The New New Deal - The Hidden Story of Change in the Obama Era

The Escape Artists features previously undisclosed internal documents and extensive, original reporting from the highest levels of the administration. Star White House journalist Noam Scheiber reveals the mistakes and missed opportunities that kept the president’s pedigreed team from steering the economy in the right direction. He shows what responsibility the president bears for those missteps, what bold actions his brain trust refused to take despite its preternatural confidence, and how the White House was regularly outmaneuvered by Republicans in Congress.

Tracking the administration’s efforts deep into the fall of 2011, The Escape Artists provides a gripping look inside the meeting rooms, in-boxes, and minds of the men who tried to manage the defining crisis of the Obama presidency: how the very qualities that made these men and women escape artists in the 1990s ultimately failed them.

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THREE YEARS INTO THE OBAMA PRESIDENCY, THE UNEMPLOYMENT RATE WAS PAINFULLY HIGH, THE GAP BETWEEN RICH AND POOR HAD WIDENED, AND THE STIMULUS HAD NOT DONE ENOUGH TO BRING JOBS BACK. WHAT WENT WRONG?

A PRESIDENT WITH OTHER PRIORITIES . . .

Barack Obama hadn’t run for president just so he could clean up someone else’s mess, however urgent the task. He’d run for president to usher in once-in-a-generation achievements like health care reform—“to change the trajectory of America.”

Timothy Geithner remarked to President-elect Obama that “your signature accomplishment is going to be preventing a Great Depression.” Obama’s response was slightly jarring. “That’s not enough for me,” he said. It dawned on Geithner that he and his colleagues were a sideshow rather than the main attraction. “If you don’t do that, nothing else is possible,” Geithner protested. “Yeah,” Obama repeated, “but that’s not enough.”

AN ECONOMIC TEAM RELUCTANT TO TAKE BOLD ACTION . . .

David Axelrod was preparing Christina Romer, Obama’s chief economist, for a Sunday talk show. Many experts were voicing doubts about the size of the original package, and so Axelrod asked, “Was the stimulus big enough?” Without hesitating, Romer responded, “Abso-f---ing-lutely not.” She said it half-jokingly; Axelrod did not seem amused.

AND A BRAIN TRUST THAT BELIEVED IT KNEW BETTER . . .

It was the worst of all worlds for the Obama administration: a country that took one look at the languishing economy and another at the recovery on Wall Street and concluded that its government had put big banks ahead of ordinary people. Generously, the S&P officials didn’t point out any of this. Instead, the leader of the group confessed that the agency was mostly concerned about the prospects for bipartisan compromise.

At this, Geithner became dismissive. His message was unmistakable:

Sheila Bair is widely acknowledged in government circles and the media as one of the first people to identify and accurately assess the subprime crisis. Appointed by George W. Bush as the chairman of the Federal Deposit Insurance Corporation (FDIC) in 2006, she witnessed the origins of the financial crisis and in 2008 became—along with Hank Paulson, Ben Bernanke, and Timothy Geithner—one of the key players trying to repair the damage to our economy. Bull by the Horns is her remarkable and refreshingly honest account of that contentious time and the struggle for reform that followed and continues to this day.

A level-headed, pragmatic figure with a clear focus on serving the public good, Bair was often one of the few women in the room during heated discussions about the economy. Despite her years of experience and her determination to rein in the private banks and Wall Street, she frequently found herself at odds with Geithner. She is withering in her assessment of some of Wall Street’s finest, and her narrative of Citibank’s attempted takeover of Wachovia is a stinging indictment of how regulators and the banks worked against the public interest at times to serve their own needs.

Bair is steadfast in her belief that the American public needs to fully understand the crisis in order to bring it to an end. Critical of the bank bailouts and the Can. $29.99 lax regulation that led to the economic crash, she provides a sober analysis as well as a practical plan for how we should move forward. She helps clear away the myths and half-truths about how we ran our economic engine into the ditch and tells us how we can help get our financial and regulatory systems back on track.

As The New Yorker said, “Bair has consistently stood out for her skepticism of Wall Street and for her eagerness to confront the big banks. A Kansas Republican, she has become an unlikely hero to economic liberals, who see her as the counterweight to the more Wall Street–centric view often ascribed to Timothy Geithner, the Treasury Secretary” (July 6, 2009).

A call-to-arms from Nobel Prize–winning economist and best-selling author Paul Krugman.