Tuesday Morning Ponderings

• Understandably, many on the left have questioned why GM’s Rich Wagoner was tossed underneath the bus while financial sector executives are permitted to carry on. Yet I wonder if the Obama administration has instead achieved the equivalent of Godfather like leverage with recipients of TARP money: they know he’s making them an offer that can’t be refused. I hope so because up until now the financial sector has been like bank robbers threatening to drop more bags of nitroglycerin on the economy.

• I remain convinced that among the reforms needed is comprehensive anti-trust legislation to break up mega-sized financial institutions and empower local community banks. Is it too much to hope that congressional conservatives and liberals opposed to the TARP money will eventually collaborate on such reforms? There is a crying need for it and the country would likely support it.

• Today’s G-20 summit (which is really about thirty nations) is perhaps the most important international gathering since FDR, Churchill and Stalin met at Yalta in February 1945. Six decades ago the post-war world was being shaped with America as the preeminent power in an emerging cold war competition. Today’s geopolitics is multi-polar and President Obama must navigate in an arena in which America’s leverage and credibility are severely diminished. Nonetheless, the global economy as well as challenges such as global warming and terrorism can’t be effectively addressed without American cooperation. My hunch is that President Obama will excel in this arena requiring high caliber statesmanship.

• Is today’s special election in New York State’s congressional 20th district a bellwether? Typically, voters in the New York 20th are Republicans. Nonetheless, Democrat Kirsten Gillibrand prevailed in 2006 and her appointment as Hillary Clinton’s replacement has resulted in today’s spirited contest between Democrat Scott Murphy and Republican State Assembly leader Jim Tedisco. The Obama administration has enlarged the importance of the race by putting its political muscle behind Murphy. If Murphy loses Republicans will claim the country is turning against the administration’s ambitious agenda. If Murphy prevails, Democrats will hopefully be emboldened to push ahead on progressive initiatives such as health care. Turn out in special elections are always mysterious so this race is hard to predict.
  

• New York State Governor David Paterson and Senate Majority Leader Malcolm Smith are so hapless, that Sheldon Silver has emerged as Albany’s dominant power center. Silver, the longtime Assembly leader and adversary of transparent open government has easily rolled both Paterson and the novice Smith in budget negotiations. Appropriately, today’s New York Times has an article entitled, “Albany’s Big 3 Is Cut to One.” As I and many reform minded New Yorkers feared, the window of opportunity to reform Albany’s government ended with Spitzer’s resignation last year. What a shame.