New Book Suggest Summers, Geithner, Ignored Obama Requests Re: Banks
The New York Times and the AP obtained advance copies of journalist Ron Suskind's new book "The Confidence Men: Wall Street, Washington and the Education of a President" reveals some uncomfortable realities about the early days of the Obama White House, particularly about the way Obama's economic team treated the President's directives.
Suskind's reporting on the Bush Administration brought us the phrase "reality-based community."
The book...quotes White House documents that say Mr. Obama’s decisions were routinely “re-litigated” by the chairman of the National Economic Council, Lawrence H. Summers. Some decisions, including one to overhaul the debt-ridden Citibank, were carried out sluggishly or not at all by a resistant Treasury secretary, Timothy F. Geithner, according to the book.
In this rough-and-tumble environment, the book reports, female staff members often felt bruised.
Mr. Suskind quotes from two memos for the president in which Pete Rouse, a senior White House aide, wrote, “There is deep dissatisfaction within the economic team with what is perceived as Larry’s imperious and heavy-handed direction of the economic policy process.”
The book offers a portrait of a White House operating under intense pressure as it dealt with a cascade of crises, from insolvent banks to collapsing carmakers. And it details the rivalries among figures around the president...
The AP story on the Suskind book gets more specific about which Obama decisions were re-decided by Summers and Geithner, specifically one to formulate a plan for dissolving Citigroup (a lack of which later brought the administration under fire).
The book states Geithner and the Treasury Department ignored a March 2009 order to consider dissolving banking giant Citigroup while continuing stress tests on banks, which were burdened with toxic mortgage assets. In the book, Obama does not deny Suskind's account, but does not reveal what he told Geithner when he found out. "Agitated may be too strong a word," Suskind quotes Obama as saying. Obama says later in the book that he was trying to be decisive but "the speed with which the bureaucracy could exercise my decision was slower than I wanted."
"The Citbank incident, and others like it, reflected a more pernicious and personal dilemma emerging from inside the administration: that the young president's authority was being systematically undermined or hedged by his seasoned advisers," Suskind writes. Suskind states that Obama accepts the blame for mismanagement in his administration while noting that restructuring the financial system was complicated and could have resulted in deeper financial harm. One of the major complaints about Obama's administration is that it was too easy on major financial institutions, including Citi. The president had wanted Treasury officials to focus on a proposal to dissolve the bank, but no plan was ever created, the book states.