Just after his first election in 2008, Barack Obama seemed on the verge of nominating Penny Pritzker, a Chicago hotel mogul and the finance chairman for his campaign, to be commerce secretary. But Team Obama and Pritzker soon decided her nomination would be too controversial in the middle of a financial crisis caused in large part by banks’ reckless subprime lending. Pritzker’s family had co-owned, and she had helped manage, a failed bank that had aggressively pursued subprime loans and that ultimately had to pay the Federal Deposit Insurance Corporation $460 million to cover losses. In exchange, the FDIC agreed not to pursue the bank’s owners for the collapse.
But four years later, the financial crisis has receded in the public’s memory, the president has won a second term, and Obama can appoint pretty much anyone he wishes without fearing the political consequences. That’s why Pritzker is at the top of his list of candidates to be the next commerce secretary. Far from being opposed to crony capitalism, Obama often surrounds himself with practitioners of it — especially if they’re from back home in Chicago.
No one denies that Pritzker is a skilled businesswoman. She oversees a large chunk of her family’s empire, which includes the Hyatt hotel chain and a credit-data company, and Forbes magazine estimates that she is worth nearly $2 billion. Her acumen has even earned her some Republican support. Former Michigan governor John Engler, who now heads the Business Roundtable, told reporters this week that “she’d be a solid business voice” if Obama nominated her.
Also, Pritzker has been at the forefront of her family’s many philanthropic endeavors. The Pritzker name is attached to a wing of the Art Institute, the medical school at the University of Chicago, and a children’s zoo. The Pritzker Architecture Prize is the most prestigious award in the field.
That’s why family members urged Penny Pritzker not to accept a cabinet post back in 2009. At that time, the biggest blemish on her business career was still fresh: the collapse of Chicago-based Superior Bank. After its aggressive subprime-lending strategy collapsed, Pritzker wrote a letter in May 2001 reassuring bank employees. “Our commitment to subprime lending has never been stronger,” she said. She promised that the family would put more cash in to save the bank, but other family members failed to carry out this plan. Two months later, the bank was closed.
No one doubts that Pritzker will be confirmed if she is nominated – the events at Superior have been in the political rearview mirror for more than a decade. She would likely be one of the more sensible appointments of Obama’s second term. After all, she personally lobbied her friend in the White House to oppose “card check” legislation that would dramatically expand union power. Bloomberg reported that she was very worried the bill would have undermined her ability to keep her Hyatt Hotel empire competitive.
“She’s not nearly as liberal as Obama is,” one Chicago business consultant told me. “She knows what works to create jobs, but she’s also completely loyal to Obama.” Those two parts of her worldview would inevitably be in conflict if she were made commerce secretary. Last year, Bernie Marcus, the founder of Home Depot, criticized Obama for not understanding the economy and surrounding himself with college professors rather than businesspeople, this consultant recalls. “Penny would serve Obama well,” he says “She would pull out spreadsheets and spend hours trying to convince business leaders that administration policies will work. The problem is that no matter how good a salesman she is, putting lipstick on a pig still leaves it a pig.”
If Obama nominates Pritzker, he will have one of the best spinners possible for his policies. He needs her more than ever, because his policies have not worked over the past four years and they show little sign of doing better over the next four. A new Fox poll released today shows that the public shares the same fear. By 52 to 40 percent, surveyed voters say they believe the economy is going to get worse before it gets better.
— John Fund is a national-affairs columnist for NRO.