Where It All Went Wrong

Ron Suskind’s new book and the competing theories for Obama’s collapse.

President Obama. Click image to expand.
Theories about Obama’s failings are currently in season

Why is the White House so desperate to take down Ron Suskind’s new book? The juiciest early leaks from Confidence Men, Suskind’s history of the Obama economic team’s first shambling years, have been dribbling out for years. The White House as a “boy’s club”? ABC News was there in 2009. Larry Summers belittling Christina Romer? Jonathan Alter, no enemy of the administration, had that in The Promise, published in 2010.

Still, it is Ron Suskind who gets a full-on rebuff from the White House press secretary—Jay Carney accusing the author of lifting from Wikipedia! In 2011, shocking tales about What Went Wrong for Obama have become the norm. Confidence Men wouldn’t bruise so blue if the White House hadn’t spent the last several months reading theories of how its decisions have wrecked the economy and, not incidentally, the Democratic Party.

This season of wistful Obama time-warping was kicked off by two articles. The first: Frank Rich’s July 3 cover story in New York, accusing the president of missing a “true populist moment” and failing to prosecute Wall Street crimes. The second: Drew Westen’s Aug. 6 New York Times column about the president’s missing “passion.” All other What Went Wrongs flow from these two epics. (Sorry, Taibbi.) Suskind’s book is the third epic and the one that makes the most sense. Examine the three big What What Wrong arguments and you see why.

Why didn’t he tell more stories?

Westen, a professor of psychology at Emory and author of The Political Brain, focused on rhetoric, diagnosing Obama the way Westen has diagnosed Democrats for years: Obama didn’t tell stories. He didn’t name villains. Westen suggested a speech:

This was a disaster, but it was not a natural disaster. It was made by Wall Street gamblers who speculated with your lives and futures. It was made by conservative extremists who told us that if we just eliminated regulations and rewarded greed and recklessness, it would all work out. But it didn’t work out.

“He really bungled it in 2009,” muses George Lakoff, the influential linguistic adviser to Democrats. “He didn’t understand how communication works.” A million forehead-slapping progressives read Westen, wept over their coffee, and asked why Obama never did this. Well, at the crucial moment, he did. And there were a lot of crucial moments. On Jan. 29, 2009, he called Wall Street bonuses “shameful.” He again criticized high executive compensation on Feb. 4. In a speech about housing on Feb. 18, he complained about “dishonest lenders who acted irresponsibly.” Before a joint session of Congress on Feb. 24, he said: “This time, CEOs won’t be able to use taxpayer money to pad their paychecks or buy fancy drapes or disappear on a private jet.” On Feb. 25, he said that “executives who violate the public trust must be held responsible.” In a town hall on March 18, a town hall on March 19, a press conference on March 24, and a town hall on March 26, he condemned … well, you get the idea. The point is, he thwacked de-regulation and Wall Street almost weekly in his first three months.

One former White House adviser tells me that Westen’s column hit home because Obama could have hit harder. Sure enough, when he attacked business greed, Obama liked to use a particular phrase—”Wall Street and Washington”—to name the enemy. That was less direct than Westen suggested, but it was also accurate. No fair description of the crisis could leave out the role that swollen and crooked Fannie and Freddie played in letting it happen. Obama basically gave the speeches progressives wanted him to give, but presidential speeches don’t matter like they used to.

Why didn’t he work around Congress?

This critique brings the right and left together in song. “Nobody—and I mean nobody—was talking about how weak the presidency supposedly is before Barack Obama was inaugurated,” wrote Salon’s Glenn Greenwald in August. Obama let the stimulus be “larded” by Congress, wrote Michael Barone. Obama left the health care bill up to Congress, which led to Sen. Max Baucus blowing deadline after deadline. There was supposed to be a bipartisan Baucus bill by May 15, 2009. That bill came out of committee on Oct. 13. The slow-walking of health care reform meant that Scott Brown could campaign against it, win, and end the brief era of the Democratic supermajority in the Senate.

This is a better theory of failure than Westen’s. Still: How could Obama have prevented it? Excellent question. The stimulus bill had to be drafted while the president’s administration was in transition, and the bill that passed was bigger than Congress originally formulated. The congressional delay over health care was a disaster, but the bill had to move through three committees in the House and two in the Senate. And Republicans like to point out that the bills they opposed, such as the stimulus, started off with high approval ratings, but became toxic because they denied their support for them and because the economy wasn’t improving.

Could Obama have handled the Republicans differently? That’s one gripe that veteran Senate and White House Democrats, even the ones who agree with the eventual policies that were adopted, have in common. Suskind captures a White House naiveté about Republicans, they say, that rings completely true. Eric Cantor and Mitch McConnell had sworn to deny Obama any bipartisan cover, they say.

Mitch McConnell’s communications director, Don Stewart, does not exactly put this claim to rest when talking about the stimulus bill. “Instead of starting with a bill that had wide support,” he says, “they started with a bill that had only Democratic support and thought they were being clever by adding on to it. They served Brussels sprouts instead of ice cream, and put sugar on the Brussels sprouts.”

Why did he appoint those schmucks?

This is the question sending people out to buy Confidence Men. The president chooses his staff and Cabinet. He could have nixed their bad decisions. He hired the wrong people; they made the wrong decisions; the presidency was lost. “Instead of indicting the people whose recklessness wrecked the economy, he put them in charge of it,” wrote Westen. Suskind confirms this with a killer quote from now-retired Sen. Byron Dorgan of North Dakota, who did his best Charlton Heston war cry at a December meeting: “You’ve picked the wrong people. I don’t understand how you could do this. You’ve picked the wrong people!’

Would another Democratic president have done any better? Two weeks after Drew Westen’s column appeared, Rebecca Traister published a companion piece in the Times magazine: an alternate history of the Hillary Clinton presidency that liberals were missing out on. Traister gave up on the fantasy as the words spilled out, admitting that “her economic team probably would have looked an awful lot like Obama’s.” Former Clinton strategist Mark Penn, who responded to Obama’s push yesterday by warning of “class warfare,” makes Traister’s case for her. Neither of the Democrats’ credible 2008 candidates was ready to be a populist.

What went uniquely wrong for Obama? The players—including the president—botched too much of the policy. The shudder-inducing bits of Confidence Men come when the team is too optimistic about how its policies will play out. The confidence allows them to move on too quickly. It seeps into every other mistake. Westen-approved speeches wouldn’t have solved the problem.

Here’s a case in point. In January 2009, before the Obama administration took office, Congress had to vote on approving the second half of TARP. The vote was going to be dicey. So, Summers was dispatched to tell Congress that “resources of $50-100B” (that’s billion) would be committed to reducing foreclosures and restructuring bankruptcy laws. That soothed a lot of nerves about the millions of mortgages that would come due in 2009 and 2010. And once the Obama administration took office, Democrats led by Sen. Dick Durbin took point on “cram-down” legislation that would have allowed bankruptcy courts to renegotiate the terms of mortgages.

Alas. According to the CBO’s report on TARP from the end of 2010, only $12 billion ended up being spent. The cram-down legislation never passed, as 12 Democrats broke with Durbin. As Mike Lillis reported at the time, Obama had made no public statements in support of Durbin’s bill; there were no reports of White House pressure for votes.

If Suskind is right, Obama’s collapse has had nothing to do with storytelling. It has more to do with Congress, but there was little the president could do to reverse the Senate’s long march toward supermajority requirements for every bill. With all of those structural problems to deal with, Obama picked the economic team that business and political elites couldn’t have been happier with. And they didn’t know what to do.