Streetwise Professor

One of the most underreported stories of the last week is the non-demotion demotion of Bill Daley as Obama’s Chief of Staff.  The prevailing narrative is that Daley was ineffective in working with Congress.  This view from lefty Jonathan Chait seems closer to the mark:

Daley, pursuing his theory, heavily courted business leaders. He made long-term deficit reduction a top priority, and spent hours with Republican leaders, meeting them three-quarters of the way in hopes of securing a deal that would demonstrate his centrism and bipartisanship. The effort failed completely.

. . . .

The effort failed because Daley’s analysis — which is also the analysis of David Brooks and Michael Bloomberg — was fatally incorrect. Americans were not itching for Obama to make peace with corporate America. Americans are in an angry, populist mood — distrustful of government, but even more distrustful of business.

. . . .

The effort failed because Daley’s analysis — which is also the analysis of David Brooks and Michael Bloomberg — was fatally incorrect. Americans were not itching for Obama to make peace with corporate America. Americans are in an angry, populist mood — distrustful of government, but even more distrustful of business.

. . . .

Since that debacle, Obama issued a course correction and started pursuing a strategy that’s in line with the realities of public opinion and the Congress, as opposed to Daley’s fantasy version thereof.

There is a core of truth here.  Daley was seen by many in corporate America as someone who would serve as a counterweight to Obama’s leftist instincts.  That’s obviously not going to happen.  And that’s why this story deserves more attention than it has gotten.  It is an indication of where Obama is going. (And just to make clear: I am no fan of Daleyesque corporatism.)

I also surmise that there’s another thing going on here, a Chicago game.  Although Chicago is a One Party State, that party is rent into factions that barely coexist at the best of times, and battle viciously at others.  Obama’s alter ego (or is it Svengali?), Valerie Jarrett, and Daley are from opposing, hostile, factions.  Jarrett was not pleased by Daley’s presence.  Jarrett is a hardcore progressive.  Daley’s goal–as described by Chait–was to soften the progressivism.

Daley’s departure likely marks Jarrett’s victory.  It also signals, as Chait suggests, a turn to a more hardcore progressive policy and strategy: if Jarrett has the wheel, there ain’t going to be any right turns.  It is a move towards the Occupy types and a move away from the corporatist, Democratic party establishment personified by Daley.

Helluva choice, eh?

But it means that the next 12 months will be even more confrontational and contentious, and the next election will be among the most divisive in recent history.  I’m thinking ’68, or something in the 19th century divisive.

Today saw another indication of Obama’s choice.  He has delayed consideration of the Keystone Pipeline from Canada to the US.  This represents another genuflection to Obama’s environmentalist, leftist base.

Substantively, the decision is weak.  Obama said the environmental issues needed further study.  But never have the opponents of the pipeline recognized that there are environmental trade-offs.  Less oil from Canada means no probability of a pipeline spill: it is unlikely to affect the amount of oil produced as Canada can look to other markets.  But less oil from Canada means more oil imports via ship and more offshore drilling, both of which pose their own environmental hazards–hazards that are almost certainly far more acute than those posed by Keystone.  Not to mention the benefits of reducing reliance on oil from places like Venezuela.

The administration also cannot get its story straight.  Today, the State Department said this was purely a department decision, with no White House interference or politics involved:

Election-year politics played no role in the decision, a State Department official said today.

“The White House did not have anything to do with this decision,” Kerri-Ann Jones, assistant secretary of state for oceans and international environmental and scientific affairs, told reporters on a conference call. “They did not direct us to make this decision.”

Funny.  Obama and his Press Secretary Jay Carney apparently weren’t aware of this:

Obama has indicated he will make the final call. In a television interview on Tuesday, he outlined the economic and health criteria he would consider when the State Department’s recommendations come his way.

Activists viewed that as a departure from White House assertions that State was running the process.

White House spokesman Jay Carney played down the president’s comments, saying State was taking the lead but the final decision would clearly represent Obama’s opinions.

“The State Department is part of the Obama administration, and you can expect that the ultimate outcome of this process will reflect the president’s views,” Carney said.

So which is it?

For those of you a little slow on the uptake, discount what the State Department person says.  This was all politics, and all Obama.

This, and the Daley demotion, are clear indications of where Obama is going.  And where he is going is left, and likely hard left.