Tuesday, August 22, 2017

Book Review: 'Confidence Men' by Ron Suskind

Two stories are intertwined - the ascent of Barack Obama and the crisis on Wall Street. One might say that they are incestuously intertwined. Here in Eastern Europe we have an expression "government capture" to describe what happens when the oligarchs own the government. Barack Obama was ill-prepared to negotiate with Wall Street. They had the money and the expertise.

Suskind is kinder to Obama than other people who write about him, especially as his presidency appears to be sinking. Suskind takes at face value that Obama wrote Dreams of my Father and Audacity of Hope. He appears to believe, as other liberals do, that Obama is a genuinely smart fellow; that he rose to the heights he achieved on his own merits. Two books which challenge these hypotheses are "Deconstructing Obama" and "America's Half Blood Prince." The reader will come away from reading Suskind's book with a strong sense that the liberal establishment very much wanted Obama to succeed and championed him in every possible way. One senses that Suskind is, or at least was, in this camp. The reader should at least raise the question in his own mind about the degree to which they were willing to overlook and suppress negative data points about their man.

One of the strengths of the book is a close-up look at how legislation is made. In this instance it is the healthcare reform bill, which transmuted itself into healthcare insurance reform; the Wall Street bailout and reform (in this case, actually not) of the regulatory oversight bodies; and the questions of balancing the budget. Gary Gensler, one of the white hats in this story, makes a marvelous analogy of shepherding a group of gazelles across the plains through packs of ravenous lions, hyenas, panthers and whatnot. It is success if one gazelle makes it.

The gazelles are analogous to good ideas being put into law. Suskind favors forcing transparency into the turbid world of derivatives trading. He favored separating traditional banking, which the federal government has an interest in bailing out, from proprietary trading. He lionizes people who really wanted to contain health care costs, fighting against the healthcare industry which has huge vested interests in perpetuating a lack of efficiency. His heroes in doing this are people like Elizabeth Warren, apparently soon to be a senatorial candidate in Massachusetts, and even a few Wall Street characters like Larry Fink. These are the gazelles; few of their initiatives survived the march past the predatory lobbiests, vested interests in Congress, and competing interests in the executive branch.

The book is not as negative as its initial hype would lead you to believe. He quotes Larry Summers as saying that the senior staff were "home alone" with no adults in charge at the White House. However, he so thoroughly discredits Summers' performance that whatever quotes about Obama he attributes to Summers do not matter.

Suskind is a good craftsman with words. His description of the economic meltdown is very nicely done, with some nice turns of phrase. Many other books have been dedicated to the mortgage debt crisis. I recommend "The Big Short" as a very readable summary of the situation, one which goes somewhat deeper into its mechanics than this book. The beauty of this volume is the connection that it draws between, as the chapter is titled, "The Two Capitals," that is, the financial and the political capitals, New York and Washington.

Editor's note: This review has been published with the permission of Graham H. Seibert. Like what you read? Subscribe to the SFRB's free daily email notice so you can be up-to-date on our latest articles. Scroll up this page to the sign-up field on your right. 

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