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Suskind: Obama was too conciliatory during financial crisis

Steve Chiotakis Oct 4, 2011

Suskind: Obama was too conciliatory during financial crisis

Steve Chiotakis Oct 4, 2011

Steve Chiotakis: President Obama’s got a couple of economic plans he’s touting. Trade deals with Colombia, Panama and South Korea — and a near-half trillion dollar jobs package. The president’s been more forceful lately — a change from what critics say was too conciliatory a tone with his political opponents.

But journalist Ron Suskind’s charges in his new book “Confidence Men,” Mr. Obama was even too conciliatory with his own economic team in the midst of the financial crisis. Ron Suskind, welcome to Marketplace.

Ron Suskind: Nice to be here.

Chiotakis: I want to talk about one of the things you allege in the book — that President Obama asked his Treasury Secretary Tim Geithner to put together this breakup plan for CitiBank — too big to fail, right? So we got to break this thing up. So why didn’t that happen?

Suskind: The president was trying to sort of summon his Rooseveltian moment just a few months into his term. He felt these big banks needed to be taken down — the overhang of toxic assets was causing fear. You know, Tim Geithner was not in favor of this. He actually was kind of the lone man standing on it; even Larry Summers who tends to ally himself with Geithner on a first-do-no-harm principle–

Chiotakis: — this was the National Economic Council director, right, Larry Summers?

Suskind: That’s right, chief economic adviser — he was even with the president on this. But Geithener held his ground and didn’t really pull together the plan the president wanted. The president now says, I think forcefully, that those days are over. He has the team he needs, he’s the more forceful president, having evolved.

Chiotakis: Larry Summers is quoted as saying “we’re home alone, there’s no adult in charge.” Was that, in other words, saying President Obama didn’t have a grasp of what was going of what was going on in his own White House?

Suskind: Larry Summers responds to the “home alone” riff saying that look, we had five times as many problems, we didn’t have five times as many people — it was a time of crisis. This “home alone” riff by Summers ends up — as is often the way with Summers — becoming kind of a framing issue, where people do fear rightly that there is no one in charge that can control these unwieldy forces in this global economy that’s buffeting the United States.

Chiotakis: The debt ceiling debate is where this book ends, and of course the president’s push for job creation — the American Job Act. Is the president more engaged and more knowledgeable about what’s going on?

Suskind: There’s no doubt he’s more knowledgeable, as to his acuity and knowledge of economics. Now having said that, when you look at the jobs package, it tends to be mostly off-the-shelf stuff. I think some people were disappointed.

And I think that even now people are saying “what more have you go in the tool kit?” The president, for instance, was very, very strongly in favor of a financial transaction tax. There are policies like that — things the president wanted to do, that I think now he might unveil again to say, let’s do it now.

Chiotakis: Ron Suskind, author of “Confidence Men“, Ron thank you.

Suskind: My pleasure.

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