Confidence Men: Wall Street, Washington, and the Education of a President, by Pulitzer Prize winner Ron Suskind, is the work of the first author who had inside access to the Obama White House. Suskind doesn't waste his opportunity; he names names of culprits in the greatest failure of the American financial system since the Great Depression and describes how they worked to enrich themselves while building a bubble economy that produced little underlying value.
The book spotlights Wall Street flimflam artists whose venal hawking of credit swap derivatives of sub-prime mortgage instruments led to the Great Recession of 2008 (a calamity which may yet prove to be only the first dropped shoe; the second "shoe" being an even more devastating financial collapse up the road). It reveals how the same charlatans--whose Too Big To Fall banks rescued with public money--are engaging in the same flimflam today rather than making loans to American businesses to get the economy moving again.
But in some ways, the truer villains in Confidence Men are the bloodless, cold-eyed operators inside the Obama Administration who hijacked for their own ends the Obama presidency and the hopes of millions of voters. Here again the author names names--White House Chief of Staff Rahm Emmanuel, Treasury Secretary Tim Geithner, and Director Larry Summers of the National Economic Council.
Geithner was jaw-droppingly insubordinate, ignoring Obama's order to the Treasury to consider breaking up the banking behemoth, Citigroup. Geithner also stifled Elizabeth Warren's repeated attempts at bold financial reform--reforms that would prevent devil-may-care Too Big Fail banks from piling up debts far in excess of the government's revenues, thus posing not only the clear and present danger of another bailout but also the possibility of a Greece-like insolvency for the United States.
But, if possible, Summers was worse than Geithner. White House budget chief Peter Orszag quotes the imperious Summers (the temperamental, misogynistic ex-president of Harvard) as saying of them and the Obama White House, "You know, Peter we're really home alone. There's no adult in charge. Clinton would never have made these mistakes." Later, Orszag tells Suskind, "Larry just didn't think the president didn't know what he was deciding," he was "likely saying" flat-out, "I know more than the president."
Author Suskind documents how push-back from Emmanuel, Summers and Geithner led to interminable "re-litigation" of policy choices, resulting in sputtering decision-making, with no real jobs program produced in the first two years of the Administration and botched opportunities for transformational change in health care coverage and cost containment and financial reform.
And if anyone still doubts that money is corrupting the American political system, this book dispels the myth. Lobbyists for Wall Street bankers, Big Pharma, and the insurance industry are seen working like termites, boring into the timber of governance, hollowing out policies into a shell of what they should have been and could have been in earlier age when money wasn't all-pervasive in politics.
Finally this is a book about a young man in the Oval Office--a good and virtuous man--who inherits two wars and the biggest financial calamity since the depression and who, rendered insecure by warring advisers and inexperience, forgets his gift for connecting with ordinary people and instead, tragically, relies on wonkish, technocratic half measures.
Obama's men (Axelrod, et al) hate this book, but it is axiomatic that truth hurts.
The book has failings that frustrated this reader. Suskind lacks the skill of, say, a Michael Lewis (The Big Short and Boomerang) to explain in lay terms the exotic and reckless securities Wall Street connived to invent, or how lightly regulated bankers--not the Republicans' favorite whipping boys, Fannie Mae and Freddie Mac--were (and still are) the cause of our unstable financial system. Confidence Men is oddly haphazard in its organization, too, coming from an author with such a pedigree. In a large sin of omission, the author introduces us to hundreds of figures in this saga but, once identified, wrongly assumes the reader will remember exactly who they are throughout the remainder of the book. A simple table of characters would have been helpful.
Yet Confidence Men is an extraordinarily important work. In this election year, it will help readers understand who is spinning fanciful tales about our deep and still-present financial dangers (the Tea Party) and who is dealing with reality (Elizabeth Warren). Which is important, because rarely has the U.S. so greatly needed well-informed political consumers.
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