10 Revelations From A New Book That Have The White House Freaking Out


Confidence Men

The White House is clamoring to shoot down made in a new book by Pulitzer Prize-winning author Ron Suskind, which offers stinging insight into the Obama administration's dysfunctional handling of the economic crisis.

Confidence Men, released Tuesday, is an expose on the bitter rivalries that divided and, at times, paralyzed Obama's economic team. It paints an unflattering portrait of an inexperienced president who lacks the leadership skills to get his staff in line.

The criticism couldn't have come at a worse time for Obama. Already under increased scrutiny about the administration's economic policies and the president's ability to lead, White House officials are pushing back hard against Suskind's book. In a media blitz this week, administration officials have listed over a half-dozen minor inconsistencies, factual errors, and spelling mistakes.

Treasury Secretary Tim Geithner even provided an on-camera denial to one of the book's more shocking claims, and Press Secretary Jay Carney went so far as to accuse Suskind of "lifting" a passage in his book from Wikipedia.

Suskind is standing by his book, telling talk show hosts and reporters that the administration is getting defensive because they are worried by some of his revelations.

After reading the book, it's easy to see why. There are a more than a few allegations in the book that should have the White House nervous.

Obama is a terrible manager

Suskind makes the case that Obama picked the wrong people to guide his administration's economic policy. The team, anchored by Treasury Secretary Tim Geithner and National Economic Council director Larry Summers, was rift with acrimony and divisions.

At one point, Obama's friend U.S. Sen. Byron Dorgan (D) warned the president-elect: "You've picked the wrong people. I don't understand how you could do this! You've picked the wrong people!" ??

But as the team broke down after a series of bad decisions, Obama failed to nip the problem in the bud. Instead, he let himself be lectured and dictated to, particularly by Summers, who formed an early alliance with Chief of Staff Rahm Emanuel. In this leadership void, members of his economic staff — including Council of Economic Advisors chair Cristina Romer and budget director Peter Orzag — quickly became more concerned with one-upping one another than with guiding the country out of the financial crisis.

The whole economic team knew the stimulus was doomed to fail

Passed within a month of Obama's inauguration, the stimulus bill was not a grand policy proposal, but a "hodgepodge," of competing and unresolved ideas being bounced around by the President's new economic team. The administration saw a hole in the economy and wanted to fill it as quickly as possible, without much thought as to how the money was being spent.

Conventional wisdom now holds that the stimulus wasn't big enough — states used the money to plug holes in their budgets and tax breaks went to pay down debt. Obama admitted as much in 2010, but economists were sounding the alarm long before the bill passed.

Suskind's revelations are particularly salient because not much has changed in the Obama administration on this point. The White House is still yielding and deficit hawks, while struggling to make a case for stimulus spending.

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But Paul Krugman was the voice inside Obama's head

New York Times columnist Paul Krugman, a Noble Prize-winning economist and Summers' rival, was an early and vocal critic of Obama's stimulus plan.

Although he was shunned from the president's economic policy staff, Suskind writes that Krugman occupied an important place in Obama's deliberations about the recovery.

"Each morning at the economic briefing it was like we were debating Krugman," an aide told Suskind. "Clearly Obama was reading Paul's columns and related on materials...and it made sense to him as both analysis and a guide for action."

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