With all the news swirling around lately it seems that Obama’s approach to the financial crisis, a topic that was the main focus of the early months of his presidency, has gone on the back burner. But as his more Leftist financial proclivities have become more obvious, I’ve wondered how some of his more moderate financial advisors are doing.
What, for instance, is going on these days with Larry Summers? He’s hardly a man of the Right, I know, but neither is he a conventionally wild-eyed tax-and-spend liberal. Oh yes, I note that in his recent public appearances Summers is hewing to the party line, praising the Obama administration’s agenda and making excuses for its failures. But I’ve wondered whether Summers (and others of his ilk, such as Volcker) haven’t become essentially Hillarized (or perhaps McChrystaled) by the Obama administration.
Is Summers (and the others) being consulted by Obama, and if so how much? Is he really in agreement with what’s happening, or is he being a hypocrite when he defends it?
Short of being the proverbial fly on the wall when Summers and the others speak privately, there’s no way to tell. But this recent article in the NY Post by Charles Gasparino tackles the question.
Gasparino reports what is essentially gossip, so his piece must be read with a caveat about unnamed sources But if you take a look at Gasparino’s profile it seems he may indeed have access to quite a bit of knowledge, and informants in high places.
His piece describes Wall Street’s general disillusionment with President Obama. Before the election many movers and shakers thought Obama would be a moderate on the economy—although to do so they must have ignored those statements about spreading the wealth or bankrupting the coal industry and making utility rates skyrocket.
But hindsight is 50-50 and all that. Gasparino reports that these financial wizards have come to say (in private conversation, not in public) that they feel as though they’ve been had.
Not surprising, although their initial naivete is. The meat of the article—as far as I’m concerned—is the following allegation:
I’m told that Treasury Secretary Tim Geithner and chief economic adviser Lawrence Summers have both complained to senior Wall Street execs that they have almost no say in major policy decisions. Obama economic counselor Paul Volcker, the former Fed chairman, is barely consulted at all on just about anything — not even issues involving the banking system, of which he is among the world’s leading authorities.
At most, the economic people and their staffs get asked to do cost analyses of Obama’s initiatives for the White House political people — who then ignore their advice…
As one CEO of a major financial firm told me: “The economic guys say that when they explain the costs of programs, the policy guys simply thank them for their time and then ignore what they say.”
In other words, the economic people feel that they have almost no say in this administration’s policy decisions.
Why does this not surprise me? I get the distinct impression that it’s Obama, Emmanuel, and Axelrod all the way, who don’t need no steenking experts.
Oh, and add Valerie Jarrett to that aforementioned threesome. Gasparino reports the following disclosure about Obama’s reliance on Jarrett from:
…a former Wall Street executive and longtime Democrat who anxiously recounted a recent conversation with Obama.
The executive said he told the president that he’s at a disadvantage because he’s relatively inexperienced in economic matters during a time of economic crisis. “That’s why I have Valerie,” came Obama’s reply.
“Valerie” is senior adviser Valerie Jarrett — a Chicago real-estate attorney and one of Obama’s closest friends, who has deep ties to the Windy City’s Democratic political machine.
Now you know why Wall Street is so nervous.
Not exactly reassuring, if true. Jarrett is an especially well-connected (in Chicago terms) lawyer and long-time friend and booster of Obama, but her financial background seems to be limited to having been head of a real estate company and Chairman of the Board of the Chicago Stock Exchange.
It is certainly in line with my own observations of Obama’s patterns of decision-making that she would be the person on whom he relies most for financial policy advice, rather than the more acknowledged experts in the field whom he has appointed to serve him. Her loyalty is not at issue; she has been devoted to the Obama cause for a long time.
Why might Obama have a tendency to ignore experts, even those he has appointed? Arrogance and hubris on his part would certainly be one explanation, and not a bad one at that. But another phenomenon may be in play, best summed up by this comment made by “Artfldgr” in the thread yesterday about Hillary Clinton [I've taken the liberty of making the punctuation, spelling, and capitalization more conventional for ease of reading]:
Expertise has no place in power. It is irrelevant and an opposing force. so no one under the despot can have expertise except for the lowest proles who have no other options and no way to leverage their expertise except in the service of the power above.
This is why these states fall apart… at first. Power loves a servant, and an independent capable person is a power of opposition, not servant. So they move incompetents into place. The incompetents owe all they have, since they can’t do that well on their own. So their morals are easy to corrupt and they know whom they serve.
Makes sense to me. Listen only to those loyal to you, but appoint and retain the experts for window-dressing, and then ignore and marginalize them. Figure they’ll be likely to stay on board through moral cowardice and/or the persistence of the “if Stalin only knew” phenomenon—that is, their thought that if only, if only they could get the undivided attention of the leader and plead their case so that he could truly hear, they’d finally have the influence they so rightly deserve.