If you read that and think that I hate Hilary Clinton, you'd be wrong. I happen to think Hilary is in a good position to be a very powerful politician and I think she could do a very good job. But she'll be giving all of that up if she takes any position in the Cabinet, especially Secretary of State as is being mentioned.
Hilary ran for President, we know she's got credentials, but she has something else, a good track record in the Senate. Ted Kennedy ran for President, lost his bid for the party nomination, and settled in to a very powerful position in the Senate. His role was that of a mover and shaker, someone who could be passionate about certain, select issues and push them.
The same could happen to Hilary. She's passionate about health care. If Obama is serious about health care reform, he'll need someone like Hilary to champion him in Congress. And that act by Hilary would be far more powerful than having her in his Cabinet.
Not only that, once Obama leaves the Presidency, she can server as a valuable watchdog to keep the reforms from being whittled away. The President has power but the powerful in Washington sit in the Senate and House.