Tim’s Bay of Pigs
by digby
Perhaps you’ve seen this already:
A new book offering an insider’s account of the White House’s response to the financial crisis says that U.S. Treasury Secretary Tim Geithner ignored an order from President Barack Obama calling for reconstruction of major banks.
According to Pulitzer Prize-winning author Ron Suskind, the incident is just one of several in which Obama struggled with a divided group of advisers, some of whom he didn’t initially consider for their high-profile roles.
Suskind interviewed more than 200 people, including Obama, Geithner and other top officials for “Confidence Men: Wall Street, Washington, and The Education of A President,” which will be released Sept. 20. The Associated Press purchased a copy on Thursday.
The book states Geithner and the Treasury Department ignored a March 2009 order to consider dissolving banking giant Citigroup while continuing stress tests on banks, which were burdened with toxic mortgage assets.
In the book, Obama does not deny Suskind’s account, but does not reveal what he told Geithner when he found out. “Agitated may be too strong a word,” Suskind quotes Obama as saying. Obama says later in the book that he was trying to be decisive but “the speed with which the bureaucracy could exercise my decision was slower than I wanted.”
Geithner says in the book that he did not recall that Obama was mad at him about the Citigroup decision and rejected allegations contained in White House documents that his department had been slow to enact the president’s plans.
“I don’t slow walk the president on anything,” Geithner told Suskind.
“The Citbank incident, and others like it, reflected a more pernicious and personal dilemma emerging from inside the administration: that the young president’s authority was being systematically undermined or hedged by his seasoned advisers,” Suskind writes.
I haven’t read the book but Susskind is a highly reputable reporter with a strong record. I have no reason to suspect his facts. So what would this mean? So far, as one would expect, liberals are gathering into factions. The defenders are saying it’s all hogwash, don’t believe a word of it and the super critics are saying it’s a whitewash, excusing the President’s leadership by saying it’s his advisers who have led him astray.
As I said, I haven’t read the book although I plan to. But if this passage is correct, I don’t think it excuses the President at all. What it does is paint him as somewhat weak in his early days in office, which I don’t find surprising. It’s reminiscent of another young president who got swept along by the existing hierarchy and approved a fateful assault called the Bay of Pigs. The question is what happened next. In Kennedy’s case, he learned to be extremely skeptical of the establishment and he relied on different advisors before making such decisions in the future.
It must mean something that Tim Geithner is almost all that’s left of President Obama’s original economic advisers. The only logical answer is that in spite of the above anecdote the President came to depend on Geithner to the exclusion of the others — and that is very different from how Kennedy reacted. I’ll be fascinated to read the book to get a sense of how that happened.
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