Why did Obama not see these problems coming?

Barack Obama is certainly not the first president to get taken down a couple of rungs by nominees who get shipwrecked in their confirmation hearings. What's been surprising in the last week is how a politician as smart as the new president could have failed to sense imminent peril.

Since America's political system is one of institutionalised bribery - both overt (the legal, political 'donation') and covert (the bag of cash) - and has a tax code with 50,000 pages of fine print, it stands to reason that of any 10 nominees enduring scrutiny by White House investigators, by the staff of the Senate Finance Committee plus the occasional journalist, probably nine will have some sort of explaining to do.

Throw in infidelity and kindred offences outlined in the opening books of the Bible, and probably only Rep Ron Paul would survive. Part of the problem is that most people reasonably think Obama, who raised more money for his presidential run than anyone in history, is at the personal level an honest fellow. The last president who could be put safely in that category was Jimmy Carter.

Was health reform’s best advocate a senator who got rich at a law firm?

So when Obama puts up and then stands by nominees who are obviously severely compromised by corporate ties, odious enrichment or serious problems with the Internal Revenue Service, they're taken aback by such permissiveness in one so insistently high-minded in tone and so quick to announce tough new ethical guidelines for members of his administration.

On the one hand we have President Obama prohibiting individuals from working for government agencies they have lobbied in the past two years; on the other we have him nominating a defence industry lobbyist, William Lynn, to be the number two man at the Pentagon, thus possibly the next Secretary of Defence. Lynn got a waiver.

What's amazing in the case of Tom Daschle, nominated to be Obama's health tsar, is the fact that neither the president, nor his staff, nor Daschle's former colleagues in Congress nor the whole of the Washington press corps could see that his nomination was inherently preposterous, long before Daschle's tax problems surfaced.

Was health reform's best advocate to be a former US senator who managed to make $5.3m in two years trading on his former position as a rainmaker for a powerful law firm, hauling in consultancy and speaker fees from inmates of the self-same Augean stables he was charged, as Health Secretary-designate, with cleaning up?  Was he going to get a waiver too, like Lynn?

It's not entirely clear why Daschle finally threw in the towel. The New York Times editorialised against him, but that's not an automatic death sentence. His former senatorial colleagues blubbered with dismay when he quit, so they weren't going to vote against him. More likely, Daschle or the White House felt another forkful of manure was about to drop out of his filing cabinet. 

But the net effect of his withdrawal, and that - also for tax problems - of Nancy Killefer, Obama's nominee for White House budgetary watchdog, was to rekindle public indignation about the confirmation as Treasury Secretary of Tim Geithner.

Geithner only owes his position to the fact that the White House felt that the infinitely more capable Larry Summers mightn't survive nomination hearings, if put forward again for the job he held in Clinton-time. At issue was Summers's role as Harvard's president in the scandal-ridden collapse of a Harvard advisory programme in Russia, for which the US government levied a fine of $31m on the university and other parties.

As with Daschle, no one seems to have been perturbed by Geithner's CV. Geithner had worked for the IMF. No problem. You can toil diligently for an outfit that is properly execrated as  the Waffen-SS of international financial institutions and no one raises a bleat. But stiff Uncle Sam by not paying Social Security taxes for the maid who cleaned your quarters in the SS compound and you're in trouble!

After Bush’s obduracy, it’s refreshing to have a president admit to mistakes

Geithner's an obvious lightweight. As Treasury Secretary he's in overall charge of the IRS and since tax season is gathering on its haunches to pounce, tax filers probably feel encouraged that an admitted scofflaw is in charge of the chicken coop. Anything to lower the moral tone, particularly when you're in anxious conclave with your accountant about what precisely you think you can get away with.

But Obama isn't in the business of promoting moral relativism, so how come Geithner survived, when Daschle and Killefer, not to mention Bill Richardson (who withdrew as nominee for Commerce Secretary over charges of favouritism in contract awards), all went down?

The populist answer you hear often enough is, "What the bankers want, the bankers get," and they wanted Geithner. His designated role is to be prime exponent for their cause, which is continued bail-outs at the tax-payers' expense.

Geithner and his boss, President Obama, are all for the ongoing bail-out of the banks, and - it seems - for the so-called 'aggregator bank' or 'bad bank' that will relieve at face value the bankers of their worthless assets. There’s talk of another $1tr or so for bank rescue: Senator Jim Tester of Montana said this week he thinks the bank bail-out tab will rise to $11tr.

When Daschle withdrew, Obama summoned all the TV networks, telling NBC: "I've got to own up to my mistake which is that ultimately it's important for this administration to send a message that there aren't two sets of rules. You know, one for prominent people and one for ordinary folks who have to pay their taxes."

After the lunatic obduracy of Bush Jr that he'd never made a mistake, it was refreshing to hear a president admit equably he'd screwed up, though he probably shouldn't do it again for at least a year.

But people aren't so stupid as not to realise that what nomination hearings mostly show is that there are indeed two sets of rules and Geithner's successful confirmation and the ongoing bank bail-outs confirm they are securely in place, however manifestly honest a fellow the new occupant of the White House may be. ·