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Whether Biden was Obama's best choice for VP depends on what the VP slot is supposed to accomplish. Different presidential candidates have different views on this. I infer from Obama's decision not to tap Hillary that he intends to use the VP as an adviser and confidante, in addition to choosing someone who he thinks will be a credible president if something happens. Obama sees Biden as filling both roles, and I find that to be a plausible decision. While Hillary certainly would be a credible president, my guess is that Obama really can't abide her and doesn't feel he can run the presidency the way he would want if she was around, especially since she'd be trailing her attention-hog husband behind her. Biden wouldn't be nearly as distracting or annoying. This is just my read of the situation - I have no "in" to the campaign.
With a different set of factors dominating the decision, Biden arguably is not as good a choice. It's clear, for example, that McCain didn't use those factors - he thinks he'll last out his term and that Palin will gain seasoning as VP for a future run. He chose her, IMHO, because he likes her political profile and charisma, and he thinks she can help him win the election. The job itself isn't worth a bucket of warm piss, as John Nance Garner said (the first VP, John Adams, had similar choice words about the Vice Presidency), so he made a political choice. Biden brings Delaware, but does he bring Catholics? Is his working class cred really what it's cracked up to be? There has been lots of talk about this, and maybe it's just that I have seen Biden in action for 30 years now, but I don't see him as a plebeian at all - even though he's originally from Scranton. So I just cant' see BHO having chosen Biden from a politically strategic point of view. Then again, what do I know, this is all speculation and subjective impression-mongering.
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