Hillary Clinton has finally agreed to become President-elect Barack Obama’s Secretary of State and spearhead efforts to restore America’s credibility in the world.
Once confirmed, Mrs Clinton will be the highest-ranking cabinet official in the next administration and she is expected to become a powerful diplomatic force, dealing with some of the international community’s most intractable problems, including terrorism and climate change.
News of her readiness to accept the job came as the Obama transition team said that the new Treasury Secretary will be Timothy Geithner, a decision that sent stocks soaring. He is highly respected and will replace Hank Paulson. This transition is the most sensitive because of the magnitude of the credit crisis, and markets have become increasingly concerned that there is a power vacuum at the heart of economic policy, just when new initiatives are needed to stop the world sliding into a deep recession.
The Dow Jones index jumped 6.5 per cent on the news that Mr Obama was ready to announce his economic team next week. New Mexico’s Governor, Bill Richardson, is to be named Commerce Secretary. Mr Obama passed over Larry Summers, a former Treasury secretary under Bill Clinton, whose subsequent tenure as president of Harvard University ended in controversy over remarks about women’s aptitude for the sciences. However, Mr Summers will be an economic adviser to the White House and was tipped last night as a future chairman of the Federal Reserve, the US central bank.
Expectations are already building that a combination of Mrs Clinton’s experience and the force of her personality could achieve what her husband failed to do and lay the foundations for a Middle East peace settlement. She has shown herself to be extremely hawkish on the subject of Iran’s nuclear ambitions, and on the campaign trail for the presidency once threatened the regime with nuclear annihilation.
Aside from that heat-of-the-campaign sabre rattling, Mrs Clinton and the globe-trotting Mr Clinton are hugely admired in the world and a “Clinton dividend” could see some of the sheen being restored to America’s reputation. However, confirmation of Mrs Clinton’s role is not expected until after Thanksgiving, on Thursday.
But yesterday afternoon, after a week of public dithering and agonising, two of her confidants informed The New York Times that she has decided to give up her Senate seat and accept the job offer. She came to her decision after fresh talks with Mr Obama about the role he had in mind for her and plans to reshape US foreign policy. The bittersweet decision means she has effectively forsaken her high-profile career in politics and is ruling out any prospect of anther run for the presidency in four or even eight years.
Mr Obama’s office first disclosed that her appointment was “on track”. This came amid a week-long veritable soap opera conducted on the front pages of tabloids and sober newspapers alike. Finally yesterday the New York Daily News screamed from its front page: “Hill’s the One.” “She’s ready,” whispered one of Mrs Clinton’s confidants to The New York Times political blog, final confirmation that the deal was sealed.
Mrs Clinton’s first meeting in Chicago with Mr Obama last week “was so general” that she was unconvinced, it appears. Their follow-up talk involved the two “just getting comfortable” with the idea of working together rather than any attempt to wrest concessions from Mr Obama. The clout that Mrs Clinton will bring to the thankless job of being America’s top diplomat should be formidable, especially as Mr Obama is expected to move quickly in the early days of his administration to capitalise on his honeymoon period. The President-elect has already sent signals that rather than retrench in the face of a global economic turndown, he wants to take advantage of the period of international turmoil to try and make progress on many fronts.
Hopes for progress in the Middle East also rest on the appointment of Rahm Emanuel as Mr Obama’s Chief of Staff. Mrs Clinton’s background as a senator from New York and Mr Emanuel’s ties to the US Israel lobby would provide Mr Obama with a formidable team with which to bring pressure to bear on Israel and the Palestinians to achieve an acceptable settlement, the theory goes. Mr Clinton’s experience in bringing Israelis and Palestinians to the brink of a peace agreement at Camp David in 2000 should also prove invaluable. “You never want a serious crisis to go to waste,” Mr Emanuel told business leaders this week. “Things that we had postponed for too long ? are now immediate and must be dealt with. This crisis provides the opportunity for us to do things that you could not do before.” Global economic turmoil was foremost on his mind, but the lesson is also true for foreign policy. The fallout from the 1973 Arab-Israeli war gave President Jimmy Carter the opportunity to negotiate the historic Camp David peace accords between Egypt and Israel.
A formal offer of the job to Mrs Clinton depended on an ethics investigation by the Obama team into the former president’s activities. He apparently passed with flying colours, after making some concessions. Mr Clinton promised to come clean about future donors to his charities and to notify the State Department in advance about his foreign speeches. This is to avoid embarrassing the Obama administration with freelance diplomatic initiatives and to prevent future conflicts of interests in his $10m-a-year public speaking career.
Mrs Clinton’s future ties to the Obama administration mean that even if it is an abject failure, she will be in no position to challenge him in four or even eight years’ time. Friends of Mr Clinton whispered that it was a Machiavellian plot to put an end finally to hopes of a Clinton political dynasty. Others pointed to fireworks to come. With some understatement, one foreign policy analyst said the “contrast between Obama and Clinton could lead to some spirited policy debates in the White House”.
Mr Obama wants to emulate Abraham Lincoln by appointing a “team of rivals” to his cabinet. Putting Bill Richardson and Hillary Clinton around the same table seems certain to cause fireworks; his decision to throw his lot in with Mr Obama in the primary campaign was viewed as a betrayal by the Clintons, with whom he had been linked for 20 years and served as energy secretary and UN ambassador.
The money man: Timothy Geithner
For all the freshness of face that the 47-year-old brings to the US Treasury, it was the continuity that Geithner represents that cheered markets yesterday. A workaholic known as a behind-the-scenes conciliator, he has been part of the informal crisis management team dealing – often imperfectly – with the credit crunch. As president of the New York branch of the Federal Reserve, he is one of Wall Street’s chief regulators, involved in bailing out Bear Stearns, and the more important decision not to bail out Lehman. His warnings on derivatives markets went unheeded, but have earned him a name as a heavyweight thinker. He also brings an international perspective as he grew up in part in Asia and studied international economics.