Confidence Men: Wall Street, Washington, and the Education of a Presidentby Ron Suskind
AcclaimedPulitzer Prize-winning journalist Ron Suskind, authorof the New York Times bestselling The Way of the World, The OnePercent Doctrine, and The Price of Loyalty, gives anexplosive inside account of an Obama White House overwhelmed by the globalfinancial crisis—and the political and economic consequences still being felttoday/b>/b>/b>/b>
AcclaimedPulitzer Prize-winning journalist Ron Suskind, authorof the New York Times bestselling The Way of the World, The OnePercent Doctrine, and The Price of Loyalty, gives anexplosive inside account of an Obama White House overwhelmed by the globalfinancial crisis—and the political and economic consequences still being felttoday. Readers of Michael Lewis’s The Big Short, John Heilemann and Mark Halperin’s GameChange, and Andrew Ross Sorkin’s Too Big toFail will be riveted by Suskind’s illuminating,in-depth investigation of the financial meltdown. Rooted in hundreds of hoursof interviews with key members of the Obama administration, including thePresident himself, Suskind’s exposé offers aneyewitness account of the most momentous events in the history of globalfinance.
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Confidence MenWall Street, Washington, and the Education of a President
By Ron Suskind
HarperCollinsCopyright © 2011 Ron Suskind
All right reserved.
Chapter OneSeptember 17, 2010
President Barack Obama dances lightly down the four
marble steps to the Rose Garden and across the flagstones to a waiting
lectern. He still glides, elegant and purposeful, in that tall man's
short-stepa ballplayer returning to the court after a time out.
Today, September 17, 2010, he has committed to putting some "points
on the board," in the sports parlance of Rahm Emanuel, his chief of
staff. The president needs to show the country that he hasn't lost his
game, the ineffable confidence, the surety of stance and delivery that
propelled a man with little political experience to scale cosmic heights
and to realize what felt, on Election Day, like democracy's version of the
Through recent history, America has considered itself something of a
providential miracle, a country that kept finding reasons to believe in its
Manifest Destiny. That faith, sorely tested over the past several decades,
found itself restored with dizzying ebullience when Barack Obama and
his beautiful family stepped onto the stage in Chicago's Grant Park as
America's First Family. It was a sensation of such intensity as to startle
many across the country and around the world into believing in the
promise of America, the original and long-burning beacon of the democratic
The legacy of that moment is ever more found in the lengthening
shadow it casts. In the nearly two years since, Barack Obama, like an
archangel returned to earth, has been forced to walk the flat land and
feel its hard contours. What, if anything, it has awakened in him remains
unclearat present, he is clearly struggling to get his bearings. And yet
it is impossible to see the president and not search out signs of that man
from Grant Park, who strode so boldly across history's confetti-strewn
On this warm late-summer afternoon, with Congress out of session,
Obama has convened the press to announce the launch of a new agency,
the Consumer Financial Protection Bureau. It has been designed to
protect American consumers from the predations of the financial ser,vices
and banking industry, which over the past ,couple
of decades has grown
vast and insatiable by inventing, for the most part, new ways to market,
sell, and invest in debt.
The woman standing awkwardly at Obama's left hip, Harvard Law
School professor Elizabeth Warren, has become the nation's town crier
on the subject of bankruptcy and debt. In the two years since the
economic crisis, she has emerged from nowhere to trumpet the story of how
debt was turned into a velvety weapon, how engorged financial firms
deceptively packaged it, sold it as securities, and extracted usurious profits
from American consumers, especially those in America's once-vaunted
middle class. The notion of a consumer financial product agency, a
freestanding, independently funded entity like the Federal Communications
Commission, was originally hers, unveiled in an article she published
in the spring of 2007. The truth is that no one much cared for the idea,
until her unheeded concerns turned up at the center of the worst financial
meltdown since the Great Depression.
So today is a long-delayed victory for Warrenalmost. Somehow
nothing in the Rose Garden is quite as it seems. The president praises
Warren, whom he says he met at Harvard Law School, as though they
are old friends. They're not, and Warren only became a professor at
Harvard Law the year after Obama graduated from it. In fact, over the past
two years, while Warren has seen herself lionized on magazine covers
and in prime-time interviews as a leading voice for tough, restorative
reforms, the president seems to have been studiously avoiding her. Part of
the problem, clearly, is that she has been acting the way ,people
and hoped that man from Grant Park would.
This has caused discomfort not only for the president, but also for
his top lieutenants, including the boyish man in the too-long jacket at
Obama's right hip, bunched cuffs around his shoes, looking more than
anything like a teenager who just grabbed a suit out of his dad's closet.
That's Treasury secretary Tim Geithner, looking sheepish. Only those
in his inner circle at Treasury, though, can precisely read what's behind
that expression: a string of private efforts across the past year to neutralize
Warren. The previous fall, Geithner huddled with top aides to develop
what one called an "Elizabeth Warren strategy," a plan to engage
with the firebrand reformer that would render her politically inert. He
never worked out a viable strategya way to meet with Warren without
drawing undesirable comparisonsand so, like the president, he didn't.
What the Treasury Department did do, unbeknownst to Warren, was
embrace demands from the banking industry to create a bureau under the
condition that Warren would not be allowed to lead it. But as the financial
reform bill moved to a vote in early summer, industry lobbyists were
so aggrieved at the idea of an agencythey felt it unsupportable under
any conditionsthat they didn't bother to call in their chits on Warren.
In fact, they played it just so. The industry managed to get the
proposed agency shrunk into a bureau that would live under the auspices of
the Federal Reserve, the government's greatest mixed metaphor of public
purpose and private self-regard, representing as it does the dual interests
of a sound monetary policy and the health of the banking industry.
Beyond that, the bureau's rules can be vetoed by a two-thirds majority of
a panel of other financial regulatorsan indignity of institutionalized
second-guessing known to few other agencies.
But after financial regulatory reform legislation passed in July, the
prospect of Warren at the bureau's helm quickly grew into a movement:
complete with Internet write-in campaigns, online petitions, flurries of
editorials, and even a viral rap videocertainly a first in the history of
appointing government regulators.
Warren would seem the easiest of choices. Since his earliest days on
the campaign trail, Obama had spoken passionately about restoring
competent government, and with it competent regulators. With the midterm
elections less than two months away, he could have used a confirmation
battle over Warren to draw a much-needed distinction between his
administration and those, mostly Republicans, who dared to side publicly
with America's big banks and financial firms. Warren's celebrated ferocity
looked tailor made to revive Obama's vast grassroots campaign network.
Like an encamped army with nothing to do, the foot soldiers of the
campaign had fought among themselves a bit, eaten the leftover rations,
and then drifted back to private life. Field commanders still in touch
with the White House signaled by midsummer that a Warren confirmation
battle would rally the troops and, according to one, "at least show
what we stand for." On the other side was the financial ser,vices
which hurled nonspecific attacks at Warren, claiming she was arrogant,
disrespectful, and power-hungry. It had begun castigating Obama as
"anti-business," a charge the industry asserts would be definitively
confirmed by the appointment of Warren.
In mid-August, Warren was finally called in to meet with the President.
Obama began their sit down saying, "This isn't a job interview."
It wasn't. The president had already decided what he was going to do,
in a managerial style that had become his trademark: integrating policy
options and political prognostication into a prepackaged solution,announced
before the game even started.
Combatants over a Warren nomination will never take the field. Shuffling
papers on the lectern in the Rose Garden, Obama says, with a few
passive locutions, that Warren will be on the search committee to find
someone to run the bureau:
"She was the architect behind the idea for a consumer watchdog, so
it only makes sense that she'd be the, um ..." He stumbles briefly, as
though the text is pulling him off balance... "She should be the
architect working with Secretary of Treasury Geithner in standing up the
agency." He adds that she'll be an adviser to both him and Geithner and
"will also play a pivotal role in helping me determine who the best choice
is for director of the bureau."
That's basically it. None of the troops are energized, and anyone who
feared the financial debacle might produce a true innovation, a rock star
regulator, is left unruffled.
The press conference ends with reporters shouting as the president
turns to leave. One yells above the rest, "Why didn't you put her up for
A moment later the president walks from the Rose Garden to the basement
of the White House. Having finished with Geithner and Warren,
he strolls unaccompanied, free of handlers and Secret Ser,vice,
long subterranean hall on his way to the Situation Room.
"Hey, Alan, how you doing?" he pipes up, spotting Assistant
Secretary of the Treasury for Economic Affairs Alan Krueger coming the
other way. Krueger carries an additional title, held over from the nineteenth
century: chief economist of the United States.
"Just fine, Mr. President," a somewhat surprised Krueger responds.
"In fact, today's my birthday."
The two men stop to chat for a moment at the entrance to the White
House mess. The president has grown to appreciate Krueger's input over
the past eighteen months. A Prince,ton
professor and frequent stand-in
for Geithner at Obama's morning economic briefing, Krueger is something
of an oddity in the upper reaches of government: he's an actual
researcher. Typically, high-ranking economists do their substantive,
elbows-deep research in the earlier stages of their careers. Not Krueger.
Not only had he been publishing groundbreaking studies up until joining
the administration in January 2009, but he had also gone so far as to
commission targeted research over the past year, using Prince,ton
resources when he found the government's research apparatus too slow.
The current economic crisis, he felt, was too thorny and too unusual
not to study with fresh eyes and first questions. Characterized by both
rock-bottom interest rates and a catastrophic de-leveraging spiral, the
crisis defied most historical precedents from which actionable policies
might be drawn. And the White House needed nothing so much as a
stream of creative remedies, one right after the next.
The administration undershot the crisis, convincing itself by the
summer of 2009 that the economy had turned the corner and, at the
same time, recognizing that it would be a jobless recovery of stunning
disparities, with restored GDP growth alongside fast rising unemployment.
In fact, internal administration projections in June 2009, when
unemployment was at 8 percent, noted that joblessness would average
a whopping 9.8 percent in 2010. Krueger and others began to work
furiously to find innovative ways that the government might stimulate
job growth. Being a close friend of both National Economic Council
chairman Larry Summers, who was his graduate adviser at Harvard,
and Office of Management and Budget director Peter Orszag, whom he
mentored at Prince,ton,
made Krueger one of the few ,people
both of Obama's top economic advisers deferred. All to no avail.
After the stimulus bill was passed in February 2009, little else happened
on the jobs front for a year and a half. Proposals were talked to death
without resolution; the few that were adopted tended to lack a coherent
political strategy to make them legislative reality. The day before, the
Census Bureau had announced that poverty had hit a fifteen-year high.
Even the Wall Street Journal's editorial page had bemoaned that middle
class incomes dropped a stunning 5 percent between 2001 and 2009, a
lost decade laying claim to the country's worst economic performance
in half a century. Unemployment stood at precisely the 9.8 percent the
administration's prognosticators had foretold.
Obama, who was at the center of this dispiriting process, tried to keep
things light and breezy in the hallway with Krueger. He seemed improbably
ebullient, wanting to talk.
"So, how old?"
"A little older than you," Krueger says. "Just turned fifty."
Obama steps back, appraisingly.
"Fifty? You're looking pretty good for fifty."
He means it. Krueger notices for the first time that the president, a
year his junior, has really aged in office, bits of gray hair now sprinkling
his crown, wrinkles growing around his eyes. Krueger is about to say,
"Well, my job's easier than yours," but he catches himself and instead
goes with "You should see me on the basketball court." Maybe this will
win him an invitation to one of Obama's famous five-on-fives.
None forthcoming, and Obama closes it out. "So what are you doing
for your birthday?"
"Going back to Prince,ton,"
Krueger says. He's a breath away from adding: soon for good.
He's through with D.C. He has decided to return home a day after
the midterms, exhausted for sure, but more than that, tamping down the
sense of missed opportunity. As the two men part, he can't help but wonder
if Obama feels the same way. How could he not?
Waiting in the Oval Office are Jann Wenner, the founder of Rolling Stone
magazine, and his executive editor, Eric Bates. They have been there for
an hour, since just before the Elizabeth Warren event, waiting and
preparing for an interview with the president. Rolling Stone, failing to score
an Obama interview since the campaign, has nonetheless gone through a
renaissance in the past two years, dealing some of the most forceful
criticisms of Wall Street and Washington and the collusion between the two,
with targeted shots directed at both Goldman Sachs and Obama himself.
So, for the president, today is all about forcefully answering the charge
from the progressive communityand a great many independents
that what got him elected has not been evident in his governance. The
administration's strategy is to emphasize that the distance between the
hopes of Grant Park and the trimmed ambitions of legislative pragmatism
is not a fissure, rupture, or acquiescence, but rather the hard reality
of governing in a partisan era. All the better for those words to appear in
an organ of criticism, which is why Rolling Stone was chosen.
Obama enters his famous office and compliments Wenner, the stylish,
aging hipster, on his colorful socks: "If I wasn't president, I could wear
socks like that." Then he settles himself into a wing chair between marble
busts of his heroes, Abraham Lincoln and Martin Luther King, Jr.
Obama is ready to rebut criticisms head-on. But the questions today
do not pose much of a challenge, beginning with standard fare about
the state of the economy he inherited and Republican obstinacy that,
the president notes, reared up a day before his inauguration even, when
he learned that the Republican Caucus would vote as a bloc against the
Excerpted from Confidence Men by Ron Suskind Copyright © 2011 by Ron Suskind. Excerpted by permission of HarperCollins. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Meet the Author
RON SUSKIND is the author of The Way of the World, The One Percent Doctrine, The Price of Loyalty, and A Hope in the Unseen. From 1993 to 2000 he was the senior national affairs writer for The Wall Street Journal, where he won a Pulitzer Prize. He lives in Washington, D.C.
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Ahhh, it’s an election year and time for politics. My first dive was into Ron Suskind’s Confidence Men and it was amazing. Summarizing the early years of the Obama presidency, the book contrasts the hopes and desires of the young president with the soul-crushing realities of mismanagement and incompetence. Although, I didn’t always agree with Suskind’s premise of the self-destruction of males in powerful positions, there was plenty of research to back it up. From the way President Obama heeded to the male dominated Wall Street bankers, to his exclusion of women in some of the administration’s most serious decisions, the gender issues were presented fairly and without bias. More than anything, the book portrayed the president’s leadership style as bucking major decisions to others, mostly the alpha males in his staff. Likewise, his inability to confront those underneath him, such as Timothy Geithner and Rahm Emanuel, resulted in poor compromises and the inability for any real change. It’s no accident that the book opened with a portrayal of Elizabeth Warren, who seemed to embody the reformer that the public desired, and closed with her being denied a role at the Consumer Protection Bureau that she was instrumental in creating. Suskind presents a superb historical analysis of the challenges of this presidency and is uncompromising in pointing out its flaws. And unlike most of the garbage that passes for political analysis, which is really just partisan hackery, Suskind sticks to the facts, which are neither kind to the Democrats nor the Republicans. A must read for anyone interested in modern politics.
Having finished another book that provided a good overview of the financial crisis of 2008, I wanted to look at this era from the political side. "Confidence Men" uses the campaign and first two years of Barack Obama's presidency as this vehicle. The interaction of Wall Street and Washington is interesting, though, to get the most of this tale, I think you need understanding of the financial and governmental issues that drove the crisis. "Confidence Men" comes to similar summaries of the causes, but a book like "The End of Wall Street" really helps to illuminate the arcane financial instruments and associated regulations much better than does this book. The greatest achievement of this book was the story of just how incompetent the Obama White House was during it's first two years in office. While it is easy to look at the major legislative landmarks of this administration - health care reform and financial reform - and cringe at the governmental overreach into our freedoms and economic liberties, the behind-the-scenes story told by Suskind makes you realize that we should be thankful that, as Obama and many of his advisors wanted, it could have been far worse. Tim Geithner is virtually a hero for standing in the way of socialistic measures such as nationalizing banks, a move that greatly appealed to Obama. A key reason this and other "failures" from the perspective of the left occurred was, as demonstrated aptly by Suskind across the first two years of the administration, was a complete and utter incompetence of leadership and management on the part of Barack Obama. This should not be surprising given his near total absence of executive leadership experience coming into the White House. Though the Democrats had a lock on both houses of Congress and the White House for well over a year, the left failed to capitalize on this, largely because of a blessedly dysfunctional White House where, as noted by one senior staff member, "no one was home." Granted, many rivalries and ambitious staffers played roles in these short-comings, a failure of management allowed these obstacles to be significant stumbling blocks. Overall an interesting read about the linkages between Washington and New York during a pivotal era for our nation that also highlights, from an author that cannot be considered a "conservative writer," the numerous failings of President Barack Obama that most of us with our eyes and ears open have intuitively known to be the case.
Living in hedge fund heaven, I read every book on the financial crisis. Finally I read the book with interviews with those on the very inside. Finally, the facts reported comported with the actions taken or not taken in public since the election in '08. Finally saw the sad, depressing truth about how the White House has done little and the Treasury has protected and reinstated the state of play that led to the crisis. All one needs to do is read the summary on pages 405-407. So depressing for the future and any hope.
An excellent writing about the people in and around government and their influence.
I was expecting some kind of balanced view of "Inside the White House" but found just the usual liberal bias. That is, as far as I read---I quit reading it about 1/3 of the way through because I found it so boring.
Susskind does an in-depth reporting of the current administration's policy steps and missteps. It certainly details the "inside baseball" aspects of policy-making, and the dangers of having a chief executive without executive experience. For those details, it is (barely) worth reading. However, Susskind portrays the administration's failings as largely a failure to execute on priorities in major policy sectors (health care, financial reform, stimulus). But he accepts the priorities as worthy without examination. For example, he would have increased the use of evidence-based medicine in the health care bill, but without any skepticism that such a program depends as much on implementation as concept--the idea that government can function as a major force for cost-control is left unquestioned. The lack of fact-checking is well-documented in other reviews...I can only add that I was amused by his misstatements about Enron, and the role and functions of the derivatives markets. Simplistic and ill-informed, to put it mildly. If you believe that government is about "the greatest good for the greatest number", as Susskind does, and that the major failing of this administration is to implement more spending programs and centrally planned regulatory schemes--this is the book for you. If you're skeptical of big government, believe that government exists to safeguard individual rights and provide basic infrastructure, and aware of the central role of government policy in the current fiscal and monetary crisis, you might want to keep looking.