How Obama Picks a Cabinet Member

Posted on March 14, 2011


OBAMA-Style Executives
President Obama’s economic philosophy is corporatism, and the two corporate executives reportedly on Obama’s short list for commerce secretary are perfect specimens of this state-industry collusion. If Obama chooses former Pfizer CEO Jeffrey Kindler or former Google chief Eric Schmidt to head the Commerce Department, the media will declare it part of a “tack to the center” or “making amends with business.” Instead, it would simply confirm what we already know about Obama: His type of businessman is oriented toward government more than the market.

Kindler and Schmidt are both long-time Obama boosters. Kindler gave Obama $5,000 before the last election, while Schmidt was an Obama fundraiser and personally contributed $25,000 to Obama’s inauguration. But the businessmen’s coziness with Obama is not the issue — nobody expects Obama to appoint his enemies.

What makes their candidacy for commerce secretary so fitting is their view of the business-government relationship.

Pfizer under Kindler was the leading spender on lobbying in an industry that spent the more on lobbying than any other. The company’s $25 million lobby budget in 2009 shattered industry records. But during the health care reform debate that year, Kindler wasn’t just deploying revolving-door hired hands to K Street – he was working the halls of power himself.

Justifying Kindler’s 12.5 percent salary increase to $1.8 million, the Pfizer’s proxy report stated: “During 2009, Mr. Kindler was actively involved, through both Pfizer and external organizations, in developing and advancing U.S. and global public policies that serve the overall interests of our Company and our shareholders. These efforts included constructive participation in the U.S. legislative process to advance Pfizer’s goals of achieving a more rational operating environment; improving Americans’ access to quality, affordable health care.”

Kindler was at the first Obama White House meeting with the drug industry on March 5, 2009. He also took part in the June and July 2009 meetings at the White House where Obama agreed to drop his campaign promise to allow re-importation of prescription drugs — Pfizer’s proxy statement specifically cites the preservation of this government favor when justifying Kindler’s raise — in exchange for the drug industry’s support of the bill and vulnerable Senate Democrats who backed it.

In the end, the bill provided new subsidies for prescription drugs, required states to cover drugs under Medicaid, preserved the re-importation ban, created 12-year-long, government-enforced monopolies on biologic drugs, and gave plenty more big-government favors to the industry. A few months after the bill passed, the Pharmaceutical Research and Manufacturers of America – the largest single-industry lobby in the country and a staunch supporter of Obamacare – tapped Kindler as chairman.

Read more : By Timothy P. Carney