Joe Biden’s Cabinet Is on Loan From Corporate America

David Dayen

As Joe Biden staffs his incoming administration, battle lines have been drawn between progressives and centrists. But the real winner has been corporate America, whose lobbyists and consultants have been getting the bulk of the plum jobs.

Joe Biden signs required documents for receiving the Democratic nomination for president on August 14, 2020 in Wilmington, Delaware. (Drew Angerer / Getty)

Interview by
Meagan Day

Between our frustration at Rahm Emmanuel’s continued presence in American politics and our alarm over the growing influence of BlackRock, it’s hard to find the energy to keep up with all of Joe Biden’s picks to staff his administration. We at Jacobin have admired and relied on the American Prospect’s reporting on the transition, collected in a regularly updated section of their website called Cabinet Watch.

Jacobin’s Meagan Day spoke to David Dayen, executive editor of the American Prospect, about who’s been tapped so far, the principles that appear to be guiding the transition team, and the Left’s influence and obstacles.

Meagan Day

How far along is Biden in the process of assembling an administration?

David Dayen

I don’t think we’re that far along. We’ve seen one group of national security picks, one group of economic picks, and then on Tuesday, there will be a group of health care–related selections. But that leaves a pretty wide range of positions that are still unfilled, including important ones in the Department of Labor, Department of Agriculture, Department of Housing and Urban Development, and two of the big four: Department of Defense and Department of Justice.

And then, of course, there are hundreds of lower-level positions that can turn out to be just as important as the top-line cabinet secretary. So the jury’s still out on the full composition of Biden’s team.

Meagan Day

You mentioned the “big four” cabinet positions. What are they?

David Dayen

The big four would be Treasury, Justice, Defense, and State. The Treasury secretary pick ended up being Janet Yellen, and at State, we have Antony Blinken.

I think the common thread for the picks we do have is experience. Biden seems to want to go with people who have a lot of expertise and who he feels comfortable can do the job. Blinken worked for Biden for about twenty years, so Biden is comfortable with him, and Yellen is the first person to have been Fed chair, the chair of the Council of Economic Advisers, and now the Treasury secretary, so she’s someone who has unparalleled experience in that realm.

Meagan Day

To what extent is the Biden administration shaping up to have the same private-to-public-sector revolving-door problem as previous administrations?

David Dayen

If experience is your watchword, then previous Democratic administrations are going to be where you pluck your team from — especially if, as it appears right now, the Biden team doesn’t want to choose anybody who’s in Congress. They may have an okay reason for that, because the House and Senate have very tight margins, and you’d have to do special elections, and I guess the specter of Martha Coakley is looming over their heads. But that’s really robbing the transition of any talent that’s homegrown from being public servants.

So, if you want a lot of experience but nobody that’s in Congress right now, you’re left with retreads from the Obama and Clinton administrations. And frequently, what we saw with those members is that they came from and spun back out into the private sector.

UK headquarters of BlackRock in London, 2017. (Jack Taylor / Getty Images)

An example this time is that two members of Biden’s economic team who have been named were at BlackRock for some period of time. BlackRock is the world’s largest asset management company, with $7 trillion under management. It has its tentacles in many sections of the financial industry and Wall Street, and it has a history of moving officials back and forth between BlackRock and governments, not just in the United States but in Canada and Mexico and all over the place.

BlackRock seeks to improve its position by having officials spin out into government and then capitalizing on the knowledge or lack of regulatory fervor that results from that. So that’s definitely a big fear with the Biden administration.

Meagan Day

Something similar is happening in the negotiations about who will lead the Department of Defense. What’s going on there?

[Note: In the hours after this conversation, on Monday, December 7, it was announced that Biden would choose Lloyd Austin to head up the Department of Defense.]

David Dayen

A few months before the election, Jonathan Guyer, our managing editor at the American Prospect, wrote this piece that really broke the story about how there was almost a shadow government in waiting at this strategic consultant firm called WestExec Advisors.

And the two principals of that organization were Antony Blinken and Michèle Flournoy, who everybody thought was going to be Defense secretary. Avril Haines, who’s nominated to be the the director of national intelligence, was also at WestExec. Meanwhile Lloyd Austin, who might be the replacement for Michèle Flournoy, is a partner at Pine Island Capital Partners, a private equity company that partners with WestExec.

So there’s a web here, and it really shows how the defense establishment works. When these people aren’t in office, they go into these consultancies where they work for corporate clients, basically trading on their knowledge of government and their contacts within it. And then they spin right back into the government.

Neera Tanden in 2019. (Gage Skidmore / Flickr)

Jonathan Guyer also wrote a follow-up story about a contract WestExec had with its landlords. It rents a place like three blocks from the White House, and in the lease, it says WestExec is allowed to break the lease without any penalty if their principals go into government in the next administration. So it’s really a way station for officials to wait out a Republican administration, then come back during a Democratic one. And this shows the conflicted, pay-to-play nature of the whole national security space.

What’s interesting is that Flournoy got nixed over her ties to WestExec and the defense establishment, so they put up two other options, both of whom are black: Jeh Johnson, who used to be Homeland Security secretary and was on the board of Lockheed Martin, and Lloyd Austin, who is a partner at Pine Island Capital Partners and sits on the board of Raytheon. So there’s a distinction without a difference.

Something that we’ve seen throughout is a focus on diversity in terms of gender and race, which doesn’t extend to experience. In other words, there are a lot of people who’ve gone through the revolving door and worked for private industry before coming back into government, but relatively few people in the academic sphere or coming out of think tanks or public service organizations. And diversity in race and gender is taking precedence in this transition.

Meagan Day

I think the Left today, more than at any time in recent decades, is really skeptical of this idea that you can substitute race and gender representation for substantive political commitments. So, if it isn’t the Left demanding a demographically diverse administration, which I don’t think it is, then where is the demand coming from?

David Dayen

I think it’s coming pretty broadly from all segments of the party, including the party mainstream. And I think it’s something of a cover story. If you stump for someone who is going to become the first African-American head of the Council of Economic Advisers, or the first Native American secretary of the Interior, then you can put that forward instead of putting forward a really progressive choice.

Interior is a really interesting example. So Deb Haaland, who is a Native American woman and a member of Congress, is fairly progressive. She has been touted as a potential Interior secretary, but that runs into this problem where they don’t want to pick anybody from the House and Senate. So they found somebody else who was also Native American, an enrolled member of the Taos Pueblo tribe named Michael Connor. He was a deputy in Interior back in the day, I think in the Obama administration. But he’s now a partner at WilmerHale, which is a law firm that represents corporate clients like mining companies.

It’s just not a good profile for Interior. But now, if they nominate him, they can say, “Look at the groundbreaking first native Interior secretary. How could you speak against that?” And so it becomes sort of a magic protection shield when people are trying to scrutinize these records. I think it’s become weaponized. I think the push for diversity has become more important than policies or ideas or beliefs, and I think that’s really dangerous.

Meagan Day

What has Biden done throughout this process to appease the Left, if anything?

David Dayen

I think Biden wants to be in the center of the party. He wants to be conciliator; he wants to try to please everybody. And sometimes that’s impossible, but I think what progressive pressure has done so far is it’s prevented some of the worst people from joining the administration.

There are a few different examples. Very early, Larry Summers said that he’s not going to join because there was a lot of critical scrutiny of him. Likewise Bruce Reed, who was tapped to become the head of the Office of Management and Budget, was the executive director of the Simpson-Bowles commission and is very linked to austerity and deficit hawkery. He did not get the job. Of course, Neera Tanden did.

The most recent example is at Health and Human Services (HHS). The governor of Rhode Island, Gina Raimondo, is a pretty aggressive centrist who has cut Medicaid in Rhode Island and has a middling record on choice, which is almost unthinkable for Health and Human Services secretary under a Democrat. She was all but announced as the HHS secretary. And then we ran a story about it, the Daily Poster, which is affiliated with Jacobin, ran a story about it, and she was getting all this scrutiny, and then suddenly she took herself out of the running, and they had to scramble around.

Gina Raimondo, governor of Rhode Island, at the Fortune Most Powerful Women Summit on October 13, 2015, in Washington, DC. (Stuart Isett / flickr)

This might’ve been a situation where the push for racial diversity worked to the advantage of progressives, because they ended up going with Xavier Becerra, the attorney general of California, who has been an advocate of Medicare for All over the years. Here in California, most recently, Becerra pursued a lawsuit against Sutter Health, which is a big hospital network in Northern California that was radically overcharging patients and forcing insurance companies to essentially blanket cover all of its different outlets so that it could raise prices with impunity.

Becerra is someone who recently has shown concern about runaway hospital prices. He has been a leader in trying to lower prescription drug costs, and he has a history of advocacy both for reproductive rights and for Medicare for All. So I think he’s one that you can look to and say that progressives made a real difference there.

Of course, elections have consequences. This is certainly not the cabinet that Bernie Sanders would have put together. It’s not the cabinet that Elizabeth Warren would have put together. It’s the cabinet that Joe Biden would put together, and it’s not like we had a lot of mystery about who Joe Biden was. The thinking was that progressives could push from the outside and try to mitigate the damage, and I think that’s been successful to an extent, but it was never going to be the case that you were going to get a fantastically progressive cabinet out of Joe Biden.

And so the fights will have to continue, and beyond just the various top-line cabinet positions, extending to their undersecretaries. We reported on the example of the US Trade Representative, who negotiates trade agreements and sets trade policy. It looks like they’re going to put a fairly progressive person in that position, Katherine Tai, who is generally supported by labor.

And that seems pretty good, but there are two deputies being put below her who went right out of the Obama administration to work for Amazon as lobbyists, one of them being a registered lobbyist. It seems like they’re being put there to almost undermine Katherine Tai, who was just a Capitol Hill staffer and might not be ready for the bureaucratic infighting that happens in an administrative cabinet.

So the concern is that while we all look at the top-line names and the people that we’re familiar with and try to get Rahm Emanuel out of the administration or whatever, some really bad things may be happening in some lower-level cabinet positions that could undermine the effectiveness even if there is a progressive choice.