (See earlier comment about flying monkeys.)

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David Rothkopf

Groundhog Day: the scariest economic statistic you'll read today

Today is the 10th Anniversary of Hugo Chávez coming to power. It's also, as my wife, who runs the Western Hemisphere programs at the U.S. Chamber of Commerce notes, Groundhog Day. So what happens if Chávez sees his shadow? He probably sees it as potential opposition and throws it in the slammer. And we get six more years of anti-American bombast, mismanagement, and atrophying democracy.

Yesterday's Obama interview with Matt Lauer before the Super Bowl was his most charming ever. It's good to see a guy enjoying himself. Obama, I mean. Lauer was a little too taken with the chumminess for me. He's the president, Matt. You're Al Roker's sidekick. (By the way, you wonder why the economy is where it is? Yesterday's Super Bowl ads were the worst in memory. Just when companies need good marketing the most, Madison Avenue gets brain lock.)

The scariest statistic to come down the economic pike in recent months? Not the ILO's prediction of 51 million unemployed worldwide in 2009. Not China's estimate of 20 million migrant workers in that country having lost their jobs. Not the projections of first quarter U.S. economic contraction passing the Fourth Quarter's 3.8 percent contraction at a trot. It's the Institute for International Finance's estimate that net private sector capital flows into the emerging world will fall in 2009 to one fifth their 2007 levels. That's, right, an 80 percent reduction in private sector cash into a group of fragile countries for whom such cash is the peace-keeper, the hope-giver.

On Meet the Press on Sunday, Steve Forbes described the failure of the financial system as a failure of the heart of the national economy. Same is true globally and its a good analogy. The system has suffered a massive heart-attack. The cash that was in circulation isn't making it to the parts of the system that need it. Which is why the world is flat on its back.

That said, for all the bad news and dire predictions, isn't it about time that politicians start recognizing that leadership requires also identifying what's positive and focusing on what's still working, what can be fixed, where we can go from here, what opportunities are being created? Was "never let a serious crisis go to waste" just the insight of a political opportunist. A system that suffers a 3.8 percent contraction, still is 96.2 percent functioning...and in the case of the U.S. economy, that still leaves many elements robust, still leaves the biggest economy in the world by far, still leaves an economy full of innovators, great companies, and consumers who are still buying. It's bad out there. But after the heart-attack, doctors will focus on getting well and not just on what a hair-raising near-death experience it has been.

Which calls to mind the biggest headlines out of Davos:... er... there weren't any. Just too many chicken littles and not enough mea culpas.

In the same vein, let's hope President Obama, Rahm Emanuel, David Axelrod, and the White House braintrust realize what lousy advice they are getting from the corner of the partisan mouthpieces like E.J. Dionne. In today's Post Dionne calls for the Dems to fight for "their" bill and pass it with or without Republicans.

This is wrong-headed on three counts. First, this crisis is way too big to rely on ideas from just one political group or another. People need to realize that if we make the wrong decisions or drag out the crisis or over-burden ourselves unreasonably with debt it is well within our power to end the American era, invite an end to the Pax Americana, and open the door to new rivals. At the very least, we will burden and diminish ourselves in unprecedented ways. And some of the Republican points re: focusing on more stimulative tax cuts and minimizing the fat in the bill, are hugely common-sensical. Next, it is bad political advice. It forces Obama to break his promise of post-partisan leadership and it puts the onus for the bill entirely on the Dems...and frankly, no one is very confident we're going to get this right on the first pass. Third, it is going to take a unified nation to get out of this mess and that means broad support for the measures that are passed is key. Further, Obama ought to recognize that past leaders who were seen as great champions of their party also derived success from drawing in cross-over voters. Reagan is the best example, giving birth as he did to the Reagan Democrats. Until there are Obama Republicans, Obama is just a wannabe as far as the goals he himself has articulated are concerned.

Rumors of Hillary to China (and perhaps Japan) are encouraging. (See my comments on this over on the Madam Secretary blog.)

But she should add India to the trip. She's well-liked there. Given Pakistan/Afghanistan, it is high up on the strategic partners list, and as the world's biggest democracy, it deserves that kind of special diplomatic shout-out. Further, her going there would be a great sign that she and the President understand the tectonic shifts in geopolitical power that are taking place right now, those two countries are moving to the head table of the international system (along with Brazil) and sending the message early on that we get that and support it would be an important message about the nature of the "new diplomacy." China is involved in so many critical issues that just as we were and are, in the word's of Sandy Berger, "the indispensable nation" for the world, China is the "indispensable nation" for us. Worry about them, keep an eye on them, squabble with them occasionally (although I might suggest, Secretary Geithner, that's best done in private), but figure out how to work with them because there are precious few major issues that don't require it. And India is close behind on a host of those issues (Afghanistan-Pakistan, trade, non-proliferation, climate change, maintaining the geopolitical balance in Asia, supporting democracy, etc.)

That woman in California who had six kids and then added octuplets to the mix? Who's going to pay for that mess? Let's sue her doctors now for conspiracy to commit child abuse and to stop the state for having to subsidize such demented selfishness. And of course, the mother ought to bear the consequences as well... although sadly, it will be her children who ultimately do. As is often said... in this country you need a license to fish or drive a car...

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