Key passages from "Confidence Men: Wall Street, Washington and the Education of a President."
(The type in italics explain context of passages. Type in bold highlight quotes that have received most news coverage or interest from scholars)
In the campaign, Obama had been guided by a robust, bipartisan group of advisors- such as Volcker, Reich, Stiglitz, Wolf (UBS chief) and Donaldson (SEC under Bush)- a team that matched Obama's tough, soaring rhetoric about the taking on Wall Street and changing the country's direction. A few weeks into the transition, he'd discarded the team that helped him get elected in favor of "Team-B": a set of Clinton-era advisors who were all Wall Street protectors and apologists. In the fall of 2008, their leader, Bob Rubin, was actually offered a future job in the West Wing (which became untenable once Citigroup's woes deepened). Team B knew if Obama got into office surrounded by the Volcker-led A-team, Wall Street would be toast. They set up a strategy in the summer of 2008 to place their team in the top jobs and, over the coming months, they won. The administration's four key positions went to Larry Summers, Timothy Geithner, Peter Orszag and Rahm Emanuel. It wasn't an issue of experience. The A-team had as much experience at the Team B. The distinction was in what each team stood for, raising the question of whether Obama ever meant to be an activist President in the ways he'd promised during the campaign.
After trying to tamp down expectations from Grant Park to Inauguration Day, Obama - once in office - tried to step fully into his new job and call for tough action:
"How is this possible that they're paying themselves these bonuses when it was the government that bailed them out!"
"Each morning in the economic briefing it was like we were debating Krugman" said one attendee of the meetings. "Clearly Obama was reading Paul's columns and related materials on this Sweden-versus-Japan split, and it made sense to him as both analysis and a guide for action."
What Obama is up against is a shared stance of both Summers and Geithner that they term Hippocratic risk- "first do no harm"- matched with a free marketeer's philosophy summed up by Larry Summers:
Larry Summers: "One of the challenges in our society is that the truth is kind of a disequalizer," Summers said (standing outside the White House on March 5, the day of the health care summit. "One of the reasons that inequality has probably gone up in our society is that people are being treated closer to the way that they're supposed to be treated."
A decade into the new century, office towers of trademark American companies on both coasts were facing outward, using the cheap labor and lax regulations across the world to make strong profits, which flowed to the top corporate officers at twice the rate of even the 1990's. Meanwhile, they turned their backs on much of what once passed for the U.S.S economy. Yes, shareholders were advantaged, but a full 60 percent of Americans held few or no securities, while the greatest beneficiaries of all were the allocators of capital in the financial services industry. In 2007 this sector accounted for a startling 41 percent of corporate profits, a feat achieved in large part by accelerating the steady inclination toward overseas investment and spreading elegantly packaged debt across the ever more burdened U.S. landscape. The notion that this is the way many Americans "are supposed to be treated" might be seen as a pretty harsh prescription.
Austan Goolsbee-- a rare holdover from the A-team, but only in a staff economist's role in the administration-- proposes tax-on-size for banks.
In an early March economic briefing, Obama steps up and first expresses his view that his administration should take down TBTF banks:
"I think it's time to step up and show what government can do," Obama remarked. "I want to deal with these toxic assets across the entire banking system. Let's do it now. Let's do it right."
Summers and Romer are with him. Geithner disagrees. Obama sets up a meeting for a week hence, on March 15, to hash it out.
SEMINAL MARCH 15TH MEETING ON TAKING DOWN THE TROUBLED TBTF BANKS
The most important meeting of Obama's early presidency came on March 15th in the Roosevelt Room of the White House. Obama had wanted to draw up plans to break up the banks- instead, his team wore down this request to a simpler directive; draw up a plan for restructuring the wayward Citi. That plan would never come to fruition.
The discussion rocked back and forth for two hours. Geithner and the Treasury team versus Summers-Romer and their supporters. Summers characterized Geithner's policy as "watchful waiting," in contrast to the one he and Romer were suggesting, which was more like "necessary surgery that shouldn't be delayed any longer."
Obama says he heard enough, and sides with Summers/Romer, saying he wants to take down the too big to fail banks:
The restructuring of the large insolvent banks, (Obama said), would be a moment when the government could "strike a blow for prudence." It would "begin to change the reckless behavior of Wall Street and show that accountability flows in both directions."
The President took a break to get a haircut and dine with the first family.
Rahm Emanuel waited until the president was fully out of the room and then, after a few moments, he seized the floor. "Everyone shut the fuck up. Let me be clear-taking down the banking system in a program that could cost $700 billion is a fantasy. With all the money that already went to TARP, no one is getting that kind of money through Congress, especially with this AIG bonus disaster." He threw a hard glance at Geithner. "Listen, it's not going to fuckin' happen. We have no fucking credibility. So give it up. The job of everyone in this room is to move the president, when he gets back, toward a solution that works."
Emanuel's now-famous tactical dictum-"never let a crisis go to waste"-actually applied in this case, she felt. Not really to health care, which was more an issue of unsustainable trends than a true crisis. This was different. This was a real financial crisis, extending into the fortunes of everyone in the broader economy. After all that had happened starting with Reagan and deregulation, and three decades of the unfettered markets not dealing with the fundamental needs and hopes of a growing economy, now was the time-maybe the only time-for the government to step in to make crucial repairs. "This was the crisis that we shouldn't let go to waste," Romer said later. "Right there, Rahm killed it."
Obama sat quietly, considering this for a moment. "Well, okay, so we do Citibank and we do it thoroughly and well. That would show everybody that they can trust those guys in government to do a hard job, and do it right. And then we go back to Congress and get the money to do the wider job that really needs to be done."
As the president processed this, Emanuel jumped in.
After nearly seven hours in the Roosevelt Room, the participants saw the weeks of debates ending with two plans. Obama approved a reduced plan to restructure a single, signature institution, Citibank, and gave the green light to Geithner's stress tests. As 11:00 p.m. approached, the president ordered Geithner to quickly create action plans to execute each program, and to keep him posted about progress. He thanked everyone and told them "to go get some sleep."
There was extraordinary bipartisan backlash against the financial industry at this point- from demonstrators outside the houses of AIG executives and Goldman lobbyists to compensation claw back amendments in Congress- all of which left Wall Street in an unaccustomed state of fear.
On March 27th, 2009, Obama asked the CEO's of 13 of the largest banking institutions to come to the White House. Not only had his frustration with the banks subsided, he in turn, offered the troubled institutions sanctuary. The line that, "My administration is the only thing between you and the pitchforks" was widely trumpeted by the President's staff, along with the fact that he only offered the bankers a glass of water. That was misleading. In fact, in this seminal meeting Obama was astonishingly deferential to Wall Street.
- At the same time that Ratner was firing Wagoner, a hundred yards due west, thirteen impeccably dressed men were gathering in the reception room for appointments in the West Wing. They were the CEOs of the thirteen largest banking institutions in the United States. And they were nervous in ways that these men are never nervous.
- "His (Obama's) body language made it very clear that he was the president, he was in charge," said one of the participants, and that he wanted to hash things out-what he felt, what they saw. The discussion moved swiftly across topics, such as the general soundness of the overall system and how to jump-start lending, before it came around to what was on every- one's mind: compensation.
-The CEOs went into their traditional stance. "It's almost impossible to set caps; it's never worked, and you lose your best people," said one. "We're competing for talent on an international market," said another. Obama cut them off.
"Be careful how you make those statements, gentlemen. The public isn't buying that," he said. "My administration is the only thing between you and the pitchforks."
It was an attention grabber, no doubt, especially that carefully chosen last word.
-But then Obama's flat tone turned to one of support, even sympathy. "You guys have an acute public relations problem that's turning into a political problem," he said. "And I want to help. But you need to show that you get that this is a crisis and that everyone has to make some sacrifices." According to one of the participants, he then said, "I'm not out there to go after you. I'm protecting you. But if I'm going to shield you from public and congressional anger, you have to give me something to work with on these issues of compensation."
-No suggestions were forthcoming from the bankers on what they might offer, and the president didn't seem to be championing any specific proposals. He had none: neither Geithner nor Summers believed compensation controls had any merit.
After a moment, the tension in the room seemed to lift: the bankers realized he was talking about voluntary limits on compensation until the storm of public anger passed. It would be for show.
-Nothing to worry about. Whereas Roosevelt had pushed for tough, viciously-opposed reforms of Wall Street and famously said, "I welcome their hatred," Obama was saying, "How can I help?" With palpable relief, the CEOs carried the discussion, talking, easily now, about credit conditions and how loan demand was soft because it should be: businesses were already overleveraged. "We don't want to be making bad loans," said one CEO, as his kindred from the more traditional banks, such as Minneapolis-based U.S. Bancorp or NatWest, nodded. "Much of our business is still old-fashioned lending."
Even among this golden thirteen, there were class divisions. JPMorgan's Dimon, Goldman Sachs' Lloyd Blankfein, Morgan Stanley's John Mack, and Citigroup's Pandit stood atop the global behemoths of Wall Street, making much of their money and their stunning compensation on everything but traditional lending. They ran vast trading and financial gaming operations, focused mostly on the largely depersonalized flows of debt. Although Dimon asked the first question, the Elite Four didn't say much over nearly an hour, especially about the divisive issue of compensation.
-"I think the administration agreed with our view that these crazy congressmen and their proposals to either nationalize the banks or cripple them with heavy taxes or compensation limits would throw the country in a deep depression," said one of the bankers after the meeting. "Lots of drama, but at day's end, nothing much changed."
Nearly a month after his mid-March decision to take down the TBTF banks, Obama discovers in an April Oval Office meeting that Geithner has ignored his order to come up with a plan to unwind Citigroup, that he's been "slow-walked."
-"I'm sorry, Mr. President," (Romer) said, summoning her courage, "but there is no resolution plan for Citi." Obama looked at her, stunned. "Well, there better be!" he said. Romer immediately felt Emanuel's gaze. Something was clearly amiss. When the meeting ended, Emanuel and Summers huddled. A short time later, Summers took Romer aside. "You did something very consequential there, telling the president that there was no plan for Citi," Summers said. "Rahm was incensed that you told him that. That Tim wasn't here to defend himself. But I defended you. I told Rahm, 'She's right!' "
-Treasury would in fact never move forward to carry out the president's wishes about Citigroup, as a potential first step in a wider restructuring of the banking sector.
The whole point of the executive enterprise is to carry forward the wishes of the president. "He's the duly-elected representative of the people. None of the rest of us are," said a top White House official on the subject. "We're there, at least we're supposed to be there, to serve at his pleasure, to carry out his will because he carries the will of the people. Right around this time, you could see that starting not to happen."
-When questioned later about the matter, Geithner initially said that a proposal for possibly closing Citi, as a first step to doing the same for other banks, was never seen as a "real alternative to the stress tests . . . there was no real alternative to the stress tests." The resolution of Citi or other banks was instead an issue to be seriously broached only "if the stress tests didn't work, and they did," and that most of the people in the room on March 15 "don't understand anything of what was happening about the substance of the choice, so they're crafting their memory . . . they're trying to create memory with the benefit of hindsight."
-But in a half-hour interview largely on this matter, Geithner began to reveal the strategic complexities of his "plan beats no plan" dictum. After praising Romer as a fine economist, he said she was of "no value on policy issues" of "financial rescue" and that "Larry and Rahm were the only ones that mattered in the debate. Larry's problem was that he had no alternative, ever," to the stress tests. "He was never willing to commit to an alternative, never came up with an alternative strategy."
-But then Geithner went through the chain of events and meetings on this most portentous issue, saying that the consensus recollection "was largely true," from the president's ardor, starting in late February, to look at alternatives to solely relying on the "stress tests"-the only plan under way at that point. "He forced me and everyone to look at this thing from all angles, chew it over" and make everyone "go through that test: what is the alternative plan? Those who don't like it [the stress tests], what are you for? "
The problem, of course, was that the policy-making horsepower, in this instance, was at Treasury and the Fed, both of which were in concert to push forward a chosen policy that almost every other key person in the government was concerned about, from the president on down.
-"I don't slow walk the president on anything," he said. "People who wanted to do other things often accused me of slow walking, but I would never do that." But Tim Geithner added, with some satisfaction, the battle over restructuring the financial industry "was resolved in the classic way, that plan beats no plan.
"No one else had a plan."
That, of course, is because Geithner refused to draw up the ordered plan on Citigroup for Obama.
Geithner's chosen plan, the stress tests, was discussed in a heated meeting on Easter Sunday:
To precisely predict whether there would be a steady upward trend for the U.S. economy. It was wrong to bet the credibility, and the Treasury, of the federal government on such a prediction. If you got it wrong, you would be missing the best and maybe only opportunity to fix these banks so that credit would begin pumping again, in safe fashion.
At 10:00 p.m. the dispute over whether these stress tests were just the government's version of Kick the Can was starting to slow. Treasury had the upper hand. The tests were for them and the Fed to execute and shape. Gene Sperling left the room and returned with another box of matzo. Geithner, famished like the rest of them, shook his head.
"Don't do that," the Treasury secretary said. "Now we'll end up being here for another hour."
-But, at this point, the subtext was clear. Deep down, it didn't matter how each bank was assessed in the stress test. The fact that each one would be given a "United States of Moody's" stamp, and told how much money the government recommended it raise, meant that anyone who in- vested in a bank should feel confident that they would recoup their losses in the event of a bankruptcy, care of Washington. Being able to sell this assurance in the public markets meant banks would quickly raise enough money to pay back their TARP funds and explore new, commanding heights of profit. Whatever else was happening in the economy, the investment bankers in the room, such as Lee Sachs, could not help but sink into delicious fantasies of how the banks would now be able to earn their way to health and beyond.
-Romer shook her head. She had too much context to feel celebratory at this prospect. "After all that happened over the past two months-much less the last ten years," she said, looking back, the idea that the shareholders and executives of Citigroup and other banks "might now get rich with the help of the U.S. government was just unconscionable."
Volcker recommends government interventions to fundamentally restructure a dangerously broken- though incredibly profitable- financial system.
Taking a course like the one he outlined, creating actual structural changes- "explaining it to everyone, doing it, and letting people get on with their business"- (Volcker) said, take a "a kind of tough love that'll get Wall Street, and plenty of Washington, too, up in arms. But most people on Main Street would understand what you're doing pretty quickly. And they're the ones who actually elect you."
Volcker than dispatches Obama's prevailing position on much of his Presidency. Volcker knew that Obama has sided with Summers and Geithner and their "first do no harm" principle. He said it was something he heard in the early 80s, as he was choking off money supply to kill inflation, and that it "always sounds reasonable" but it's a formula for small, modest actions, because it calls for delay, until, as he says in the book, matters worsen to the point, "where they'll be consensus that we need to act in a forceful way. But you never get that consensus, because many of the actors, the institutions and so forth, will follow their self-interest right off the cliff." Every policy of consequence, meanwhile, is going to "do some harm, something government, mind you, can and should cushion." But there's no other way "to create the larger good, something you look back on with pride."
Larry Summers tells Orszag, "We are Home Alone. There's no adult in charge. Clinton would never have made these mistakes."
Bipartisanship, something Obama said he was constantly seeking, found its only expression in tough financial reform. In May of 2009, Emanuel found Republican Senators, led by the Richard Shelby, coming to him saying they wanted to join Democrats in passing tough financial reform legislation, and quickly. With populist surges on both left and right calling for tough measures against Wall Street, Shelby, the Republican's leader on banking issues, wanted to harvest some of the plentiful political capital on the issue. Emanuel calls a meeting of Obama and his senior staff to present this opportunity.
The push for really tough financial reform would be political gold, Emanuel said, because it "had a sense of Old Testament justice."
Others echoed this sentiment. Government's role was not to make the banks profitable, but to stabilize them; that had been accomplished.
Both men (Summers and Geithner) said that undertaking financial reform now would "create an overhang of regulatory doubt" that would slow economic activity...
Emanuel and others said that with Republicans aboard they could push it through quickly. Geithner said it would take longer than the optimists predict. President sides with Geithner and Summers.
PAGES 353-- 355
Through the fall and winter, Obama drifts through months of policy debate over whether to propose additional stimulus or be a deficit hawk. He can't decide which way to go, and lashed out at Romer, who is pushing for more stimulus, and then seems to conclude that the jobs crisis is not result of deficient aggregate demand but because of productivity gains in the U.S. economy that are now expressing themselves. Summers and Romer try to dissuade him about this last point and try to figure out where he got this idea- was it something one of them said that he misconstrued- until Romer concludes that, "The president seems to have developed his own view."
The President was paralyzed. Months of debate on the stimulus versus deficit reduction had yielded virtually nothing. On the broader issue, of how the young president's authority was being systematically undermined or hedged by his seasoned advisers, Orszag comments:
Larry would say (to Obama), 'I'll make my argument first; you can go after me,'" Peter Orszag remembered, in a comment echoed by others. "I'm thinking, 'I can't believe he's talking to the president that way.' I don't know why Obama didn't say, 'I made that decision a week ago. Just do what I say.'"
But, Obama, still seeking consensus in order to acquire the confidence he lacked in making tough decisions, was becoming dispirited.
At a meeting in January, 2010, during one of a dozen arguments over a somewhat confused proposal by Gene Sperling about a small business lending program, Obama, in a voice that was softly dispirited, said, "Well, if you guys can't agree, I mean, we don't have to do it."
After the Scott Brown election, with the health care bill in peril, Obama called together a meeting of his senior staff.
"What is my narrative?" he all but shouted. "I don't have a narrative."
In January, 2010, one of Obama's closest advisors, Pete Rouse, penned a series of memos on how he could regain control of his white house. Several of them are included in these passages. They are a blueprint by Rouse for how Obama can capture back control of his presidency and they result, over the coming months, of most of his senior staff's departures.
The book is not about the President's advisers, though they play key roles in the narrative. It is about the President, himself, his conduct and character, something that many pundits and reviewers- reluctant to frankly assess Obama's term of office-- have missed or consciously avoided. Obama, after all, is the duly elected leader. This White House is the one he constructed and presides over. It is, of course, often an area of rich analysis to consider whether a President has been well-advised by his senior staff. But Confidence Men is the fall of the economy, the rise of Obama, and what he did - or didn't do - to meet the needs of the nation.
Peter Orszag, in a particularly candid interview in January, 2011, considers some of these thorny issues, including many policies the President seemed to favor, that were blocked by his senior staff, and especially by Summers.
PAGES 387 to 389
Orszag, like others - including many of the women who thought Summers's "debate society" had hijacked their policies - can tick off a long list. Obama wanted to move forward on tough climate change legislation; Summers was opposed, telling Orszag, at one point, "we have to derail this!" It was derailed. A financial transaction tax on banks and financial institutions, to try to tame the trading emphasis that has swept those industries and, along the way, raise money: Obama said, in one meeting, "we are going to do this!" Summers disagreed; it never materialized. The list goes on.
"Larry just didn't think the president knew what he was deciding," said Orszag. Sometimes, the result was just long delay. The president was, from early in the administration, pushing for discretionary freeze on spending. Orszag favored that as well and wanted to make a presentation on the matter. Summers said to him, "You can't just march in and make that argument and then have him making a decision because he doesn't know what he's deciding." In that instance, after long delays, the president did champion the discretionary freeze. But either delay or defeat of the president's wishes generally defined the course of events.
"The fundamental question is did the president want a check on his decisions ex post facto? Did he actually want the relitigation roulette; because he recognized that his instincts weren't correct? Or was this outright and willful" on Summers's part, that "I know more than the president, flat-out. That strikes me as more likely."
On the question of why didn't Obama intervene, to repair a profoundly dysfunctional White House, where he was clearly - and often- being disrespected and undercut, Orszag adds:
"The question is why didn't Obama stop it. People knew. People realized the process wasn't working, and they kept saying it. By spring of 2010, when I was saying I just don't' want to do this anymore, they kept saying they would fix it. And they set deadlines that were, of course, missed... but the president didn't say, Goddammit!"
"He didn't demand that it be changed ... and that can't be healthy."
PAGES 421 to 427
In these pages, John Whitehead and Paul Volcker weight in - Whitehead, the former Goldman chief, on the Lloyd Blankfein; Volcker, on the President.
Whitehead, Wall Street's eminence grise, who had been reluctant to speak about Goldman to preserve his role adviser to Blankfein, finally speaks candidly. First, he offers a statement that a CEO shouldn't be paid until years after he'd retired, because anything he does will not truly show its rewards for years, maybe 10 years, after he's out the door. Then, he moves on to Lloyd:
"He's so talented and he's so smart: Harvard College, Harvard Law School, top of his class," Whitehead said, finally taking off the gloves, old guard to new, addressing Blankfein directly. "He never thought that if the public is losing their jobs and we're in a recession, it isn't a very good time to talk about the justification for a $60 million bonus. He doesn't get it!"
...."He doesn't get it. He says, 'I'm the CEO of the best financial service firm in the world. And if I'm the CEO, I'm its head man. I deserve to be paid more than anybody else. And I'm prepared to fight for it, and boast about it. Because I'm proud of it.'
"Then, the next month, he says, 'God is on our side.' "
PAGES 437 to 432
A year after the Republican Senators approached Emanuel, there is another round of bipartisan support for tough banking reform, with amendments by Al Franken, Carl Levin and others drawing surprising support and co-sponsorship from senior Republican Senators. Again, the White House backs away, supporting the deals cut by Dodd and Frank after months of horse-trading with the financial industry, which has already left the bill in a way that it presents little threat to Wall Street's continued profitability.
Volcker then weighs in on the President, his White House, and the Volcker rule:
"They say they're for it, but their hearts are not in it." And this gap between word and deed, between stated intentions and so little action, made Volcker think of a phrase that he knew Summers sometimes used- a couple of people had told him- "that the important thing is just to be caught trying."
An extraordinary exchange at Union Station between CFTC Chairman Gary Gensler and a former Goldman manager, Jon Voigtman, about what the firm actually knew and when they knew it.
Then, under Gensler's prodding, Voigtman got more specific: "Two thousand and six, that was the year that sent a shudder through the business. Ten percent of the loans that we bought never made their first payments. That was in August '06. You knew by August '06."
"They wouldn't make the first payment."
"So," Voigtman continued, "the underwriter who sat down with that borrower forty-five days before got it wrong." What's more, loans even worse than that 10 percent, the ones Goldman sent back to the underwriter, were "being financed at par," meaning they were being sold to someone else at full value.
Gensler waited before posing the question that Blankfein had repeatedly dodged.
"But by August of '06, when you knew, did you change the underwriting practices?"
Voigtman paused. Gensler was now a leader of the other team, a regulator, but then again, Voigtman was no longer at Goldman. He had left the firm in December of 2006 for his current employer, Royal Bank of Canada. Neither man had a complicating allegiance.
Voigtman shook his head: no, they hadn't changed the underwriting; they took advantage of the unfolding disaster, by adding more troops. "It became more competitive. We had more desks on the Street."
Goldman has stated that it didn't begin moving against the mortgage derivatives market until late 2007, when it saw trouble coming. Voigtman, for the first time, points out that by late 2004, Goldman knew there'd eventually be trouble with the CDOs and various mortgage-backed securities. By early 2005, he said Goldman was more short than long, having made, in essence, a directional bet against the market. This gives anyone who bought mortgage-backed securities from Goldman after that point the right to ask why this directional bet was not disclosed to clients and counterparties and whether Goldman engaged in fraud by failing to make that material disclosure.
Larry Summers' response to "Home Alone"
"What I'm happy to say is, the problems were immense, they came from a number of very different sources, they were all coming at once, and there were not very many of us, and people were pulled in many different directions. And. We couldn't make…That meant it wasn't possible to give- there were five issues at once- that were more important than any issue in a typical year of American economic management, and there certainly weren't five times as many of us. And that's what I must have been referring to."
Excerpts from Obama Interview:
His decision to restructure many of the large, troubled banks was undercut during the marathon meeting and reduced to just closing Citibank-but even that presidential directive, he discovered nearly a month later, had been ignored by the Treasury.
When asked about how agitated he was at his Treasury secretary when he found this out, Obama first said, "I'll be honest, I don't recall the exact conversations."
Then, recalling the matter-something that had never been publicly disclosed-he said, "Agitated may be too strong a word. But I will say this," he continued. "During this period, what we are increasingly recognizing is that there are no ideal options. And so, on something like a Citibank plan and doing a 'good bank, bad bank' structure, the technical constraints around how to execute are enormous. And typically, in these situations you might have one institution that you are dealing with. Here you had potentially fifty! And if you didn't get it right, it could have made everything else worse."
This is precisely the fear that the president's plan to close and then reopen Citibank was, in fact, meant to address. By handling Citibank effectively, Congress and the American people would see that "government could do this right," as the president asserted that afternoon nearly two years before, killing off fear that if another financial institution failed, it would spark a financial crisis similar to what happened after Lehman-and then the White House could go back to Congress to restructure the banking system properly.
But the Citibank 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. On this issue, a matter perilously close to insubordination, the president was careful in his selection of each word: "What's true is that I was often pushing, hard, and the speed with which the bureaucracy could exercise my decision was slower than I wanted. But I don't think, it's not clear to me-and I'll have to reflect on this at some point-it's not clear to me that that was necessarily because of a management problem, as it was that 'this is really hard stuff.' "
He sat for a moment. It was all working, integrating nicely, with Kennedy and FDR. But there were other presidents he never wanted to be compared to. "Carter, Clinton, and I all have sort of the disease of being policy wonks," he said, clearly citing this shared characteristic as a liability. But now, with his new self-definition, this improved view, he could distance himself from them. "I think that if you get too consumed with that you lose sight of the larger issue."
Obama on Reagan
There was, of course, one president whom Obama seemed to be speaking directly to, though not yet mentioned. Ronald Reagan's ability to project optimism when there was no defendable reason to be optimistic was his particular genius, his specialty, and a subject of controversy every day since he left office over twenty years before. Reagan was instrumental in defining confidence, and its many uses, in the modern era. Some say he allowed America to move forward in an age of limits. Others, that he was a charming agent of destruction.
"He (Reagan) was very comfortable in playing the role of president. And I think part of that really was his actor's background," Obama said, betraying, in his tone, a hint of envy. As he edged closer to Reagan, though, Obama seemed to squirm a bit in his chair, trying to get comfortable. Looking back, the president said he'd always taken pride "in pushing against artifice" and "not engaging in a lot of symbolic gestures, but rather, thinking practically... And I think that the evolution that happened in the campaign was me recognizing that if I was going to be a successful candidate, then the symbols and the gestures mattered as much as what my ideas were."
After a long interview, in which he discussed various instances in which he was ignored by his staff, frustrated and experienced confidence-bruising challenges, Obama held forth on what he'd learned.
"Going forward as president," Obama said, "the symbols and gestures-what people see coming out of this office-are at least as important as the policies we put forward."
"I think where the evolution has taken place," Barack Obama said finally, looking into the middle distance, "is understanding that leadership in this office is not a matter of you being confident. Leadership in this office is a matter of helping the American people feel confident."