This is wonkish stuff, but the you-are-there, personality-driven nature of Suskind’s writing is compelling. He quotes Obama as saying that he had “connected our current predicaments with the broader arc of American history” — and that’s precisely what Suskind himself tries to do here, with much success. He pairs the rise of debt in the United States with the flattening of middle-class incomes and the flow of great wealth to the top. He repeatedly invokes Franklin D. Roosevelt, quoting from his famous first inaugural speech about the bankers of his time: “Faced by failure of credit, they have proposed only the lending of more money. . . . They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish.”
Of the Obama presidency, Suskind writes: “Presidents are among the few mortals who are sometimes graced with chances to change a culture. Throughout a windswept March, the country had been working to dislodge some of the era’s prevailing certainties about markets being efficient, about people — economically, at least — getting what they deserve,” but “with the eyes of the country on him, Barack Obama ended the month by shielding Wall Street executives against these winds of cultural change.”
Suskind says he spoke to more than 200 people, and the book is full of great anecdotes, insights and quotes. Ron Bloom, the banker turned United Steelworkers executive turned adviser, was in the room as the economists who surrounded Obama argued over what to do about the failing auto companies. Furious at what he heard, Bloom later said, “There wasn’t one guy in that room who’d spent any serious time having beers with real workers.” Suskind quotes former Federal Reserve chairman Paul Volcker telling a former engineering professor that “the trouble with the United States recently is we spent several decades not producing many civil engineers and producing a huge number of financial engineers. And the result is [expletive] bridges and a [expletive] financial system!”
A picture of the big personalities emerges. At a birthday celebration for Larry Summers, who served as the director of Obama’s National Economic Council until late 2010, Suskind quotes Summers singing about his own reputation, “For he’s an unpleasant fellow.”
Suskind is a grand writer but sometimes stumbles into stretches of poor clarity. This is especially true at the end of the book, when his prose turns rambling. And he often undercuts his own core thesis, which is that Obama suffered a “crisis of confidence” and started “disbelieving his own rhetoric” as the economic collapse set in. As a result, the new president surrounded himself with people who provided a false sense of certainty. Summers, in particular, fell into this camp, and Suskind paints him as the villain in chief. He asserts that Obama realized a secret truth in the fall of 2008 — that he was not ready to serve as president — and he writes that Obama “lost ownership of his words and, eventually, his deeds.” But he also has Volcker describing Obama as “self-confident, too self-confident,” and he writes of Obama’s “preternatural confidence — quite real.” So which is it?
The bigger issue is the firestorm of alleged errors that has swamped the book.
In one case, Anita Dunn, the former White House communications director, has claimed that she was misquoted saying, “Looking back, this place would be in court for a hostile workplace . . . because it actually fit all of the classic legal requirements for a genuinely hostile workplace to women.” In response, Suskind released the tape of his interview with her, and it turned out that the quote was accurate — except that he dropped a few words at the start, whenshe said, “If it weren’t for the president, this place would be in court . . .” Suskind has said he did so at Dunn’s request, and in any event, his main point about how women felt about their treatment at the White House is well supported.
But Suskind can be guilty of exaggeration. Early in the book, in a discussion about the near-bankruptcy of Merrill Lynch, he creates a moment of great drama that, somehow, in all the massive coverage, everyone else missed. He writes that Merrill was in its “own special category of destructive capability” because its wealth-management business housed “the nest eggs of more than ten million people.” Suskind continues: “But of course it isn’t a bank. So, those accounts are not federally insured, as bank accounts have been since the Great Depression. That means Merrill was actually like a huge national bank . . . but in 1929.” There’s a reason that other reporters didn’t pick up on this momentous issue, which is that it didn’t exist: The Securities Investor Protection Corporation ensures that cash and securities held in investors’ accounts aren’t affected by the failure of a broker-dealer.
Another anecdote in the spotlight is Suskind’s contention that Treasury Secretary Timothy Geithner was guilty of “insubordination” for ignoring a direct order from the president to come up with a plan to dissolve Citigroup. A deep split existed within the administration over what to do about the banks, but Obama’s quotes in the book hardly support Suskind’s amped-up version of events, and Geithner has denied the allegation. Such denials have to be taken with a grain of salt, but Suskind loses credibility by turning former Clinton officials such as Geithner into caricatures of adoring servants of Wall Street. (He also writes that Clinton-era regulators, “many of them now cycling back into the Obama administration,” had “net worth in Citi stock,” but he provides no evidence to back up this incendiary claim.)
Suskind quotes former chief of staff Rahm Emanuel as saying it was a “fantasy” to believe that the government could come up with $700 billion to nationalize the banking system. But he doesn’t grapple with what may have been the real issue: Those who advocated trying to restore confidence in the banks didn’t think the government had enough resources — money or people — to clean up the mess if the system cracked, and they were truly afraid that a take-down of Citi might spark another run. If Suskind is right, and the goal was simply to coddle Wall Street, then he needs to show why those fears weren’t legitimate.
Any one of these issues might be excusable. But the sheer weight of them is troubling. And that’s even before the long list of bald errors. Suskind gets many facts wrong, from blaming Enron’s fraud on its trading operation (that’s not the real story) in order to support his claim that Enron proved derivatives were dangerous, to identifying Ed Liddy, who briefly served as the chief executive of AIG after its government takeover, as a former Goldman executive. Liddy was a Goldman board member, not an executive.He also describes a bank’s equity holders as “secured creditors.” Confusing equity with the role debt can play is a basic and glaring mistake, one Suskind compounds with other florid but nonsensical passages about finance. Could it be that he doesn’t have a deep understanding of the concepts that are so central to much of his book?
In the end, I wondered if the author himself were the real confidence man, the ultimate untrustworthy narrator. Perhaps that’s unfair, but in a purportedly nonfiction work, I never even want to wonder.
, a contributing editor at Vanity Fair, is co-author with Joe Nocera of “All the Devils Are Here: The Hidden History of the Financial Crisis.”