On election night six years ago, I wrote The Tragedy of the Bush Administration. In it, I despaired that:
“Once in a generation, the stars align for a political leader. There is this perfect moment "“ too often based on some enormous danger of long-lasting consequences for generations to come.
Once every half century, the perfect combination of leadership and threat, of challenge and response meet. The leader "“ imperfect, fallible, yet ready to rise to the occasion "“ grabs the brass ring.
Think Winston Churchill fighting the global threat of the Nazis, Thomas Jefferson writing the Declaration of Independence, JFK's dare to send a man to the Moon . . .”
The rest of that piece went on to lament how George W. Bush was granted that rare opportunity to grab the brass ring, to rise to the occasion — and failed miserably.
Here we sit, not half a century later as originally surmised, but a mere six years later. I once again find myself lamenting the opportunities wasted by a US President in response to a great cataclysm. In the case of President Obama, it was his response to the financial crisis. The opportunity for greatness presented itself, and was . . . ignored.
The President was swept into office on a wave of Anti-Bush sentiment. The stock market was in freefall, credit was frozen, the recession already 13 months old. As Rahm Emanuel said, “Never waste a good crisis.” A strong leader would have taken advantage of the moment, of the opportunity.
And what an opportunity it was: Over the prior 3 decades, the economy of the United States had been “financialized.” We became much more involved in ‘financial engineering’ than any other more productive engineering. Along with this financialization came increased revenue for the biggest banks and investment houses; greater profits, influence, and power. A wave of deregulation swept over the sector, freeing the banks from meddling oversight.
Thus, as the finance sector got larger and more important, it was paradoxically under ever less scrutiny, supervision, and regulation. With that new found freedom from oversight, the banks promptly blew themselves, and the global economy, to smithereens.
This was the environment in which the President came into office. What did he do in this scenario?
"¢ He appointed two of the architects of the crisis to major White House economic positions: Lawrence Summers as CEA Chair, and Timothy Geithner as Treasury Secretary.
"¢ He made the enormous tactical error of focusing on Health Care Reform, while the banking crisis was still in full flower.
"¢ He failed to marshall adequate resources to respond to the worst economic recession since the Great Depression.
The first item damned him to a mediocre economic team, one that failed to respond strongly to the banks that created the crisis. The second error earned him the enmity of the opposing party. The third error was political, and likely cost him the House, and possibly the Senate.
The great irony is that the man who ran on the campaign slogan of Change failed to deliver it in any meaningful way — at least, where the public wanted it — in getting the reckless runaway banks under control, and in stimulating the moribund, post-credit crisis economy.
I hasten to add, that from a political perspective, the President was a wimp. Had Al Gore been President from 2000-08 (and controlled Congress), the next GOP President would have flailed him for the recession and crisis bank relentlessly. Hell, the GOP still beats Jimmy Carter like a piñata. Once Obama took office, that was pretty much the last we heard of the Bush recession. The public actually forget who authorized TARP, who bailed out Citibank, BofA, AIG, Fannie Mae, Bear Stearns, etc.
This amounted to political suicide.
Critics have debated Obama’s hands off approach to passing National Romney-Care, his giving up (?!) the winning issue of partial Bush tax cut extensions. I am perplexed as to why he would not force a full confirmation battle over the charming midwestern Elizabeth Warren as new Consumer Financial Protection Bureau chair — Bnaks versus your grandma.
But as far as I am concerned, those are secondary political issues. To me, his presidency began its fatal downward spiral once he allowed Robert Rubin to determine his initial financial appointments. By passing over more pragmatic candidates not tied to banks and Wall Street, the president missed his opportunity to rise to greatness.
The opportunity existed to get the renegade banks under control — to reduce their leverage, their recklessness, and to get their hands out of the taxpayers pockets.
That opportunity was squandered, and Obama ended up as a defender of the banking status quo. It is where his presidency could have achieved lasting greatness, and instead was turned into just another elected official, who over promised and under delivered . . .
Barry,
I’ve been making the same argument, to deaf ears. Others believe there is still a chance for Obama. But we know better. He destroyed his legacy and worse, he hurt America by not taking decisive action.
The problem is that the public does not understand that his major failing was appointing Geithner and Summers. I cannot understand how this intelligent leader was bamboozled by the likes of them.
A tragedy for all of us.
http://blog.mdwoptions.com
Amen, Barry. The die was cast when he surrounded himself with the usual suspects who helped get us into this mess. The final nail was Feb/March ’09 when he formalized the decision to double down on the Bush bailouts.
Good Comments, BR.
It is a Tragedy. So much time wasted..with so much that needed to be done. With his huge staff it shouldn’t have been “impossible.” Yet it seemed from the beginning that those who would serve in his Administration had been “hand picked by someone” from the get go for a “smooth, seamless transition.”
I don’t know if he was “suckered” or was “willing.” I guess the Historians will parse that one out…long after those who suffer from the deregulation since Reagan are gone. Who will be left to read? We have to hope the folks who “BROUGHT THE CHANGE” will be left.
Hope….. Man…so much work to be done. But, at least we now see how it all works and so much has been revealed that perhaps we aren’t still living and accepting “Smoke and Mirrors.”
Roll up our shirt sleeves and let’s get AT IT!
A proper epitaph for this administration.
Good analysis, Barry.
Unlike some who would ascribe sinister or conspiratorial motives to Obama’s failings, I chalk them up to inexperience, ineptitude, and naivete. Good campaigners do not necessarily make good leaders. We’ve seen it time and time again. It’s a different skill set entirely.
Start dealing in reality, BO – the Republicans do not LIKE you and never will. Nor will they work with you toward goals which will ultimately be seen as your accomplishments, not theirs. Get over it and start to govern. You may refer to the Clinton playbook….
Very good summary. It also shows the tremendous hold special interests have on the politicians. So much private money flowing through DC has completely corrupted politics. Take private money out of politics, have publicly financed elections and institute across the board term limits and then there is half a chance of getting elected representatives that will do the right thing.
By the way, don’t forget Obama reappointed Bernanke. That was unforgivable. It’s time to put a non-economist in charge of the Fed (or better yet, just get rid of it).
Sadly, I have to agree with most of this. But if Mr. Obama was going to get any kind of health care legislation, could he wait? The watered down thing we got just barely made it with Democratic majorities in both houses – and losing the house seemed likely even in Jan 2009. But to do health care you have to do the big parts all at once: Everyone has to be insured, no one can be denied coverage, and subsidies for those who can’t afford coverage. This may have been Obama’s only chance to get that sort of a bill through.
I am glad you wrote this post. History can be harsh, as in the endless GOP comments on the Carter years. Most times a President gets only one chance to make a tough decision in the moment based on his advising. But I have to wonder if President Obama got another chance to fix a really big problem, would he respond the same way? What if another big set of financial problems came along, how would a split Congress react to back the President’s attempts at strong medicine? Would he really be willing to take strong measures or would it be only more of the same? Two years ago I would have guessed wrong so I am not inclined to guess again…
@Heretic: That’s a fair point if he had thrown more weight into the economy and jobs situation it might have given him more political capital to then tackle the health care issue. Instead he used up his political capital on a health care bill that nobody seemed happy with or truly understood (which made people even unhappier). He got his priorities all mixed up.
Sigh.
He had a great opportunity, he could have pushed the Republicans into a corner and kept at them relentlessly; but it was all “anger accomplishes nothing” “I get it”…no, you didn’t get it Barrack.
I agree that going for national Romneycare was probably a mistake — it should have been a straight-up call for Medicare-for-everyone and damn the torpedoes — but the notion that passing health care reform was a serious tactical error is simply ill-informed: As Krugman notes here at http://tinyurl.com/39vaefj those who make this claim cannot name a single significant economic policy initiative that Obama could have successfully pursued otherwise. In fact those making this argument appear to think that economic policy is more a matter of ‘focus’ — AKA a matter of PR and superficial expressions of ‘caring’ (bleh!) — than it is a matter of actually doing something.
But that fundamental error probably better describes the dysfunctional and declining state of our democracy than anything else: Appearance appears to be trumping actual form virtually everywhere as Reality-TV substitutes for reality and our nation dies the death of a thousand cuts in the process.
Panem et circenses (Juvenal, Satire 10.77"“81), “Bread and circuses:” There are too few citizens devoted to civic duty and too many devoted to being fed and entertained. That is the problem.
Where’s the blame for the media?!?
They’ve reported this as the most expensive election at $4 billion, yet little has been examined about where the money is coming from and what the donors are hoping to get in return. Yet despite the enormous expense, candidates are still lining up to shell out the dough. There’s only one reason they’d do it voluntarily and that’s if there’s a bigger expected payday to come by selling votes down the road. So, dear media,
How much are votes being sold for???
@Chief: The whores in the MSM are on that very money meat wagon as well. Hence, the obvious reasons to not mention it.
Fatally cautious…one can understand keeping Geithner in the thick of the crisis, but not why he’s still there.
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