Confidence Men: Wall Street, Washington, and the Education of a President by Ron Suskind

Author:Ron Suskind
Language: eng
Format: mobi, epub, pdf
Tags: Politics
ISBN: 9780061429255
Publisher: Harper
Published: 2011-09-20T04:00:00+00:00

12

Nowhere Man

When Obama selected his B-team, he left in his wake a slew of jilted economists. The group was characterized largely by progressive, Keynesian thinkers, who soon enough began to question whether the stimulus was sufficient, and who launched forward from there in a wide expanse of op-eds, lectures, and interviews assessing and criticizing the president’s first one hundred days.

With that milepost just two days away, Obama, on the evening of April 27, invited this Greek chorus of the noisy and moderately disaffected for a dinner at the White House.

For most in this group, a call from the White House, any call, was something to pine for; when it came, they tended to drop everything. Especially Joseph Stiglitz. Generally uninvolved during the campaign, the Nobel-winning economist hadn’t heard a peep since Obama became president. His wife, phoned in her Pilates class that morning by Summers’s assistant, managed to get the message to Joe—arguably the world’s most cited economist—by midafternoon, just in time for him to jump on a train to D.C.

For most of the others, the invites were a bit more decorous—coming a week ahead—and at 7:00 p.m. they gathered around the curve of a table in the residence. A Mensa murderers’ row: Stiglitz; Harvard’s Ken Rogoff, a specialist in the history of financial collapse; Jeffrey Sachs, Columbia University’s globe-trotting guru of globalism; and Paul Krugman, whose daily blog and twice-weekly columns on the New York Times editorial page were quickly becoming the platform for a progressive government-in-exile. Across the table were Summers, Geithner, and Romer, protectively clustered around the president. Of course, all the economists knew one another. Krugman, Summers, and Sachs, in fact, were once graduate students together at MIT, where they had to work out the mathematical proof of how three people can each be the smartest person in a room at the very same instant.

Over roast beef and salad, with lettuce that Michelle had grown in the White House’s organic indoor garden, they carried on a somewhat tamer, private corollary of a conversation that had been conducted in public for months. This was early, though. Questions—what exactly was Obama thinking?—had started to harden into criticisms only in the past month or so, following the AIG bonus scandal, revelation of the billions in counterparty payments, the unconvincing surprise and then outrage voiced by both Obama and Geithner (who said that he didn’t remember much about the bonuses), and the announcement of the coming stress tests.

Several of the economists had all but foretold the financial crisis and felt they’d not been given due credit or, at the very least, thought their precognition earned them the privilege of an audience with the president. The issue of credit was especially acute for Stiglitz. His Nobel, awarded in 2001, was for his work showing how markets can spin out of control when “imperfect information” is shared unequally by parties to a transaction, often giving an unfair advantage to one participant. This is, more or less, the business plan for much of the subprime and derivatives market.

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