Confidence Men - Notables

"Presidents are amoung the few mortals who are sometimes graced with chances to change a culture. Throughout a windswept march, the country had been working to dislodge some of the era's prevailing certainties about markets being efficient, about people--- economically, at least--- getting what they deserve, along with the concomitant belief that financial barons are brilliant and indispensable, and manufacturing executives are dinosaurs. With the eyes of the country on him, Barack Obama ended the the month by shielding Wall Street executives agains these winds of cultural change, while he fired a man who had effectively managed four hundred thousand workers in their making of seven million cars a year-- without bothering to meet him. At the same time, he agreed to try to bail out Chrysler, and eventually GM, by adopting the practices and principals of private equity in the use of government funds." p241 "Someone said to me the other day that history produces great leaders. But I don't think that's quite right. I think the American people produce great leaders. The fact that they took a guy who was four years out of the Illinois Senate and made him the president, but insist that he run every mile of the race to get there, clear every hurdle, run every gauntlet-- there's wisdom in that....but now, 5 months along he [Axelrod] and his boss were furiously trying to run up steep and unforgiving learning curves." p 283 "The confidence of a nation rests on trust and can endure for years after this trust has been broken. But it cannot endure indefinitelyif the foundation of trust is not at some point earned. Confidence is the immaterial residue of material actions: justly enforced laws, sound investments, solidly built structures, the well-considered decisions of experts and professionals. Confidence is the public face of competence. Separating the two -- gaining the trust without earning it -- is the age old work of confidence men." p292 "The president received the report on May 15. it took just a few days for Summers to hear about it. He found out through Emmanuel. Orszag looked up from his desk. Summers had stormed over from the White House to Orszag's office, and his face was red with rage. It looked like he was about to burst a blood vessel. He told Orszage he'd found out about the paper. He said that he, Peter, knew the rules, no matter what the president had said. Everything was supposed to go through NEC....[Summers] What you've done is IMMORAL!..." p 297 On Peter Orszag writing a summary report at Obama's direction to get it directly to him. "'What is my narrative?' he all but shouted. 'I don't have a narrative.' Of course he was right. The extraordinary story of Barack Obama -- a boy, so truly African American, who was blown between countries and households before finding his solid stance in the United States and then racing upward through its meritocracy-- no longer seemed pertinent to almost anything he was doing. It was, no doubt, always a narrative of 'up ahead, a dream of what would be': of how he would bind the country into an enlarged ideal of shared purpose, integrating its dissonant chords into a melody as elegant and surely struck as he, himself, appeared to be. Instead, he had vanished into a cloud of endless policy debates and irreconcilable factions, of bold words -- still hoping to summon the magic -- so often divorced from measurable deeds. Bit by bit, month by month the first narrative had faded, even if plenty of people felt it's presence, like the ghost of a lost limb. 'He was right' one of the participants that morning recalled. 'He had no narrative. No story. For someone like Obama, that's like saying I don't know who I am. That I've lost my way." p 372

Confidence Men

A new book by one of Washington's primary journalists came out in the last month.  Ron Suskind, who wrote of the sordid misdeeds of the Bush administration has given his take on President Obama's first 3 years in office.  Chock full of information, interviews and storyline from primary players in the administration the book is being hailed by conservatives as proof positive that the President didn't/doesn't know what he is doing and indeed, appears to have the Washington elite closest to Obama wondering what hit them.  Apparently, Suskind was given access to the top players with the idea that his book would paint a strong and confident picture of the President and his administration.  The Obama elite, instead seem to be taking this as a hit job.  I understand why they think this, but my opinion is that the book positions him pretty uniquely, if not well, for his attempted re-election.  The book itself is divided into three sub-books entitled:  The Two Capitals, Home Alone, The Education of Barack Obama.

The Two Capitals mostly details his rise and highlights the hope and expecation of both the genius's make up his support team and the electorate.  Suskin's narrative weaves in and out of the run up to the election with a starting point in September 2010 and looking back.  A good deal of this reads like a novella detailing the early brushes with Wall illuminati that allowed him to understand the markets.  Between the informational growing spurts, the enlightment on Wall Streets transgressions and the coming fall-out that, according to the narrative, the soon to be President was told was a matter of when - not if, this book details a compelling lead up to his ultimate inauguration.  It details the wonderment and even awe - and occasional distaste that the President felt about his rapid rise in favor amoung the people.  (47)  Finally, this section details the transition team.  Presumably this is where the sections from which the title "The Two Capitals" comes.  I would say that I don't quite understand it's emphasis as a section title since really only the 7th chapter deals with post-election ending as events actually did, with the climax of his inauguration.  The title suggests to discuss the oddly symbiotic relationship of George Bush (seemingly) going into seclusion in Washington and  Barack Obama (seemingly) running things from Chicago.  Except that George Bush is never brought up so apparently it should be common knowledge to the reader.  The seed of quirks in personality, pride and sometimes pomposity of staffing that would contribute to an (at least early) organizational dysfunction are finally in place.

Home Alone  describes the President through his early learning of issues in general management.  These lessons according to the narrative were largely in setting his own agend and not allowing the agenda to be set for him.  Geithner and Summers are highlighted as strong personalities early.  But then, in a story woven to highlight the strong leadership skills of the new president, we visualize a meeting with staff to discuss priorities:  Healthcare or Economic Focus.  In the absence of his primary health care expert, the former Senator Tom Daschle the president calls on a tentative assistant to Daschle to defend Healthcare as the priority.  The poor fellow is trounced by the minds in the room until the President puts him out of his misery, "Ok, enough, enough...I'll play Daschle." (178)  Upon which the President flips the rolls and trumps all the smartest guys in the room.  Healthcare becomes the early focus.  That's not to say he wasn't rolled however.  The book details Rahm Emmanual derailing talks to "rip the bandaid off" and enable true reform with forcible and punctuated language that may as well have been a punch in the stomach to Christina Romer. (219)  This, after the President seemed to be leaning toward a more industry harsh, "bad bank" solution from Romer and Summers.

The final section seems to highlight his ongoing education.  Details how President Obama realized that his team was manipulated situations (if not him) and he was not truly making or implementing policy as he was directing it to be made or managed.  He attributes this largely to the learning process and in effect the book argues that we might consider the first four years as a down payment and that to be fair he really needs another 4 years to work out the details.  The Obama administration seemed a bit shell shocked when the book came out but I suspect that this will be a good jumping off point for them to persuade the American people not to give up on him yet. 

There were several things that discouraged me as I read the book.  The first is that the people that who are in charge of the government are the exact same people that instigated the laws and regulatory environment that allowed it to happen.  Lawrence Summers (Citi and repeal of Glass Stegall), Rahm Emmanual (Fannie), Timothy Geithner (New York Fed, TARP) Ben Bernanke (QE's).   These guys are smart enough to figure out how to rob the american people in a way that is either legal or there is no controling legal authority.  I am bewildered that the President feels that it is wise to work with the very individuals that allowed this mess to occur - and in fact capitalized on the loop holes they created in their roles - to help his resolve what is the most critical economic challenge in my lifetime.  The second thing that I am amazed at is that no one seems interested in truly resolving the problem.  Their plan seems to be do whatever you must in order to make people feel confidence in the market place, and then the market will come back.  Wouldn't it seem wise to work on underlying principals that would actually provide us with strong fundementals?  What must be done to accomplish a fundementally strong financial infrastructure?  How do we drive business toward growth rather than making it more difficult to make money.  How do we discourage the gambling mentality of our financial service sector that provides nothing but naked profit?  Something from nothing?  There must be a way to retstrain the gambling markets and contract the productive markets.  And yet we have no positive suggestions from the smartest guys in the room.