His traitor friend Scott McClellan worked for him how long?
I don't believe bad judgment was in play, although the President seems to have an overly optimistic view of human nature. He made sound choices in the judiciary and foreign policy overall.
Given the President's Texas background (cronyism and political favortism have been standard operating procedures for a very long time) and the history of the Bush family going back to his grandfather, his economic background is more of a mercantilist one, with government coordinating with big business, rather than the more laissez faire approach of Barry Goldwater, Robert Taft, Sr., or Calvin Coolidge. It would have been out of character for President Bush to appoint free market advocates to the key economic positions. Unfortunately, the poor advice he received in these matters led to statist, anti-free market policies such as the bailouts and expansion of Medicare.