Now Grabell doesn’t doubt that the stimulus created some jobs and boosted growth. But the White House promised much more: It promised a return to prosperity. Vice President Joe Biden famously said the stimulus would “literally drop kick us out of this recession.” But Grabell concludes that the stimulus “failed to do what America expected it to do — bring about a strong, sustainable recovery. The drop kick was shanked.” It’s hard to see how a vastly larger stimulus, unless perhaps nearly all the additional money was in the form of tax cuts, would have produced a vastly improved result.
But the stimulus-squashing Summers and debt-obsessed Orszag weren’t the only advisers who let Obama down. Suskind paints Geithner as the useful idiot of Wall Street. Confidence Men opens with a White House press gathering at which Obama announced the formation of the new Consumer Financial Protection Bureau. On Obama’s left was Elizabeth Warren, author of the new agency and a liberal folk hero for her anti-bank tirades in the media. On Obama’s right was Geithner, author “of a string of efforts over the past year to neutralize Warren . . . and render her politically inert.” Indeed, she was never appointed to head the new agency and is now running for U.S. Senate in Massachusetts.
Geithner’s biggest political play, Suskind writes, was ignoring a directive by Obama to plan for a government takeover and restructuring of Citigroup in early 2009. Geithner’s team at Treasury simply ignored the president, a move that showed how the “young president’s authority was being systematically undermined or hedged by his seasoned advisers . . . a matter perilously close to insubordination.” Geithner has denied deep-sixing Operation Nationalize Citi. But the overall picture of staff squabbling and dysfunction is about what you might expect in an administration whose leader had never really led anything before coming to the Oval Office.
Both books try to complete their character arcs on a high note, showing Obama finally taking charge, no longer leading from behind. For Suskind, it was Obama’s pushing the payroll-tax cut at end of 2010 even though it meant enraging his liberal base by extending the Bush tax cuts for another two years. “The future was unknowable. But at least this month, as Christmas neared, there seemed to be a president in the White House.” For Scheiber, the $500 billion American Jobs Act, Stimulus 2.0, proposed in September 2011, is proof of Obama’s awakening: “The key mistake of the first stimulus — really of his entire economic agenda — had been to undershoot. Now he was refusing to make it again.”
So, in the end, the problem with the Obama presidency and its response to the Great Recession lay, according to Scheiber and Suskind, at the feet of aides who prevented Obama from being Obama. But now that the president has been awakened and empowered — note his election-year embrace of class-warfare populism — a second Obama term may be far more ideological than the first. Scheiber gives a taste of what Obama being his true self is like:
Energy was a particular obsession of the president-elect’s, and therefore a particular source of frustration. Week after week, Romer would march in with an estimate of the jobs all the investments in clean energy would produce; week after week, Obama would send her back to check the numbers. “I don’t get it,” he’d say. “We make these large-scale investments in infrastructure. What do you mean, there are no jobs?” But the numbers rarely budged.
Ideology over economic reality: That may be the new normal for America.
– Mr. Pethokoukis is a columnist at the American Enterprise Institute and a contributor to CNBC.