This recent book describes how Obama and his hand-picked economic team poorly managed the gov'ts role in the financial crisis, and in fact couldn't handle the group dynamics of their "team of rivals." Obama was a "brilliant amateur," who was dynamic enough to rise to the presidency, but grossly unprepared to handle the current burdens of the job. Wall Street alliances of course helped to fund Obama's campaign, but once the magnitude of the crisis came to light, Obama knew and articulated that the nation needed strong, Roosevelt-ian reforms to clean up the Street. But he subverted that goal by hiring Geithner and Summers, two individuals who were about as cozy to Wall St. as possible without being total insiders.
Larry Summers headed Obama's economic team, comprised of economists and officials with top credentials. Obama himself did not have much background in economic theory and policy, and often deferred to Summers in meetings - a man who by most accounts is a total a-hole and has to run the show, which further undermined the president. Obama's stubborn desire to achieve team consensus often delayed or hampered effective decision making. Summers was alleged to compare Obama's team to "Home Alone" with no adult in charge, also claiming that "Clinton would have never made these mistakes." Typical Summers to contribute to Obama's struggles and then criticize him for it.
Obama's hiring of Rahm Emmanuel as chief of staff was a mistake; Emmanuel was a temperamental strategist, not an effective manager. He often forgot to invite key people to meetings, especially the women in Obama's cabinet (deliberately or not). Obama recruited some of the most talented women in the country, yet many of them felt unengaged, disrespected, and resigned in disgust. During some meetings, the "boys" would band together and Obama would mostly listen to them and forget to consult with the women.
Treasury Sec. Tim Geithner felt that Obama was economically naive and also believed that America didn't need a major financial overhaul, so therefore Geithner had to protect the system from the president. Obama made it clear very early that the "TBTF" big banks should be broken up. But instead, Geithner "dragged his feet" on that order to say the least (they only got bigger under his watch), and some would say committed insubordination by instead giving aid to those banks. Clearly this was a herculean task even if Geither was 100% in agreement with Obama, and this was a rare chance to clean up the Street but instead nothing was done. Obama was very displeased with this, but stuck with Geithner so as to not cause additional controversy and economic anxiety. So to avoid the drama, he kept a disloyal, anti-reform guy in a key regulatory role. Maybe that pretty much sums up the squandered potential of the Obama presidency.
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I've seen this story making the rounds. I basically don't buy it, for two reasons.
First, I don't think the explanation is sufficient. They're making the argument that Obama wanted to be more progressive in his response and harsher on the banks, but that he was prevented from doing this by the intransigence of his economic team. However, (A) he picked that economic team, knowing full well their support for the banks. If your goal is to crack down on the banks, you don't put a pair of guys with a decade-long history of supporting banks at the head of the table. (B) The pattern of pro-bank behavior is too consistent, and it's positive support as well as negative support. That is, the White House support for banks wasn't just "not breaking them up" (support by lack of action), it was also actively propping them up (taking positive action) with TARP and TALF and HAMP and Fed discount window and blah blah blah. An intransigent Treasury Secretary might be able to block breaking up the banks, assuming a sufficient level of incompetence from Obama in overseeing that (does he not periodically ask "hey, how's progress on that break-up?"). But the rest of the positive actions that the WH has taken in support of the banks? And this continues up to the present: just a few weeks ago the WH was leaning on the NY AG to stop doing real investigations into banking misconduct. A couple rogue advisors don't create this consistent pattern of behavior.
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I see what you mean and I share in the suspicion. But it seems a very bizarre tactic for Obama and his supporters to downplay his pro-banks behavior with an explanation of incompetence/leadership vacuum. They try to remind America that he was a true progressive after all as we approach campaign season, but Suskind's narrative also reminds us that Obama is a bad manager and not very presidential at times. Would that make anyone more likely to vote for him? People like Summers have vehemently denied ever uttering anything anti-Obama while serving under him (though that is to be expected). If this is a PR ploy, it's either genius or wacko, but definitely risky.
While the banks helped Obama get to the White House, it's not uncommon for presidents to turn their back on some supporters once they take the reins of power (or at least not fully live up to the supporters' expectations). Though looking back, I don't think Wall St. has much to complain about Obama, except for maybe a few provisions in Dodd-Frank that eliminate some bank fees (the rest of the act can easily be circumvented by big institutions, and banks are already devising new schemes to replace the lost revenue from the outlawed fees). Obama took Wall St. money in 2007-2008 for sure, but I find it reasonable that in 2009 he wanted to enact financial reform as part of his overall vision for improving the country and responding to voter sentiment. He just had no idea how to implement it, and turned to the wrong people for help.
Obama's naivete came through in his hiring of Summers and Geithner. He's not an economist, so he wanted to defer to "experienced guys". I am sure Summers and Geithner said all the right things while they were being vetted, and maybe Obama ignored their track records, or didn't know enough (and certainly didn't ask the tough questions), or felt confident that his great leadership skills would keep those guys in line with his agenda. I'm not trying to excuse his mistake, but just proposing a possible explanation. Everything about Obama's first quarter was rush, rush, rush to respond to the fin. crisis. And with the GOP being a-holes and trying to block many of his nominations, maybe Obama just wanted to make "safe" choices for his econ. team, which would also hopefully reassure Wall St. and calm Main St. If he hired true crusaders for those posts, it would have been mutiny. Obama wanted to be a different type of leader who achieves change through consensus and cooperation, but set himself and the nation up for disappointment. I don't think he was pulling a fast-one on us; it was just a combination of conditions, inexperience, and poor planning.
And once Summers and Geithner revealed their true selves in DC, it was too late for Obama. Dismissing or marginalizing them (if even possible) would send a bad message. A real leader would have found a way to do something though, rather than keep tolerating Geithner thumbing his nose at Obama's plans. Or maybe Obama was just too gullible and loyal with Geithner - who maybe kept telling him, "I'm working on it but it's really hard to get the ball rolling - it's the GOP, man!" And Obama isn't one to step on toes and micromanage (especially on stuff he doesn't understand), so maybe he just left it on the back burner while he focused on health care and Afghanistan?
Overall, I don't think the book can persuade people one way or another on Obama's progressive bona fides. Conservatives already think he's a socialist, and fed up progressives think he's a phony and a sellout. Even if he is committed to his campaign agenda, is he competent enough to make it happen? Sadly, Obama tells Suskind in the book that after his staff shake-up after the horrible midterms, he now has the team in place to be the president the nation expects, and he's starting to hit his stride with the job. Well it's a bit late for that. Suskind does seem to paint Obama as a victim, but a lot of it was of his own making (despite the best of intentions), so I don't have much sympathy. But you have to agree that so many factors were aligned against him that even if he made flawless decisions, a lot was out of his control. It's possible that not much would be different today.
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