The turning point
August 7, 2010
Why couldn’t Bill Clinton have offered to pay for dry-cleaning? Why couldn’t Al Gore have chosen a less weaselly vice-presidential candidate? Why couldn’t George W. Bush have been eating a bigger pretzel?
And why couldn’t President Obama have used his early popularity and strength to push through a bigger stimulus package? Something that would have not simply reduced job losses, but spurred job growth? I have my complaints about Obama, but I know a McCain administration — blinkered, clueless, wedded to corrupt conservative economic dogma — would have presided over a near-total economic collapse and another Great Depression.
Joshua Marshall sees the inadequate stimulus as the key error of the Obama administration, one likely to give the Republicans a chance to increase their power in Congress. Frank Rich has his own take on this in an excellent NYRB piece:
Yet it’s hard not to wonder if much more would have been accomplished, both substantively and politically, had Obama’s economic principals, Timothy Geithner and Lawrence Summers, been more open to ideas not of their own authorship and more capable of playing with others, including a public that still hardly knows either of them. Obama “apparently never considered appointing a banker or Fed governor from outside the East Coast who knew finance but was less connected to the policies that caused the crisis,” Alter writes. The homogenous team he chose “all knew one another and all looked at the world through nearly identical eyes.” Once in place in Washington, they would all underestimate the threat of rising unemployment, be blindsided by the populist anger rising outside the capital, and even fail to predict the no-brainer popularity of the “cash for clunkers” program. Their paramount group-think lapse—their inability “to think more boldly about creating jobs fast”—still haunts the administration. A White House job summit didn’t materialize until December 2009, nearly a year too late.
The Promise depicts a carelessness and dysfunctionality in the economic team that at times matches that revealed by Rolling Stone in the military and civilian leadership of the team managing the Afghanistan war. Geithner’s inexplicable serial income tax delinquencies, as elucidated by Alter, should have disqualified him for Treasury secretary just as Stanley McChrystal’s role in the Pentagon’s political coverup of Pat Tillman’s friendly fire death should have barred him from the top military job in Afghanistan. Summers’s Machiavellian efforts to minimize or outright exclude the input of ostensible administration economic players like Paul Volcker, Austan Goolsbee, and Christina Romer seem to have engaged his energies as much as the policy issues at hand.
In April 2009, at Obama’s insistence, a group of economists that Summers had blocked from the Oval Office, including Volcker, Paul Krugman, Joseph Stiglitz, and Alan Blinder, was invited to a White House dinner. That colloquy has been cited ever since by White House aides in response to complaints that the administration’s economic circle is too insular. The dinner was a one-off, however, and the liberal economists’ ideas about tougher financial reform and a more ambitious stimulus package have languished.
Obama may have entered the White House with the intention of assembling a Lincolnesque “team of rivals,” but Summers subverted that notion by making himself chief packager and gatekeeper for any dissenting arguments about economic policy—all, he claimed, to spare the President from meeting with “long-winded people.” Lincoln’s “team of rivals” reported directly to Lincoln, but, as one source told Alter, Summers so skewed the process in this White House that it was like “a team of rivals reporting to Edwin Stanton, Lincoln’s prideful secretary of war.” Even Warren Buffett, a supporter who had spoken to Obama weekly during the fall of 2008, “found himself mysteriously out of touch with the new president” once he took office.
Obama was now imprisoned within the cozy Summers-Geithner group “and it would be increasingly difficult for him to see beyond its borders.” This “disconnection from the world,” Alter concludes, was not due to ideology or the clout of special interests but was instead “the malign consequence of the American love of expertise, which, with the help of citadels of the meritocracy, had moved from a mere culture to something approaching a cult.” For all Obama’s skepticism of cant, he was “in thrall to the idea that with enough analysis, there was a ‘right answer’ to everything. But a right answer for whom?”
For whom? Come November, we may get our answer: For the Republicans. And that will mean the end of any chance of averting a longer, deeper recession. With its squalid cynicism and nihilistic program of doing everything it can to stall the recovery and whip up populist anger in order to regain power, the GOP has become an active menace to this democratic society. The sheer level of craziness and sleaze may be enough to alienate the voters. But that’s a mighty slender reed to hang our hopes on.
That it should come to this, after plenty of warnings, simply astonishes me.