Obama's Incoherent Economic Policy-Making

The only conclusion you can reach from reading Ron Suskind's, an informal history of Wall Street and the White House under Barack Obama, is one of childish rivalries, a lack of decisiveness and follow-through.
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The only conclusion you can reach from reading Ron Suskind's Confidence Men, an informal history of Wall Street and the White House under Barack Obama, is one of childish rivalries, a lack of decisiveness and follow-through -- in short a chapter in White House Amateursville and morale-killing that had nothing to do with the Tea Party Republicans. The tragedy reads like a series of self-inflicted wounds.

Here are my eye-brow raising discoveries:

Obama believed that hiring Larry Summers and Tim Geithner to rein in Wall Street was equivalent to FDR putting Joseph Kennedy, the swashbuckling scion of the Kennedy clan, in charge of the SEC in 1933.

Even as Wall Street and the markets were still bleeding in early 2009, President Obama blithely decided to take on 3 great legislative challenges at once; the economic crisis, the restructuring of Wall Street, and most demanding of all: health care reform. Seemingly, no one tried to stop him from this overweening naive course of action.

In order to get the health care bill through, Obama took off the table "proposals to significantly reduce health-care costs." That's right; The president let the health insurance companies have their way to get the bill through. It's a shameful episode as several leading Senators have told me separately.

Obama did little or nothing to rein in Summers' "imperious and heavy-handed direction of the economic policy process." Nor did he keep after Geithner when the Treasury lagged in following his directions. Obama submitted to Geithner's view on regulation that was described as "bank-friendly." Wall Street was in charge, not Obama.

Here's Suskind on the way it was in the White House. "Decisions were left unmade; policies drifted without direction. It wasn't a matter of intellectual framing... The problem was in guiding the analysis toward what a president is paid, and elected, to do: make tough decisions."

And an extraordinary lack of judgement. Obama believed unemployment was being driven by productivity gains in the economy. Both Summers and Christina Romer -- usually enemies -- knew the cause of unemployment was "clearly deficient aggregate demand." They tried to convince Obama -- but "He wouldn't budge."

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