Asked why he was naming some of his rivals to top administration jobs, President Lyndon B. Johnson said it best: "I'd rather have them inside the tent pissing out than outside pissing in."

President Obama seems to echo Johnson's management style in his handling of Bill and Hillary Clinton. By bringing them into his inner circle, he has marginalized them both and sharply reduced their freedom of action.

It may appear odd to describe a secretary of state as marginalized, but Obama has surrounded Hillary with his people and carved up her jurisdiction geographically. Former Sen. George Mitchell is in charge of Arab-Israeli relations. Dennis Ross has Iran. Former U.N. Ambassador Dick Holbrooke has Pakistan and Afghanistan. And Hillary has to share her foreign policy role on the National Security Council (NSC) with Vice President Biden, U.N. Ambassador Susan Rice, CIA chief Leon Panetta and NSC staffer Samantha Powers (who once called Hillary a "monster").

With peers who are competitors and subordinates who can deal directly with the president, Hillary is reduced to announcing foreign aid packages for Pakistan while Holbrooke does the heavy lifting.

Part of Hillary's problem is the institutional shrinking of the State Department. During the Bush years, while war raged, the Defense Department became more relevant to the conduct of foreign policy. And, under Obama, the financial crisis has propelled the Treasury into the forefront. State, with its emphasis on traditional diplomacy, has been forced to take a back seat. Even though Obama appointed Hillary, he clearly has not been willing to make her a co-president and confines her to the diminished role of her department.

For his part, Bill Clinton has been asked to be a special envoy to Haiti. Yes, Haiti. Obama's predecessor asked the former president to orchestrate the response to the Asian tsunami and then to Hurricane Katrina. With Obama, he gets Haiti.

Meanwhile, both Clintons are effectively muzzled and cannot criticize Obama even as he reverses President Clinton's free-market proclivities and budget-balancing discipline. Hillary, the supposed friend of Israel, must sit by quietly and watch Iran get the bomb while trying all the while to stop Israel from preventing it.

Bill can't even make money. Denied the ability to accept speeches from foreign governments or their organs and fenced out of continuing his profitable relationship with the emir of Dubai, he and his wife must accept the loss of the $13 million they spent on her campaign and sit by passively, unable to earn the money to replace it.

Just as Abraham Lincoln buried his rivals William Seward, Salmon P. Chase and Edwin Stanton in the Cabinet and then on the Supreme Court, and Woodrow Wilson buried William Jennings Bryan at the State Department, so Obama has hidden his predecessor and his rival in plain sight at the upper reaches of the government.

How long will Hillary subject herself to this discipline? Likely as long as Obama is popular. Should his ratings fade, she might move away from the president and could even consider a primary contest against him in 2012. But while he is on top of his game, she'll stay loyal.

But she is shrinking by the day. Once Obama's equal -- and before that his superior -- she now looks tiny compared to the president. She doesn't look like a president in waiting -- she's more like a senior staff member hoping to rise in the bureaucracy. No longer at the head of a movement or the symbol of rising women all over the world, she has faded into the State Department woodwork.

She is much less visible than her predecessors Henry Kissinger, George Schultz, James Baker, Madeleine Albright or Condi Rice. She is even less in the public eye than was Al Haig during his one-year tenure. One has to go back to the likes of Warren Christopher or William Rogers to find a secretary of state as far down the totem poll.

This diminished status has got to grate on her and on him. But they are trapped in Obama's web and cannot easily escape.