Wednesday, April 29, 2009

The Sherpa Oligarchy

Matthew Yglesias --

Amid a serious economic crisis, Congress has still not confirmed Obama's appointees for several key Treasury posts. To be sure, not-yet-confirmed appointees have some capacity to do their jobs on an unofficial basis. But they lack legal authority, and are unable to represent the administration in dealings with foreign governments, state governments, members of Congress, or business leaders. This is a real handicap to the government's ability to conduct important business ... A big part of the problem is that the U.S. simply has an outrageously large number of political appointees running the executive branch. Most democracies operate more the way we run our military, with the vast majority of senior administrative posts in the hands of career professionals. Overall policy direction is set by a relative handful of politicians and political appointees, who have some discretion over which career people fill which slots.

Let's consider the biography of a someone who is a product of system that would meet Matt's preferences --

Sir Gus O'Donnell took over as Cabinet Secretary on 1 August 2005. Prior to that, he was Permanent Secretary to HM Treasury (July 2002 – July 2005). Before that he had been Managing Director, Macroeconomic Policy and International Finance since 1999. From 1998–9 he was Director of Macroeconomic Policy and Prospects, and from 1997–98 was the UK's Executive Director to the IMF and World Bank.

He has also been Head of the Government Economics Service, the UK's largest employer of professional economists, since 1998. Gus O'Donnell studied economics at the University of Warwick and Nuffield College Oxford.

So he's an economist with impeccable educational credentials who's been in or around the table of every critical economic policy that the UK has made since 1997. Decisions which have worked so spectacularly well that he gets to stay in his job now and keep the show on the road. And he's the one who complained about the lack of counterparts at the US Treasury making the G20 preparations harder for him and his fellow technocrats in the other 19+ countries. And while senior bank executives and bank shareholders lose their jobs and their shirts, he and his fellow technocrats all get to keep their jobs and indeed with the increased role of government post-crisis are even more powerful than before.

Under the US system, we get new suits in those jobs with a new President, and they have to be confirmed by Congress. It's not such a bad system.

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