Blaming all the president’s men

How’s this for an assessment of Barack Obama’s presidency: ‘We’re home alone. There’s no adult in charge.’ Sounds like something Mitt Romney or another Republican might say. But no, according to a new book, it came from inside the White House – from Lawrence Summers, the former head of Obama’s National Economic Council.

Veteran journalist Ron Suskind has dug up juicy quotes like this in his ‘tell all’ account of the first two years of the administration, spanning the period roughly from Obama’s election in November 2008 to the Republican takeover of the House of Representatives in mid-term elections in November 2010. Suskind’s research is based on interviews with 200 people, including Obama, as well as access to internal memos. His Confidence Men paints an unflattering portrait of the Obama White House, with rivalries and dysfunction having a negative impact on the administration’s ability to make decisions and act effectively.

As outsiders, we know that Obama’s presidency has not gone well. With high unemployment, political gridlock and a lack of direction, it is not a surprise that a majority of Americans do not approve of his job performance. But if things look bad from the outside, Suskind is saying they look just as bad, if not worse, from the inside.

Suskind describes how, from the outset, top aides were constantly bickering and engaging in turf wars. He listens to women complain about a frat-boy atmosphere that excluded them. Christina Romer, the former chair of the Council of Economic Advisers, said she ‘felt like a piece of meat’; communications director Anita Dunn is quoted as saying that the White House ‘fit[s] all the classic legal requirements for a genuinely hostile workplace to women’. In his most sensational allegation, Suskind claims that there was a case of insubordination, when Treasury Secretary Timothy Geithner failed to follow through on Obama’s directive to close down Citibank in the spring of 2009 as the first step in a restructuring of the banking system.

Obama is portrayed as being out of his depth. Suskind calls him a ‘brilliant amateur’ who ‘wasn’t ready’ to be president. His lack of managerial and leadership experience shows in his inability to handle his team.

Obama adopts an academic pose towards issues, according to Suskind, encouraging his aides to debate topics almost endlessly – and even allowing his aides to re-raise (or ‘re-litigate’) subjects that were thought to have been closed. His preferred style is to let others take the lead, listen to a variety of suggested ideas, and then ‘step down from his above-the-fray perch to close the deal’. But, as Suskind notes, this approach of letting others take the lead hasn’t really worked. For example, on healthcare reform, Obama’s hands-off approach meant that the debate went in a different direction than he had hoped, closing off the possibility of his original proposals.

Suskind also finds that Obama has an incorrigible tendency to seek consensus and the middle road in all discussions: ‘Obama would sit on high, trying to judge if there was any shared ground between the competing debate teams that might coalesce into a policy.’ Opposing ideas would ‘get stitched together into some pragmatic conclusion – but hollow’.

Not surprisingly, the White House has challenged some of Suskind’s evidence. Summers backtracked from his ‘home alone’ quote (Suskind says it was relayed to him by fellow economic adviser, Peter Orszag). And Suskind does not really build a solid case to support his claim that Geithner committed a direct act of insubordination. But sifting through the material, Suskind’s accusations do appear to have a ring of truth to them. Other sources have corroborated a general sense of disarray, and it does seem that Obama has bought into modern management theory, which places an emphasis on consensus and team-building, at the expense of leadership: more facilitator-in-chief than commander-in-chief.

The main problem with Confidence Men arises not so much from questions of accuracy, but rather from Suskind’s attempt to provide an explanation as to why the Obama administration has been ineffective.

The first point is that you cannot construct a proper analysis by simply collecting insider gossip. The reflections and accusations of disgruntled former staff members seeking to cover their asses and divert blame do not provide a foundation for understanding. It is, indeed, unseemly how quickly – only midway through Obama’s first term – aides were willing to spill the beans. Such lack of loyalty is really astounding, and you wonder how Obama can trust anyone he deals with today, knowing that in six months or so all will be revealed in public.

More problematically, Suskind imposes a storyline that positions Wall Street at the root of the administration’s woes. It goes something like this: Obama won the election because he appeared to have a better response than John McCain to the financial crisis. Once installed in office, Obama’s fear of possible financial collapse led him to appoint Summers and Geithner because of their expertise with finance. (As head of the New York Federal Reserve, Geithner was directly involved in the Bear Stearns, Lehman Brothers and AIG ordeals.) Obama initially wanted to rein in the banks, but Geithner in particular persuaded him that such moves would undermine ‘confidence’ in the banks and the economy generally. However, Geithner, according to Suskind, was really acting on Wall Street’s behalf (with Suskind citing a top banker who referred to the treasury secretary as ‘our man in Washington’). When new financial regulations were eventually introduced via the Dodd-Frank bill in the summer of 2010, they were watered down from the original proposals and many said they would not prevent a repeat of the 2008 meltdown.

Suskind is right when he argues that the Obama administration did not pursue a rigorous overhaul of the financial regulatory regime. But he is wrong to contend that the administration’s shortcomings stem from its inability to focus on financial reform and its unwillingness to stand up to Wall Street; the problems are much broader than that. Financial reform wasn’t (and isn’t) even the main economic issue: the real problem is a lack of economic dynamism and the resulting unemployment. Suskind zeroes in on Obama’s economic advisers, and yet there is relatively little in the book on the broader economic debate. Instead, for Suskind, it’s all about controlling Wall Street. He includes a section that describes how Summers and Romer feel hamstrung because Obama won’t countenance a second stimulus (because he thought it was a non-starter in Congress), but that’s about it.

Suskind insinuates that the main problem is that Washington is too close to Wall Street. Written before Occupy Wall Street, Confidence Men uses some of the Occupiers’ same guilt-by-association arguments. Suskind claims that Wall Street effectively sneaks into the cabinet meetings in the form of Geithner. But Geithner hardly fits the picture of a bought man, given that – as Suskind readily recognises – he is a career government official, not a Wall Street financier. At the same time, Suskind praises Gary Gensler, the ex-Goldman Sachs executive who pursued the reform of derivatives as head of the Commodities Futures Trading Commission. So it is hardly a case of one’s background directly determining one’s outlook.

More importantly, Suskind fails to recognise that there were reasonable arguments put forward by Geithner and others for not nationalising the banks. I happen to think the administration could have done more, but I also acknowledge there is a debate to be had. In contrast, Suskind – like many other critics today – prefers to pin the blame on a conspiracy of corrupt individuals with their alleged ties to evil Wall Street.

Suskind blames the administration’s ineffectiveness on its incoherent internal organisation. If only Obama had selected better advisers; if only he knew how to manage his advisers better; if only he knew how to lead and stopped being so passive. But Obama’s lack of achievement is not due to internal disarray; that disarray is a symptom of a deeper political problem. Obama campaigned on vague appeals to ‘hope’ and ‘change’ rather than offering a clear diagnosis and solution. He never earned popular political support for specific measures. Entering the White House, he and his team did not share a common understanding of the nature of the crisis and how to deal with it. As Suskind notes, Obama didn’t really know the people he would select, but an even bigger issue is that they did not share common ideological assumptions; they were a collection of unmoored individuals thrown together.

The flaw in Suskind’s analysis is exposed towards the end of his book. After hundreds of pages criticising Obama, he shifts gears and expresses optimism. Following the mid-term elections, Obama undertook a ‘clean sweep’ and replaced most of his staff (with a notable exception of Geithner). And, in Obama’s move in December 2010 to accept an extension of the Bush tax cuts, Suskind sees evidence of a new Obama, ‘now firmly in a more dynamic “I’ll just do it myself” model of leadership’.

Obama might now hold a tighter grip on his organisation, but it did not turn around his fortunes, as Suskind predicts. In his supposedly bold move to accept the Bush tax cuts, Obama made an amateur mistake and failed to get Republicans’ acceptance to raise the debt ceiling in return. As a result, the stage was set for this summer’s debt-ceiling debacle (which damaged the reputation of the entire political class – Congress and the president, Republicans and Democrats). New advisers, a new direction, and yet the same result. This shows how Obama’s woes are not simply a question of his management style.

Indeed, the most revealing – and worrying – parts of Confidence Men are not quotes from various anonymous ‘insiders’, but statements from the president himself, which the White House has not denied. Reflecting on his rocky first two years, he says his mistakes were ‘less on the policy front and more on the communications front’. He concludes that he needs to go back to the kind of un-specific hopey-changey messages he produced during his election campaign: ‘The irony is, the reason I was in this office is because I told a story to the American people. It wasn’t the specifics of my healthcare plan or Afghanistan…. What the president can do, that nobody else can do, is tell a story to the American people about where we are and where we are going.’

President Obama’s problems run deeper than bad PR. In office, you do not gain political success by simply ‘telling a story’ and hoping that people buy into it. You will be judged by what you do, not just by what you say – your specific ideas, proposals, actions and results. Faced with the harsh realities of governing, Obama wants to return to the safe world of espousing platitudes on the campaign trail. You shouldn’t blame his advisers for that bad idea, or anything else he does.

Sean Collins is a writer based in New York. Visit his blog, The American Situation, here.