2008-08-15_buy_american_obama.jpgChris Hayes writes about the battle lines growing in the Obama administration between the center-right neoliberals, led by Larry Summers, and the labor-friendly liberals like Melody Barnes.  Summers, he says, is winning handily:

Summers has already come to dominate the White House economic policy shop. One person close to Obama’s economic team told me that on economic policy, "it’s looking like it’s Larry’s show." This leaves a disconcerting vacuum in the White House for a labor-liberal voice equal in stature and clout.

He hopes that Joe Biden will step into breech and become a counterbalancing force to the  free-marketeer Summers.  Larry is a strong opponent to nationlizing the banks out of philosophical opposition to "big government," dismissing it as "Putinesque," but has no apparent problem with overpaying banks for toxic assets and foisting them off on taxpayers.

It looks like Biden is losing Round 1 to Summers at least within the administration over the issue of "Buy American" provisions in the stimulus bill, however.   Biden spoke out in support of the provisions, joining the AFL-CIO and other unions.  But despite the fact that Obama promised to support such legislation during the campaign and hit John McCain hard for opposing it, he now opposes it:

President Obama has come out against a Buy American provision that would require stimulus-funded projects to use U.S.-made materials.

"I think that would be a mistake right now," Obama said on ABC News on Tuesday. "That is a potential source of trade wars that we can’t afford at a time when trade is sinking all across the globe."

The president added that the United States "can’t send a protectionist message."

Those sentiments echoed Summers, who thought that such restrictions constituted "new protectionism."  The Chamber of Commerce and other corporate lobbying groups also opposes them.   The Senate voted down an attempt by John McCain to get the "Buy America" language stripped from the bill on Wednesday, but it is believed the subject will resurface before the final vote.

Summers may ultimately win this round, but he’s got a problem in the long-haul:  his personality. Gosh darn it, people just don’t like Larry.  And there’s no Bob Rubin to bail him out any more.