Monthly Archives: January 2012

Bill Daley is out, Jarrett still there – Whither Obama White House Now?

When Bill Daley first took on the job as White House chief of staff I wondered whether he realized what he was getting himself into. There was little doubt then or now that the real power in the White House is Valerie Jarrett, Obama’s comrade in arms for two decades now, going back to the days when Obama was paling around, as David Remnick confirms, with Bill Ayers in their jointly run education policy effort, the Chicago Annenberg Challenge.

The latest confirmation of this comes in the form of Jodi Kantor’s new book which contains anecdotes indicating clearly Jarrett’s central role. And, of course, as I have suggested here many times in the past the cement that holds Jarrett and the Obamas so closely together is ideological.

After a year of breaking his tough head against the Barack-Michelle-Valerie troika – and with a few important victories under his belt – Daley has decided to bow out.

Under the circumstances, who can blame him? But the real question is what now? It would appear that the Daley decision – and the President and media reporting makes clear this was Daley’s decision – clearly took the President by surprise.  Daley is an important link between the White House and major business figures and that has to include major potential donors to the Obama campaign. So one possibility here is that this resignation could have negative implications for the President’s reelection campaign.

It has also been reported that Daley was a critical player in pushing the Obama team to deal seriously with threats like Osama bin Laden in the face of opposition from Jarrett. Thus the future relationship between the inner circle around Obama and the wider national security team now would appear to be in doubt.

Like a pebble thrown into a still lake, the ripples from this event will spread far.  Stay tuned.

William Daley to step down as Obama’s chief of staff – latimes.com.

The Myth of Japan’s Failure by Eamonn Fingleton

As long term followers of my blog may recall I am a big fan of the work of  economics writer Eamonn Fingleton, whom I count as well as a personal friend. Eamonn has been a keen follower of economic development in Asia. He has written several very important books that deserve even a larger readership than they have already achieved. The opinion essay he has in tomorrow’s New York Times, link below, may help.

Eamonn succinctly makes the case that the Asian economies get something right – that there is an alternative to the Washington consensus and as of yet American liberals have yet to really grasp this. Japan and now China are engaged in capital intensive investment that also pays attention to the risks of unemployment.  Both countries, particularly China, achieve this in part by authoritarian forms of politics. But they do not shy away from the link between manufacturing and global economic competitiveness.

In the wake of a devastating economic crisis and the response of movements like Occupy Wall Street it is high time that the American left articulate a new approach. These days it seems that only Sarah Palin and Rick Santorum know that there is a working class in this country.

The Myth of Japan’s Failure – NYTimes.com.

New book on Obamas stirs controversy….but why?

You have to wonder about the background and experience of today’s professional politicians.

Take the new book on Michelle Obama by New York Times reporter Jodi Kantor, described in detail at the link below. Kantor describes an incident where Obama advisor Valerie Jarrett squares off with then White House press secretary Robert Gibbs. Gibbs apparently felt blindsided by Jarrett who tore him a new one over a small incident involving the first lady. What appeared to get Gibbs’ goat most was that Jarrett appeared to have acted on her own in defense of Michelle without the first lady’s knowledge. That sent Gibbs over the edge and the f-bombs flew.

But really, how surprised could Gibbs have been? Did he not recall the incident during the campaign itself when he and other white staffers were called together at the Chicago residence of Jarrett to listen to a dressing down delivered by Obama ally Chris Edley, the black dean of Berkeley Law? Did Gibbs really not believe that there was a racial edge to what held the Obama insiders together? And did he not understand that there is no daylight at all between the Obamas and Jarrett?

Of course, readers of this blog are long familiar with the political history of the Obamas, from their apprentice on the south side of Chicago where Obama worked closely with former radicals like Bill Ayers and Mike Klonsky who had turned away from their earlier pseudo-marxism for a new form of poisonous racial and identity politics. And, of course, although it is no longer polite to recall this, there was the 20 year record of the Obamas sitting in the pews of Rev. Wright’s black nationalist church in that same south side milieu.

So while the details of the Kantor book help put some nuance on the real nature of the Obamas’ background and race driven approach to politics, you have to wonder at the surprise of the professional political class.

The larger story here, of course, is the collapse of traditional American liberalism. Remarkably if you turn on Fox News you will hear Sarah Palin or Rick Santorum talk endlessly about the problems of the “working class” but liberals fear being tagged “reds” if they use the word. Instead, multiculturalism and identity politics are the order of the day. Of course, these concepts have proved useless in the face of serious economic collapse, not least of all for black and hispanic American who have been hit even harder than whites by the collapse of the financial markets.

If liberals want to deal with these problems they have to stop their flirtation with the dead end racialized politics of Bill Ayers and Jeremiah Wright and get serious.

via Michelle Obama had tense relationship with president’s top advisers, book asserts – The Washington Post.

Will SAG Pension Fund Crisis Stop the SAG-AFTRA Merger Process?

As I have suggested in recent posts, one of the potential pieces of collateral damage that could emerge from the governance crisis at the SAG Pension Fund is its impact on the push to merge SAG with its sister guild AFTRA.

Most readers of my blog are familiar with the background but just to refresh quickly:

SAG was formed in the heat of class conflict that spread across the country in the 1930s and while it has always thought of itself as a guild not just as a union, it has always retained a link to that past when figures like Boris Karloff, James Cagney or Lyle Talbot  stood up in defense of those trying to make it in Hollywood.

While actors were always at its core, the Guild expanded somewhat over the years to include stunt persons, background actors, dancers and others. Yet it retained a coherence and homogeneity that I think gives it a unique position in the creative and business world. While SAG leaders have struggled in recent years to map out a strategy for improving the position of actors in a changing financial and technological environment, that unusual culture remains a potential weapon. It was on display in the 2000 commercial strike and in the solidarity SAG showed striking Southern California grocery workers in 2004 and the Guild’s fellow writers on strike in 2008.  And that solidarity has been returned by labor when, for example, the Nashville branch of SAG was able to get support from auto workers during the commercials strike.

AFTRA has a different history, and culture, more akin to a narrowly focused business union having been cobbled together from the older radio world and then engaging in direct conflict with SAG in the 1950s when television emerged. AFTRA lost its attempt to take jurisdiction away from SAG in films for TV.  But over time AFTRA has been able to eat away at certain aspects of the acting business so that there is some overlap, particularly in television, between the two unions.  Somewhat suspiciously, the latest example has been the near unanimous signing of cable TV pilots by AFTRA, an arena that SAG used to dominate.

In addition a very significant part of AFTRA membership is made up of broadcast journalists and musical recording artists, who of course face very different working conditions than most actors.  More militant SAG activists maintain that AFTRA has weighed SAG down in contract negotiations and while the facts are difficult to sort out, it is the view of many that a merger should take place but that it should be done by moving AFTRA’s 40,000 actors to SAG with the broadcast journalists joining a more relevant union for them, perhaps the Newspaper Guild that is now part of the Communications Workers of America.  I wrote about that approach here.

However, missteps and poorly designed strategy by these same militants during the 2008 contract talks led to their ouster after a lengthy period of dominating the Guild’s governance, particularly in the Hollywood wing of the union. A new moderate coalition, made up of some in Los Angeles and other longstanding moderate groups in New York and SAG’s regional branches, now dominate the National Board and the staff of the Guild.

Unfortunately, they have no more strategic sense of how to build the power of actors than the militants and so have lighted upon the merger idea like moths to a flame. And now the SAG Pension Fund blow up threatens to burn them.  At a minimum it may alter the balance of power in the negotiations now underway between the two guilds.

First, of course, is the problem that while the unions are in active face to face merger negotiations right now in Los Angeles, none of the people at the table can talk in any detail about the Pension Fund issue. Several at the table may have more facts but if they do it is because they are trustees or staff who owe a fiduciary obligation to the Pension Fund.  That means they may face some liability for either participating in the crimes that some allege have been committed or may face liability for failing to put in place effective controls to detect and prevent those crimes.

Second, since the facts are not known then neither is the scope of the potential problem. An earlier scandal just two years ago at the fund led to a multi-million dollar lawsuit and the fund had to recover stolen funds from its insurer. Some claim that improved controls under the current board of trustees and staff of the fund were put in place but the whistle blower letter from ousted Fund executive Craig Simmons suggests that this was not the case. The LA Times reported today that the scope of the scandal is growing with an active Department of Labor investigation underway.

Third, the implication is that a merger partner like AFTRA has to ask itself what level of risk it may be absorbing if merger goes forward.  At a minimum AFTRA will want to be indemnified against that risk and that may require some form of set aside or other deal term.

That in turn puts SAG on the defensive in the negotiations over the merger and may lead AFTRA to demand other concessions in the negotiations. To this point, there has been remarkably little transparency about the terms on the table – a marked contrast to the kind of openness that prevailed during contract talks with the employers when there was wide public understanding of the key issues. (It is always painful when I find such examples of organized labor not practicing in its own house what it preaches to corporate America.)  So SAG members are mostly in the dark about the deal terms under discussion.

In sum, the SAG Pension Fund crisis could not have come at a worse time from the standpoint of SAG’s position in the merger process. It is entirely possible that the process will have to be put on hold until the parties have a clearer picture of the situation. It would certainly be in SAG’s interest to consider such a delay because the uncertainty only gives AFTRA greater leverage in the bargaining process.

CEO of SAG Producers Pension and Health Plans Dow [down but not] out

SAG moderates argued strenuously for months that what I called a “governance crisis” at the SAG Pension and Health Plan was nothing much to worry about.

“Move along, nothing to see here,” was the essential refrain.

In fact, things were clearly far worse than has been reported (or admitted by the moderates) and now the CEO of the fund has been ousted. [NOTE: Variety reports Dow is down but not out - reporting that the CEO is on a health related leave for 60 days with an intent to return. The LA Times has also now confirmed this version. It remains to be seen if this is genuine or a way of ushering the embattled CEO gently into that good night.]

The LA Times also confirms my suspicion that there is increased scrutiny over financial controls at the $2 billion fund, including an active investigation by the Department of Labor.

The question that will immediately arise is why the Pension Plan board issued what amounted to a defense of the CEO only a few days ago and argued that they had resolved the allegations made by ousted fund executive Craig Simmons.  Instead of a genuinely independent investigation that was “above suspicion” they clearly made Mistake 101 in corporate governance: they circled the wagons engaging as an investigator someone the anti-merger activists charged was a crony of SAG NED and Fund Trustee David White.

As a result they have now handed anti-merger activists a huge propaganda victory. One immediate question likely to arise is whether the SAG board members or staff who are also Pension Fund trustees will face any liability for failure to exercise their fiduciary obligations.

The only other major news in the last few days in SAG-land was the oddly timed public reporting that White’s contract with SAG was quietly extended until 2014 – last spring! That may have been a not so subtle reminder to White opponents that while dumping Dow under the bus may be feasible dumping White because of his role in the Pension Fund’s problems would be very expensive.

This is breaking and I will convey details as they are reported.

Dow takes leave as CEO of SAG Producers Pension and Health Plans – latimes.com.