Timothy Geithner vs. Mark Sanford, Meg Whitman and Carly Fiorina — Arnold’s Last chance

The Zen people say that your first decision will plant the paradigm for all future decisions. After great expectations, President Obama’s hiring Rahm Emanuel as chief of staff was an initial disappointment. Then hiring Hillary Rodham Clinton as secretary of State (whose husband — he of the 50 gold watches — set the high-water mark for political corruption in the modern age when he notoriously took a million-dollar bribe to let a lobbyist for a foreign government out of jail) was enough to gag a horse.

That the real work seems to be headed over to the National Security Council to the very competent Samantha Power of Harvard and Gen. James L. Jones brings a sigh of relief, but this is not how to run foreign policy; this is how you stealthily manage a disturbed auntie at an important family reunion. And when the Dow Jones drops 350 points in direct response to new Secretary of the Treasury Timothy Geithner’s financial bailout plan, it is time to start getting worried.

Maybe it is that deer-in-the-headlights thing he has whenever a camera points in his direction. Maybe the time is finally up for tax cheats and the generalized atmosphere of corruption and decadence that bled into the Democratic Party with the Clintons. Maybe the time has passed for putting the politically favored up front and the competent behind to run things. (There is a name for this model and tradition: monarchy.) Maybe it is less than heartening that the secretary of the Treasury uses TurboTax to (not) pay his taxes.

But this is no longer about the vanities and illusions of internecine American sociology. The world economy is endangered by these early missteps, and if they continue it could enter freefall. And as historian Niall Ferguson points out, when the world economy is endangered at the base level, great wars often follow in the power struggle. President Obama should do just what Al Gore did when he saw his campaign for president going down the drain: Hire that other Chicagoan, Bill Daley, to try and save it.

I had the good luck to see another true beginning a few months back, one that is increasingly more probable to be the countervailing movement to the Obama moment. I was able to hear the voice of one all alone, speaking in opposition to the bailouts and bearing the contempt of the old bulls on the House Ways and Means Committee for having the audacity to come before them and ask them to please stop sending money to his state. Mark Sanford (R), governor of South Carolina, has made a few friends since: Rick Perry (R), governor of Texas; Sarah Palin (R), governor of Alaska; Haley Barbour (R), governor of Mississippi; and Bobby Jindal (R), governor of Louisiana.

And he is about to make some more friends.

Sanford and Mitt Romney will headline the California Republican Party Spring Convention from Feb. 20 to 22. It could well be a turning-point event, as it will address the economic damage to the country and the political paralysis where it is at its worst and where it has persisted the longest, in Sacramento. Also, two new voices will begin to enter the mainstream of politics, and this could be a jumping-off point for an actual movement: Meg Whitman, the eBay executive who has announced that she will run for governor of California, and Carly Fiorina, former CEO of Hewlett-Packard, who is said to be considering a run for Senate in California.

“We’re moving precipitously close to what I would call a savior-based economy,” Sanford declared recently in a CNN interview. “A savior-based economy sort is the definition of what you see in Russia or Venezuela or Zimbabwe or places like that where it matters not how good your product is to the consumer but what your political connection is to those in power.”

And if you think about the power that has been granted to the Fed or the Treasury, he said, it has savior-like qualities.

“Everybody knows that we’re in an economic slowdown. But the consideration now is, if I can just get my word, if I can be the plaintiff to the right person in Washington, D.C., I can get these things fixed.”

That is quite different from a market-based economy, he said, where some rise and some fall but there are consequences to making stupid decisions.

New beginnings need new faces, and the Republican meeting will provide some. While Obama has brought a disappointing return to the old school of political insiders, the Republicans could be about to begin again with Whitman, Fiorina and others new to the national scene like Sanford, Jindal and Perry, who was the first to sign on with Sanford’s way of thinking and co-authored an op-ed with him in opposition to the bailouts for The Wall Street Journal.

When Sanford first spoke up to ask the federales to keep their money, it was a mere several hundred billion they were talking about.

But as Ken Rogoff, the Harvard economist and regular commentator on Jim Lehrer’s “The News Hour” said last night, this will really open up to many, many trillions of dollars.

We know that. The Obama vision of “change,” with its reinforcing traditions and associated supporting voices in the press, is quickly revealing itself to be a textbook model of the kind of calcified institutional thinking that kills entrepreneurial spirit and new ideas. So it will be interesting to hear what these new people come up with in Sacramento.

The American imagination will start again in California and in the West or it won’t start at all. No doubt Gov. Arnold Schwarzenegger (R) will be there. He threatens today to fire 10,000 state employees if legislators do not approve a deal to help close the state’s projected $42 billion budget deficit. And he must. This is Arnold’s last chance: his last chance to ride the white horse.

Visit Mr. Quigley’s website at http://quigleyblog.blogspot.com.