Confidence Men: Wall Street, Washington, and the Education of a President
US: Sep 2011
The Escape Artists: How Obama's Team Fumbled the Recovery
(Simon & Schuster)
US: Feb 2012
On 28 and 29 October 1929, when the great crash devastated the stock market, Herbert Hoover had been president just shy of eight months. For more than three years, he lingered in office as the nation’s economy sank into Depression. By the time of Franklin D. Roosevelt’s inauguration, hard times and Hoover had become near synonymous.
Barack Obama’s timing resembled Hoover’s far more than Roosevelt’s. The 2008 financial panic hit on George W. Bush’s watch with the collapse of Lehman Brothers less than two months before the election. But the deep economic pain gathered force just as the new president took office.
To Obama and his advisers fell the task of trying to right the economy while pursuing the new president’s ambitious policy goals. Their effort makes an irresistible story line that followed the formula mastered half a century ago by Theodore H. White: Mix details of backroom dealings with a dash of profile material and a pinch of analysis. Get into print once the immediate headlines have passed, but while memories — and grudges — remain fresh.
At its best, the form gives readers insights based on interviews not available to reporters on deadline. But even then, the books suffer from an inescapable flaw — the lack of distance that gives perspective to history.
That lack of distance pervades Noam Scheiber’s The Escape Artists: How Obama’s Team Fumbled the Recovery and Ron Suskind’s Confidence Men: Wall Street, Washington, and the Education of a President. Finished last year, both already have the air of period pieces, crystallizing the viewpoint of a specific ideology and time — the Liberal Conventional Wisdom of 2011.
This view held that because Obama lacked the courage of Paul Krugman’s convictions, he put forward an economic stimulus too small to work. Missing the fervor of an Elizabeth Warren, he squandered time on a health-care reform law barely worthy of the name. In short, Obama’s passivity in the face of Republican intransigence doomed him to a single presidential term. An analyst’s task was to explain the roots of so massive a failure.
Having embraced similar analytical frameworks, both books offer similar explanations — sometimes with nearly identical anecdotes — although Scheiber’s is considerably shorter and more nuanced in its claims.
Obama, they say, came into office with little experience and chose early on to surround himself with advisers drawn from the last Democratic administration, that of Bill Clinton. The dominant economic players, Timothy Geithner and Lawrence Summers, the secretary of the Treasury and the head of the National Economic Council, respectively — as well as many lower-level officials — had close ties to Wall Street, which blinded them to bold ideas even as their rivalries hamstrung the administration’s policymaking.
The authors provide ample evidence for their specific contentions, and readers will find much juicy backstage detail — Summers’ petulant demand for a government car, for example, or Geithner’s dislike of Sheila Bair, the head of the Federal Deposit Insurance Corp. Whether the specifics prove their overall case, however, remains questionable.
Suskind, in particular, pushes his quest for villains far beyond his evidence. At various points, he portrays Geithner as a master manipulator, defying a clueless young president. Even as a reader ponders the plausibility of that picture, he switches field, describing the Treasury secretary as feckless, callow and out of his depth. A reader suffers similar whiplash trying to follow Suskind’s portrayal of Summers: a brilliant and imperious economist who alienated many of his colleagues.
Scheiber more soberly describes the chaotic business of forming policy in a new administration. But he, too, falls into one of the characteristic traps of White House books — describing policy as a nearly pure exercise in executive will, heavily discounting the degree to which Congress constrains presidential action.
He reports, for example, that Christina Romer, the UC Berkeley economics professor who headed Obama’s initial Council of Economic Advisers, believed that the ailing economy required $1.8 trillion in stimulus. Summers, he writes, directed her to present a smaller figure out of concern that Obama and his political advisers would see the enormous amount as politically impossible. Obama proposed $800 billion and Congress approved less.
Scheiber suggests that Obama could have gotten more. But given the depth of Republican opposition to any of Obama’s proposals as well as the country’s uneasiness with massive debt, that assertion faces a steep hill of doubt that he does little to climb.
The more fundamental problem, however, lies in the book’s overall analytical lens. For example, in describing the administration’s halting efforts to deal with the problems of the housing market, Scheiber says officials were “worried about the dreadful politics” of bailing out homeowners who had gotten over their heads in debt while doing nothing for those who had been prudent. “Yet as terrible as a trillion-dollar housing bailout was politically, it wasn’t as bad as 9 percent unemployment and a stagnant economy for the rest of the president’s term.”
Were those the only choices, he might be right. But seen from the perspective of just a few months after the book was finished, the picture already looks different. No longer stagnant, the economy has begun growing again, and Obama appears at least even money, probably better, to win re-election.
The point is not that Obama and his team did everything right — no president does — but that three and a half years into his term, we simply don’t know how the story ends. Perhaps, once historians get their turn, the true task for analysis will turn out to be not the roots of failure, but how, against heavy odds, an inexperienced, young president escaped Hoover’s fate.