A great New York Times Magazine piece by a great reporter, Peter Baker, sheds some of the first light I’ve seen on serious dispute among President Obama’s economic advisers.
The bickering was led by National Economic Council Director Larry Summers, a famously overbearing character who was passed over to be Treasury Secretary. He recently departed the White House and is now teaching at Harvard and writing a book which will presumably settle scores.
The piece is already on the web. Here a few paragraphs to give you a flavor of it.
The path from crisis to anemic recovery was marked by turmoil inside the White House. The economic team fractured repeatedly over philosophy (should jobs or deficits take priority?) and personality (who got to attend which meetings?), resulting in feuds that ultimately helped break it apart. The process felt like a treadmill, as one former official put it, with proposals sometimes debated for months before decisions were reached. The word commonly used by those involved is “dysfunctional,” and in recent months, most of the initial team has left or made plans to leave, including Larry Summers, Christina Romer, Peter Orszag, Rahm Emanuel and Paul Volcker.
At the center was Summers, a larger-than-life figure who by many accounts was ill suited to run a bureaucratic process. To some of his colleagues, Summers was an eye-rolling intellectual bully. “He’s much better at telling you why you’re stupid than creating a system that can produce usable policy solutions,” said one Obama adviser, who, like others, did not want to be named criticizing Summers. At meetings, colleagues with differing viewpoints felt the full force of his capacity for finding flaws in their reasoning.
It was a measure of Summers’s stature that everyone around him paid attention to signs of his status. Rahm Emanuel promised him a White House car, befitting a former cabinet secretary, but discovered that he could not deliver because the number of vehicles had been capped. Likewise, after Summers was not invited to march onto the floor of the House with the cabinet for Obama’s first State of the Union address, Emanuel made sure he was included for the second.
With Geithner as its anchor, a new economic team is being built around Bill Clinton-era figures like William Daley, Gene Sperling and Jack Lew, a group assembled to joust with Republicans instead of one another. Rather than responding to crises or putting into motion grand macroeconomic theories, they will focus on pushing the recovery into higher gear while at the same time figuring out how to reduce the deficit — two goals that some see as incompatible in the short term. And along the way, they need to convince Americans that the president is focused on jobs, jobs, jobs.