The vice-presidential selection is all about perception. Perception that the candidate will be fair to both sides of the conservative-liberal fence. The North-South fence. In this case, the male-female fence. The black-white fence. Barack Obama also might want to try to neutralize John McCain's strengths by, for instance, picking someone with military experience.
The vice president doesn't really have any constitutional responsibilities while the president is alive other than being a tie-breaker in the Senate. A robot can do that (since the vice president will always vote what the president wants him or her to vote).
What's become important, though, is not only the selection but the process. For instance, Obama is trying to align himself with the Camelot image created by JFK's presidency in the '60s, so he named Caroline Kennedy to the committee to help him select a vice president. She has zero political experience, and now she's helping to hand-pick the person who is a heartbeat away from the presidency.
Meanwhile, James Johnson (former chairman of Fannie Mae (FNM)), who had a bit more experience, was too linked to Fannie Mae and Freddie Mac (FRE) and had to bow out to avoid Obama's being linked to the corporate scandals occurring throughout subprime America.
With all this in mind, here's what we think are the odds for some potential vice-president nominees.
Hillary Clinton is a no-go, but Obama has to consider her. In the end, though, he's not interested in sharing power, and I don't think H. Clinton (or B. Clinton) wants to take a step back and just attend funerals for five years.
Note: Obama has stated he's looking for a real partner and not just someone to attend funerals. But every candidate says that. (Ronald Reagan said it, and eight years later we have a nice photo album of George H.W. Bush attending the funerals of every foreign leader who had died in those eight years.)
The last time a presidential candidate picked an "equal" was probably 1960 when John F. Kennedy picked Lyndon Johnson, who was the closest contender for the Democratic nomination in 1960. Reagan flirted with the idea of having former President Gerald Ford as his vice in 1980, but they couldn't come to terms on the power-sharing (Ford wanted total foreign relations responsibility).
Caroline Kennedy probably has strong visceral memories of the tension in the Kennedy-Johnson administration between the two (and, later, the tension between Robert Kennedy and Johnson) and will certainly veto this idea, particularly given the more recent tension between the Clintons and the Kennedys when Ted Kennedy came out early to support Obama.
The challenge is that Obama has to reject her without offending the 50% of the Democratic party that supported her. Not easy given the ongoing tension even after she supported him.
He could pick another woman and hence deal with all the charges of electoral sexism that have been floating around the Democratic party (ironically), but then Hillary Clinton's supporters will wonder why he picked a woman but not their woman.
Possible female candidates include Janet Napolitano, the governor of McCain's home state of Arizona. She's extremely popular and could prove embarrassing to McCain if his home state becomes a battleground. But it's unlikely that Napolitano would deliver her home state even if the battleground situation occurs. And if you can't deliver your home state, you probably can't be picked to be VP. She's also hardcare on immigration, and Obama might be afraid to alienate Hispanic voters, particularly in Texas and Florida.
Kathleen Sebelius is the popular governor of Kansas who's known to work well with members of both parties in her state. (Her lieutenant governor is a former Republican who switched parties to be assume that role.) A governor also adds executive experience to the ticket. (Quick: Name the last time a president went from being senator to being president -- it's only happened once in the past 100 years.)
However, I still think everyone will ask, "Why not Clinton?" and I'm not sure if a governor from Kansas adds the geographic balance that Obama needs. However, Sebelius has been considered a front-runner by the media.
An intriguing possibility is Ann Venneman, the very Republican former secretary of agriculture under George W. Bush. Obama's campaign has leaked that he is considering her. Obama mollifies Republicans and deals with the female issue at the same time. However, zero electoral experience makes Venneman an unknown as to how she'll deal with being thrust on the national stage. Given Obama's own lack of national political experience, it's unlikely he'll make this choice. The fact that he is thinking about her, though, sends a signal to Republicans that he's open to both sides of the table.
In part II tomorrow, we will outline other avenues Obama might consider and what effect, if any, his decision could have on the market.
A note from James Altucher:
Every weekend I send an email to Jim Cramer and several hedge fund managers about the most interesting portfolios posted on Stockpickr that week. Usually those portfolios not only list stocks according to a theme but also offer significant analysis as to why the stocks are cheap.
Here are some examples:
Stocks related to drilling the Marcellus Shale
Microcaps trading for less than tangible book
Stocks that do well after Hurricanes
Here's the challenge: Build a portfolio at Stockpickr.com with great analysis, and send me the link. Each great portfolio (with analysis) will get posted on TheStreet.com with your byline (as a "Stockpickr Guest Columnist") and will be included in my email I send to Jim and the other
hedge fund managers on my list.
At the time of publication, James Altucher had no positions in stocks mentioned.
Published July 29, 2008
