Department of "Huh?!": How-Long-Is-the-Short-Run? I Really Thought Eddie Lazear Was Smarter Than This Edition
Econ 24-1: Readings for November 4, 2011: Inside the U.S. Government

Rereading Ron Suskind's "Confidence Men": Another Note

Someday I will write about the things that I think are right with Ron Suskind's Confidence Men. But not today.

Things wrong with it:

  • I think the portrayal of Christina Romer is not fair. This is somebody who calls out Obama in private as responsible for tolerating a White House staff who make his senior female appointees feel dissed; who back at the age of 25 told Wesleyan's senior economic historian Stan Lebergott in public that a large chunk of his reputation-making book on "Manpower in American Economic Growth" was simply wrong; who in 1988 stood up and gave a discussion of my and Lawrence Summers's Brookings Paper in which she said that it was wrong, minor, and too-much derivative from her own work. Polite, yes. Shrinking violet subject to attacks of the vapors, no.

  • I think the portrayal of Nancy-Ann Min De Parle is similarly unfair. She definitely could and did go toe-to-toe with people like Geithner and Summers in conference rooms, and did so very effectively: the Affordable Care Act reflects her policy priorities and judgments to a truly remarkably high degree.

  • More broadly, I think the book's portrayal of Obama as somebody who was inept at managing gender relations inside the White House is not fair. I believe that Obama dealt effectively with gender-relations concerns--certainly more effectively than other male bosses of his generation typically do.

  • I think the book's portrayal of Lawrence Summers is not fair. I do not think he was especially well-suited to play the role of consensus-building NEC chair. But I believe that that was not the problem with Obama administration economic policy, and that the big problem was not that Larry had too great an influence on Obama's thinking but rather that he had too little. My view is that without Larry Obama administration economic policy would not have been better but rather much much worse.

  • The United States economy is, right now, in significantly better shape than the Japanese economy, the British economy, or the European economy. To do best of four major industrial powers in dealing with the Lesser Depression is a significant accomplishment, even though things are much much worse than I would wish--and even though I think Obama's buying of a premature turn to long-run budget balance and of a policy of appeasing the banks at all hazards lest he provoke a full-scale capital strike were bad mistakes.

  • As Lawrence Summers likes to point out these days, both FDR in 1933-34 and LBJ in 1965-6 had enormous and reliable ideological majorities in both houses eager to endorse their policies, BHO did not. Yet historians are now debating whether 2009-2010 were the most productive years for legislation since 1933-4 or just since 1965-6.

  • The book ends with an upbeat claim that Obama and his administration had by the start of 2011 largely learned the lesson not to give unwarranted influence and respect to the "confidence men". But from my perspective at least Obama and his administration's performance in the first 2/3 of 2011 was significantly below the mark set by 2009-2010. Whether it is the recurrent declarations that failing to raise the debt ceiling was "inconceivable" that put Obama in the position of having no option but to sign whatever debt-ceiling bill him proposed, the continued failure to even nominate candidates for the Board of Governors of the Federal Reserve and for the federal courts, the slowness of motion on implementation of the ACA, or the failure to think creatively how to use residual executive-branch authority to boost employment, the post-Rahm team looks less competent than the Rahm-era team. When Valerie Jarrett tells a roomful of donors that Obama and Boehner could have easily reached a good debt-ceiling deal, but that they were both held hostage by the Republican freshmen and had to knuckle under, I simply want to bang my head against the wall. Subsequent developments badly undermine the book's narrative spine.

  • Perhaps most important, the book's portrayal of Tim Geithner and the Treasury is highly unsatisfactory. As Moe Tkacik put it, Suskind has cast Geithner in the "'Invisible Invincible Shadow Master' role pioneered by Dick Cheney". This is simply wrong. I do not claim understand many of the actions, priorities, and inactions of Treasury Secretary Geithner (and Federal Reserve Chair Bernanke) over the past three years. But they are not Invisible Invincible Shadow Masters--they are extremely smart and must have a view of the world within which there actions make sense. I want some insight into what they were thinking, when, and why. I would, among other things, dearly love to know why Geithner chose Ed DeMarco to run the FHFA and what commitments Obama thought he had from Bernanke before he renominated him…

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