Check out the website:  Look at the recent Political Notes and Len’s Letters on the website. Political Note #344 Joe Biden’s Domestic Economy,  Political Note #347 The State of the States, Political Note #349 Joe Biden’s White House at the Highest Level, Political Note #350 Joe Biden’s White House, Domestic Issues

Political Note #352   The Traditional Economic Team

2020                            Governing

Joe Biden

Today’s Note addresses oldies, but goodies:  what I’ve called the traditional economic team.  The Department Commerce, The Department of Labor, the Small Business Administration, and the Office of the US Trade Representative.   Political Note #344 addressed nominees and appointees to the Treasury Department, to the National Economic Council, to the Council of Economic Advisors, and the Office of Management and Budget.

The Really Old Economic Team

Initially, really initially – established in 1789, there was the US Department of the Treasury.  Alexander Hamilton, who had a vision of how to make the United States of America a thriving economic power, was appointed Secretary.  The Treasury Department was each President’s economic team through the 19thcentury.

The Traditional Economic Team

The Department of Commerce and Labor was created in 1903.  In 1913, that entity was divided into a Department of Commerce and Department of Labor with separate Secretaries.  That served for the first half of the 20th century.

In 1946, the Council of Economic Advisors was established.  In 1953, the Small Business Administration was created.  In 1962, the Office of the US Trade Representative was created.  These, along with the Treasury, Commerce, and Labor Departments were the Presidents’ economic team for the second half of the 20thcentury.

The New Economic Team

In 1993, a new entity was created as we moved toward the 21st century –housed in the White House and more easily responsive to the President. – the National Economic Council.  Because nothing happens without adding experts, the NEC has specialists in agriculture, commerce, financial markets, fiscal policy, healthcare, labor, and social security.  These advisors, along with the Treasury and the new creations of the 20th Century, are the President’s economic team.

Secretary of Commerce

Gina Raimondo

I was born and brought up in Rhode Island.  When someone from Rhode Island gets a big job or some special attention, I get a kick out of it.  Gina Raimondo has been the Governor of Rhode Island since 2015.  She is term limited and would not have been able to run for reelection in 2022.=

The Commerce Department was one of the two Departments that Rick Perry remembered when he proposed abolishing three cabinet departments.  Lyndon Johnson once suggested recombining Commerce and Labor.  Commerce oversees a collection of economics related entities – the patent office, the weather service, the minority business development agency, the Oceanic and atmospheric administration, fisheries, and the census and a variety of other statistical responsibilities.  This is moderately coherent, and there is a representative of the agency in every embassy.  Some of the work is central to our ability to address the climate crisis.

Gina Raimondo’s signature achievement was before she became Governor, when she was Rhode Island’s State Treasurer.  In 2011, the one square mile city of Central Falls, Rhode Island went bankrupt.  Its most glaring problem was its inability to come up with the funds to pay its pensioners.  That bankruptcy appeared to be a portent of the future for other cities and towns and for the State of Rhode Island.  As State Treasurer, Gina Raimondo negotiated a solution for he state.  Cost of living increases for pensioners were paused (not briefly, but projected for a couple of decades).   Current employees were moved into a system that incorporated, but did not rely exclusively on, 401(k)s. Projected returns on investment were reduced to be more realistic.  State funds were invested more aggressively relying, in part, on hedge funds.  The goal was to make the pension system 80% funded.

Rhode Island’s solution is far from perfect.  Truth in Accounting (You may remember the Note about the State of the States.) gives Rhode Island a D grade (in the range of most states).  The D grade is almost certainly an improvement.  Gina Raimondo became a hero to business interests who want the public sector to exercise fiscal responsibility.

Gina Raimondo has faced plenty of criticism since being elected Governor – for a health care computer network system failure, for the Department of Children and Youth Services, and more.  She was popular enough to win reelection in a three-person race and has become genuinely popular for how she dealt with Covid-19.

Gina Raimondo is part of Rhode Island’s large Italian community.  Her father worked for Bulova watches and lost his job when they moved their factories to China.  Like Pennsylvania Senator Patrick Toomey and Presidential Advisor Mike Donilon, she went to LaSalle Academy – Providence’s principal Roman Catholic High School.  From there she went to Harvard where she earned a Rhodes.  She more than completed her program at New College, Oxford, obtaining an MA and a PhD after which she earned a JD from Yale.  She clerked for Kimba Wood (Remember that name in connection with Bill Clinton’s appointments?) and then worked for a venture capitalist.  In 2000, she co-founded a venture capital firm of her own, where she remained for 10 years until she was elected State Treasurer.

 Secretary of Labor

Marty Walsh

 The US Department of Labor oversees occupational safety, wage and hour standards, unemployment insurance, some economic statistics – all intended to promote the well-being of wage earners, job seekers, and retirees.  It addresses safe and clean working conditions and work-related benefits.  Joe Biden’s nominee for Labor Secretary, Martin J. Walsh has been the Mayor of Boston since 2014.  He is a neighbor of his prospective colleague at Commerce.

The Dorchester Reporter, a neighborhood newspaper in the neighborhood where Marty Walsh grew up quoted the President-Elect announcing his nomination for Secretary of Labor:

“Calling him a “good friend” and “stand-up guy,” President-elect Joe Biden last week introduced Mayor Walsh to the nation as his choice to lead the Department of Labor, a position that the 53-year-old Dorchester resident and past union leader enthusiastically accepted during a ceremony in Wilmington, Delaware.

“Marty was born and raised in Dorchester. I know him— tough as nails,” Biden said. “He was diagnosed with cancer and beat it at age 11, joined Laborers Union 223 at age 21, worked in the state Legislature, became a union president and graduated from college at age 42.”

Biden also noted that Walsh is the son of Irish immigrants. “Only downside, they’re not from Mayo, they’re from Galway,” he said in a nod to their shared Irish roots.”

After it was a Yankee city, Boston became an Irish City.  Home to the United States’ first Catholic President, John F. Kennedy (Joe Biden will be our second Catholic President), Boston had its Irish aristocracy including the Kennedys.  Marty Walsh was not from the aristocracy.  Boston became Irish as a result of immigrants who escaped the famine of the late 1840s and its aftermath for the rest of the century.  Marty Walsh’s parents came to the United States from Ireland a hundred years later, in the 1950s.

Newcomers, his family did not have an easy time.  Neither did Marty.  As a child, he had cancer (lymphoma).  He missed second and third grade, repeated fifth grade. After completing high school, he joined the laborer’s union, his father’s union.

Paul Watanabe, a UMass Boston professor and commentator on Boston politics, described Marty Walsh a little differently from the way Joe Biden did.  In a Boston Globe article about Walsh’s nomination, Watanabe was quoted saying:

Watanabe credited Walsh for recruiting a talented pool of leaders for his administration — including some of his competitors from the 2013 race. “I think it was an incredibly effective administration by Marty Walsh… ” Unlike his predecessor, who was known for harboring grudges and ruling with an iron fist, Walsh retains a “nice guy” image and projects empathy.

So… maybe “tough as nails” is not the right description.  Loved by labor might be better.  Marty Walsh was ambitious and tough enough.  Shortly before running for the state legislature, he finally earned a BA, completing his degree in a program for mature degree candidates at Boston College.  He became a pro-labor State Rep in the Massachusetts legislature and president of his union.  He won the multicandidate mayoral primary to get to the two-person final with 18% of the vote (ahead of the second-place candidate who had 17% of the vote).  Vigorous labor support gained him the preliminary victory and the final victory.

Marty Walsh’s priorities as mayor included new housing in this city where housing was very expensive, new office construction throughout the city, not just downtown or at the Seaport, and improving the city schools.  He worked to address what he acknowledged to be systemic racism including addressing police reforms.  He will leave a city that has fulfilled some of his goals including having finally created an independent police watchdog.

Joe Biden has selected a modern labor leader to be Secretary of Labor.  Joe Biden also tapped into one of New England’s ethnic rivalries – complementing the appointment of an Ivy-league educated Italian-American self-made wealthy woman from Providence as Secretary of Commerce with a Boston based Irish-American Labor Secretary who went to work instead of college, who has proved to be a pretty good and popular manager.

Small Business Administration (SBA)

Isabel Guzman

The purpose of the SBA is to strengthen the economy by helping small businesses.  Small business loans have been a staple of the agency’s responsibility. The PPP loans/grants that were part of the Covid-19 response has been partly the SBA’s responsibility.  The SBA also works to ensure that small businesses get a fair share of contracts with the US Government.

Joe Biden turned to California for his SBA Administrator.  Isabel Guzman, who has been responsible for the state of California’s small business agency will join three other Hispanics in Joe Biden’s cabinet – Alejandro Mayorkas, Secretary of Homeland Security; Xavier Becerra, Secretary of Health and Human Services; and  Miguel Cardona, Secretary of Education.  Mayorkas’ family were Cuban Jews.  Xavier Becerra’s family was from Mexico. Miguel Cardona’s family was from Mexico.  Isabel Guzman’s family were landowners from Texas. Her father, who had trained to be a veterinarian at the Historically Black Tuskegee University, moved the family to California in the 1960s to avoid violence in Texas between whites and Hispanics.  Her family had moved before – generations ago — from Mexico to Texas, also to avoid violence.  Her description of her family, as having German, Jewish, and Chinese forebears invites an investigation by Henry Louis Gates, Jr whose television show is called Finding Your Roots.

Isabel Guzman graduated from the Wharton School of the University of Pennsylvania in 1992.  A partner in a highend photography business, she began consulting with businesses at various stages of their development, serving for five years as an advisor to the Founder and Director of the Primerica Bank.  That work attracted national attention and an appointment as Deputy Chief of Staff at the SBA.  During the interregnum, she was associated with the Larta Institute business consultants and was a Co-Founder of a business helping contractors navigate how to obtain government contracts.  Governor Gavin Newsom hired her as the head of California’s Office of the Small Business Advocate. That role,  her experience private sector experience, and her previous time in the Small Business Administration made her the perfect Biden appointment to head the US SBA.

United States Trade Representative

Katherine Tai

The Trade representative negotiates.  Replace NAFTA with a new trade treaty?  That’s the Trade Representative’s job.  Join the entity that was formed without the United States when the Trump administration rejected the Trans Pacific Partnership negotiated by the Obama administration?  That’s the Trade Representative’s job. So is enforcing agreements.  One good way to complete what Barack Obama described as a pivot to Asia is to appoint a Mandarin speaker to this cabinet level position.

Comparing TaI’s approach to the outgoing Trump administration Trade Representative, a former trade representative said  “They both …have a long history of dealing with China’s unfair practices, the most pressing trade issue of our time….Where Katherine’s approach is most likely to differ is on how she uses the WTO system and alliances to pressure China to change behavior.”

Katherine Tai grew up in Washington, DC and went to the Sidwell Friends School.  From there, she went to Yale and then earned a JD from Harvard.  She learned first hand about her parents’ homeland as a two-year Yale-China Fellow at Sun Yat-sen University in Taiwan.

The position she has been nominated for became more visible and more important during the Trump administration as trade served as a primary weapon of foreign policy.  Katherine Tai has been an attorney for the House of Representatives Ways and Means Committee since 2014, serving as Chief Trade Counsel since the start of the Trump administration. She brought to the role a particular Democratic interest – increased focus on labor expectations in trade agreements.   Before her work for the Ways and Means Committee, she was a staff member in the Office of the US Trade Representative, the office she will head under Joe Biden.  Her last three years in that office she served as the Chief counsel for China Enforcement.

Some Thoughts

Joe Biden appears to be prepared to make good use of these 20th century government entities that focus creating American prosperity.  Achieving prosperity post-pandemic will not be easy.  As Joe Biden has already demonstrated – he has, after all, proposed an economic package to deal with the pandemic before we could get used to his having named chiefs for these government entities.  Their job will be to implement programs effectively, not necessarily to think up ideas for the President.  Their job is also to help make the administration’s economics popular.  This group is a mix of ethnicities and experience — northeastern politicians, a California businesswoman, and a DC based trade technician,  They are Italian-American, Irish-American, Latina, and a Taiwanese-American experienced in being tough on China.

Next Steps for

 In February, I will return to the original purpose of these Notes – describing Democratic candidates for election and urging you to provide them with some financial support.  As we move toward the election of 2022, we need to treat the challenges with the same intensity we brought to defeating Donald Trump.

Until February, here are a few organizations worth considering supporting. Begin with the official Democratic organizations.

The Democratic National Committee (DNC).

The DNC is the official organization of the Democratic Party – charged with electing a Democratic President.  Its new head is Jaime Harrison, who ran a powerful, but unsuccessful campaign for the US Senate in South Carolina.  Harrison has a challenge in front of him.  For instance, the website is still focused on electing a Democratic President in 2020.

The Democratic Congressional Campaign Committee (DCCC)

The DCCC is the official arm of the Democrats in the House of Representatives.   Its former chair was Cheri Bustos (IL 17).  She had a difficult time in 2020.  1) During the campaign, she was faced with a revolt from colleagues who insisted she have a more diverse staff.  Bustos replaced several staff members in response.  2) Initially elected to Downstate district in 2012 (She’s from Moline, IL) and having won convincingly with more than 60% of the vote in 2016 and 2018, her 2020 victory was 52-48.  3) After the 2018 election, Democrats had a 235-200 margin. After the 2020 elections, Democrats have a 221-211 margin with three vacant seats.  Few people point to the DCCC as responsible for how poorly Democrats did in the Congressional races, but Bustos resigned.  The new Chair is Sean Patrick Maloney (NY – 18).  The DCCC website says nothing about its leadership.

Democratic Senate Campaign Committee (DSCC)

The DSCC describes itself as the only committee solely committed to electing a Democratic Senate.  Catherine Cortez Masto (NV) replaced Chris Van Hollen (MD) after a tough 2018 Senate election.  Democrats did not flip as many Republican seats as hoped in 2020, but the two run-off victories in Georgia allowed Democrats to gain a 50-50 tie (a majority since there is a Democratic Vice President presiding over the Senate).  That majority replaces what was a 52-48 Republican majority.  The DSCC website asks for donations so Democrats can preserve their majority, but says nothing about its leadership.  We do know, at least, that Majority Leader Chuck Schumer has begun fundraising as he works toward being in a better position in 2022.

Democratic Legislative Campaign Committee (DLCC)

The DLCC describes its job as electing local Democrats, retaking state houses, and ending right-wing gerrymandering.  The DLCC also has to update its website.  It describes how it doubled spending in the 2018 election cycle.  Jennifer Post, formerly of Emily’s List, is their President.  New York’s State Senate Majority Leader Andrea Stewart-Cousins is their Chair.  Their website reports on two January special election victories in Virginia and an upcoming race in South Dakota.

Democratic Governors Association (DGA)

The DGA describes itself as the only organization solely dedicated to electing and supporting Democratic governors.  The DGA has a line of succession.  Phil Murphy of NJ was Chair in 2020.  Michelle Lujan Grisham was Vice Chair in 2020 and is the 2021 Chair.  Roy Cooper of North Carolina is Vice Chair.  He will be Chair in 2022.  Democrats appear to be recovering somewhat from previous devastating losses.  There are now 24 Democratic governors among the 50 states.

National Democratic Redistricting Committee (NDRC)

The Committee’s Chair, Eric Holder, former Attorney General under Barack Obama, has made news in his efforts to fight redistricting.  Their website, however, is still discussing how to win in 2020 so that redistricting in 2021 would reflect a fairer distribution of seats than in the past.  Unfortunately, Democrats did not do well in 2020 state legislative elections and we face hard times in dealing with redistricting for the next decade.

Fair Fight

“We promote fair elections in Georgia and around the country.” This is an organization which achieved success when it counted.  Stacey Abrams, the founder and leader of the organization, has made a national impact.   In part through their efforts, Georgia elected two Democratic Senators in the election cycle that is just completed, creating the Democratic majority in the Senate.  Fair Fight’s website says: “Fair Fight PAC has initiated programs to support voter protection programs at state parties around the country and is engaging in partnerships to support and elect pro voting rights, progressive leaders,

The Lincoln Project

For reasons I don’t understand, the Republicans know how to create campaigns.  They have a clear statement about who they are and what they are doing: “The Lincoln Project is a group of former Republicans who worked to defeat Donald J.Trump’s reelection and will continue to battle Trumpism in America.”  They are planning for the future.  This statement is at the bottom of a news release about the January 6 insurrection.  It includes the name and email address of the organization’s Senior Communication Advisor and the organization’s National Press Secretary.  The  news release refers to the organization’s co-founder, Rick Wilson’s comments about January 6.  Note – they know the 2020 election is over.  Still, I would like them to tell us who their leadership is on their website, not that you can’t Google and find out.