Ron Susskind Book: Geithner Ignored Obama's Order to Dissolve Citigroup

[sabrina 1]

If what is reported in this book is true, not just about Geithner but Summers and Rahm and others in the administration, it would help to explain some of what seemed to be Obama's incomprehensible policy decisions.

The book is titled "Confidence Men: Wall Street, Washington, and The Education of A President," and the author spoke to over 200 people, including the President, Geithner, and other top officials in the Government.

Ron Suskind Book 'Confidence Men': Tim Geithner Ignored Obama Order On Banks

The book states Geithner and the Treasury Department ignored a March 2009 order to consider dissolving banking giant Citigroup while continuing stress tests on banks, which were burdened with toxic mortgage assets.

In the book, Obama does not deny Suskind's account, but does not reveal what he told Geithner when he found out. "Agitated may be too strong a word," Suskind quotes Obama as saying. Obama says later in the book that he was trying to be decisive but "the speed with which the bureaucracy could exercise my decision was slower than I wanted."

Geithner says he doesn't remember the President being angry at him about the Citigroup issue. He denies allegations in WH documents which record that the Treasury Dept. was 'slow to enact the president's plans' and stated I don't slow-walk the president on anything

The president wanted his Treasury Dept to work on ways to dissolve Citigroup, but no plan was ever developed, according to Susskind. It's interesting too because Obama has been criticized strongly for being too easy on the Banks. Pretty important information and raises the question 'why is Geithner still there'?

And then there's Summers:

Larry Summers, the former White House economic adviser, is quoted as lamenting that he and others felt "home alone" and that mistakes made under Obama would not have happened under President Clinton, for whom Summers also served. Interviewed by Suskind, Summers initially denied making such comments, then acknowledged them, saying he was frustrated at having "five issues" of major importance to deal with at once and not "five times as many" officials to handle them.

So, it appears these Wall St. guys were undermining the President and seemed to not respect him at all. Elitist, arrogant Wall St. know-it-alls, and so wrong about everything as is tragically apparent. They also did not respect the American People who elected this president to end their failed policies.

And on Rahm Emanuel:

The book says one of Obama's top advisers, former chief of staff Rahm Emanuel, was not the president's first choice for the position. According to Suskind, Emanuel's name was not even on the initial short list, which included White House aide Pete Rouse.

Very interesting. It seems that, according to Susskind, Obama did not actually want many of the people he ended up with. That changes my view of him somewhat, especially as I read this paragraph:

"The Citbank 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," Suskind writes.

This reminds of something I read this week about President Kennedy and the Bay of Pigs incident. I believe it was from Jackie Kennedy's tapes, or a commentary on them. Kennedy was devastated by that incident, and according to Jackie he cried for the men who were killed and captured.

But it was an early lesson that he could not trust some of the people he was surrounded by and he felt he had been tricked into signing off on it by the CIA assuming it was well planned before he got there. Afterwards, he made changes to his cabinet as he did not trust many of them. It was then that he brought in his brother Robert who he trusted implicitly.

Both young presidents. Was Obama also tricked into some of the decisions he made? Could be and would explain a lot, but he needs to FIRE THEM NOW if that is the case.

[villager]

1. In a way, this makes the Obama presidency even more troubling: He can't even stand up to his own

...appointments and advisors, let alone the Republicans...

[truedelphi]

5. Since the President works for them,

Rather than the other way around, he really and truly cannot stand up to them.

And it would be one thing if his agreement to take orders from them benefited the nation as a whole.

But it benefits no one other than the Biggest Corporations.


And in some ways, not even the Corporations are served, for when common sense is shoved aside for the benefit of today's profit over tomorrow's peril, even the Biggest in the Corporate Fiefdom lose out.

Today's headline news features the story of how a "rogue trader" has imperiled Swiss Bank to the tune of some two billions of dollars.

So if the President had been his own man, and had gotten Glass Steagall and other regulations put in place, Swiss Bank might have followed suit and today they wouldn't be out that two billion.

[Angry Dragon]

10. 'Since the President works for them'

Having trouble understanding this statement from you

[truedelphi]

13. It's not an easy statement to write.

I criticized Obama the moment I heard about his appointing Geithner.

But after looking into everything that has gone on under this Administration, it is the only logical conclusion.

He is the President. If he doesn't usually undertake Presidential actions, repeatedly, again and again and again, but continuously helps out the Monstrous Big Corporations, why is that?

If he is the President and is independent of the Corporations, while they pillage, rape and plunder, destroy our economy, ruin our Gulf of Mexico, and his response is always the same - to aid and abet them - why is that?

It took me three long years, but I finally saw the Occam's razor in all of this - he doesn't do what the nation needs him to do because his appointees are not working for him, he is working for them.

My hope for this nation is that out of the many many Democratic party mayors I see on C Span or watch on YouTube, one of them will contest Obama and make a run for the Presidency. It is not too late.

Robert Kennedy didn't come out to be President until a far later date in the sixties than a Presidential contender faces right now.

So it is not impossible.

[Angry Dragon]

27. Thank You

[roguevalley]

17. we are all doomed if he can't FIRE this prick for disobedience.

what the hell is wrong with Obama? He is a total coward for this.

[elleng]

2. Overstatement?

'it appears these Wall St. guys were undermining the President and seemed to not respect him at all.'

and 'Summers initially denied making such comments, then acknowledged them, saying he was frustrated at having "five issues" of major importance to deal with at once and not "five times as many" officials to handle them.'

[sabrina 1]

22. I don't know, but that is what Susskind seems to be saying.

After all these guys have been around for decades. Any president who steps into the WH is going to have to depend on more experienced people until he gets his own feet on the ground.

As I said at the end, Kennedy was undermined horribly also early in his presidency. When he made changes after he realized they had lied to him about the Bay of Pigs, he wasn't very popular with the MIC.

I imagine it happens with all of them, unless they are part of it all, like Bush Sr.

Presidents are human, so I always wonder who do they know what to do when they first get there. And I realize how important the cabinet they surround themselves with is.

[elleng]

23. Agree; probably happens to all of them, AND they are human.

[grasswire]

3. Didn't Bush have the same trouble?

Didn't Rummy and Cheney run rings around him, and have things their way?

[elleng]

4. They did 'run rings,' but not same trouble, I think.

See my post #2.

cheney+ knew what they were doing and how to do it.

[monmouth]

6. After Obama is re-elected I would like to present him with a very large broom.

It's time to really clean house and Timmy needs to be one of the first to go, get rid of Daley also. He's useless.

[bbgrunt]

9. he'll need that broom before the election.

[sabrina 1]

32. Definitely before. Geithner needs to go but despite

all this article says, Obama recently said he would not accept his resignation even if he offered it.

[SlimJimmy]

12. Slight correction.

BEFORE Obama is re-elected I would like to present him with a very large broom.

It's time to really clean house and Timmy needs to be one of the first to go, get rid of Daley also. He's useless.

[Blue_In_AK]

7. And Obama couldn't fire these creeps

for insubordination? It makes him look very weak indeed.

[roguevalley]

18. agreed, blue

[theoldman]

8. Obama will definitely clean house after he is re-elected.

Vise president Hillary Clinton will insist on it.:)

[TacticalPeek]

11. "If only the Czar knew . . ."

:thumbsdown:

[Gin]

15. makes him look like the only thing he was used for was to be

the first afro american president....once elected...they took over...

this story makes me sad....experience matters.

[enough]

14. See DU discussion here:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x1949935

[sabrina 1]

29. I did not see that, did a search on 'Susskind' and

nothing came up so I posted, sorry I missed it as I would not have posted this had I seen it. Thanks for letting me know.

[Octafish]

16. Three bits on JFK and the Bay of Pigs Thing...

Sorry if this seems OT to lurkers and concern trolls, but it is important, IMFO, to DUers who think and give a damn...



News flash: CIA director Dulles and JCS chairman Lemnitzer lied to President Kennedy, telling him the Cuban exile invasion would work without US military intervention. They also knew the plan had been compromised, yet failed to inform the president that Castro knew the place and date for the attack.

Know your BFEE: At every turn, JFK was opposed by War Party

"Wasn't that, like, the Bay of Pigs Thing?"

JFK Would NEVER Have Fallen for Phony INTEL!

Regarding Geithner: He should be in a lot of trouble. But, he and the president are friends from way, way back.

[snagglepuss]

19. Very interesting article about Obama's friendship with Geither. Recommend. nt

[sabrina 1]

20. It's very important Octafish. I couldn't help thinking about what I read

this week, and heard Jackie Kennedy say about how upset President Kennedy was about being tricked into signing off on that disaster, when I was reading this story about President Obama.

Excellent links, thank you. They confirm what I read and heard the other day about Kennedy being lied to by the CIA.

The one I haven't clicked yet is the one about Geithner and Obama being longtime friends.

Still, if the president orders something to be done and someone ignores it, friends or not, they should go. So, I'm not sure why Geithner is still there if their policies on the financial crisis are so different. Seems to me Obama was right and was in line with what the American People wanted.

I appreciate all the work you do to help people put the pieces together, very much appreciate those links. Kennedy did make changes almost immediately and installed people he could trust. He was a fast learner. But did it get him killed? I also read this week, that he intended to get rid of Hoover.

Makes you wonder.

[madfloridian]

21. Most interesting Alternet article. Thanks.

http://www.alternet.org/news/145181/do_obama_and_geithner_have_the_same_flaw:_accommodation_instead_of_moral_action?page=entire

I missed that one. Thanks for sharing it.

[sabrina 1]

24. Very interesting article, madfloridian, thank you.

This is something I have always wondered about:

So far the most convincing rational explanation I've read comes from William Black, the former Savings & Loan investigator-hero who understands public-private corruption in this country like few others. Prof. Black, like a true prosecutor, puts Geithner's rise to head the Treasury in simple crime-world terms: he's there to cover up his own heist. All across the board, as Black has pointed out, the same perps who caused the collapse of the financial system and the looting of all those trillions are all in positions of power to cover up their crimes, and keep the details out of the public eye.

Whatever they did, there is a concerted effort not to look into the whole thing. But if Susskind is right, Obama did not really choose these people himself. It is possible that they sat him down and explained what might happen should their corruption be revealed, and he may have agreed, or been persuaded, that they could fix things if they had some time and it 'would be better for the country' etc. etc.

And even if he does have similar views regarding the economy, he is not a stupid man, by now he must see how much of a failure they have been and how it is ruining his own presidency.

Also, even if he likes Geithner as a person and doesn't want to see him go to prison or whatever, he is now in a position of being complicit, unless he forces them out.

But that is not what is happening, he recently stood by Geithner and said even if he 'handed in his resignation, I will not accept it'.

You could look at that two ways, the more of a mess they have made, the more necessary it is to keep hiding what they have done and maybe Obama doesn't want Geithner to get off the hook?

I don't know, it is all very confusing. There is apparently a lot more in the book so we'll have to wait and see what else is revealed.

Anyhow, thank you for that article, it does draw a picture of two people who are not willing to take a firm stand when it is needed, at least up to now on matters of morality, but I would disagree that Geithner won't take a stand when something matters enough to HIM. You only had to see his contentious exchanges with Elizabeth Warren to see how forceful he can be.

Hopefully Obama's experiences over the past two years will finally make him realize that he must do so now, as the country is at stake.

[madfloridian]

26. Do you remember Suskind's "Why are these men laughing?" 2003

Suskind has good credibility overall.

From 2003. Suskind's disturbing portrayal of Rove in the WH.

"They heard that I was writing about Karl Rove, seeking to contextualize his role as a senior adviser in the Bush White House, and they began calling, some anonymously, some not, saying that they wanted to help and leaving phone numbers. The calls from members of the White House staff were solemn, serious. Their concern was not only about politics, they said, not simply about Karl pulling the president further to the right. It went deeper; it was about this administration's ability to focus on the substance of governing -- issues like the economy and social security and education and health care -- as opposed to its clear political acumen, its ability to win and enhance power. And so it seemed that each time I made an inquiry about Karl Rove, I received in return a top-to-bottom critique of the White House's basic functions, so profound is Rove's influence.

..."It's an amazing moment," said one senior White House official early on the morning after. "Karl just went from prime minister to king. Amazing . . . and a little scary. Now no one will speak candidly about him or take him on or contradict him. Pure power, no real accountability. It's just 'listen to Karl and everything will work out.'. . . That may go for the president, too."

"There is no precedent in any modern White House for what is going on in this one: a complete lack of a policy apparatus," says DiIulio. "What you've got is everything -- and I mean everything -- being run by the political arm. It's the reign of the Mayberry Machiavellis."

..."Inside, Rove was talking to an aide about some political stratagem in some state that had gone awry and a political operative who had displeased him. I paid it no mind and reviewed a jotted list of questions I hoped to ask. But after a moment, it was like ignoring a tornado flinging parked cars. "We will fuck him. Do you hear me? We will fuck him. We will ruin him. Like no one has ever fucked him!" As a reporter, you get around -- curse words, anger, passionate intensity are not notable events -- but the ferocity, the bellicosity, the violent imputations were, well, shocking. This went on without a break for a minute or two. Then the aide slipped out looking a bit ashen, and Rove, his face ruddy from the exertions of the past few moments, looked at me and smiled a gentle, Clarence-the-Angel smile. "Come on in." And I did. And we had the most amiable chat for a half hour."

[sabrina 1]

30. I remember that story very well, yes.

Didn't realize it was the same guy when I read about his latest book though although I should have.

Here is a list of his other books, including the one mentioned in your article about Bush:

His other books include "The Way of the World" (2008), which focused on national security, and "The Price of Loyalty" (2004). That best-seller was an account of the Bush administration and its first treasury secretary, Paul O'Neill, that includes what became a widely cited remark by then-Vice President Dick Cheney: "Reagan proved that deficits don't matter."

Suskind's 1998 book, "A Hope Unseen," grew out of the series of articles that won him a Pulitzer for feature writing.

I remember that story about Rove's outburst. Didn't seem to do him any harm though, since then I've come to realize that what we 'little people' view as unethical and immoral in our 'simple' way, in DC those same things are viewed as attributes. Rove is an admired figure, tragically, on both sides of the aisle.

[sabrina 1]

31. I just read the last link, which madfloridian provided also.

Very interesting especially the opinion of Black who is so highly regarded, that the reason many of those responsible for creating the disaster, are still there in order to cover up their crimes. I have thought that might be the reason also.

[amborin]

25. apparently everyone ignored Christina Romer

[sabrina 1]

28. She is gone, no? So are all those who were originally on the

economic team"

When Obama took office in early 2009, he was counseled by an all-star economic team that included former Treasury Secretary Lawrence H. Summers, Great Depression scholar Christina D. Romer and former Federal Reserve Chairman Paul A. Volcker.

Only Geithner is left. She put together the stimulus program airc but her predictions about unemployment were off.

What did they ignore amborin? I'm really not that familiar with her.

[TacticalPeek]

37. Romer Seems To Break With Geithner On Cause Of Crisis

Christina Romer, at a speech at the Brookings Institution Monday afternoon, appeared to give support to critics of Treasury Secretary Timothy Geithner who say that he is wrongly treating the economic collapse as a "liquidity crisis" when it is instead a crisis of solvency in the banking system brought on by a collapse in asset prices.

"Most obviously, like the Great Depression, today's downturn had its fundamental cause in the decline in asset prices and the failure or near-failure of financial institutions," she said in prepared remarks, where she compared and contrasted the current crisis with the Great Depression. The assets in question are, by and large, houses and other real estate.

Asked by the Huffington Post if she specifically disagrees with Geithner as to whether the nation faces a liquidity crisis, however, she said that she does not.

"Let me be very clear. No, I absolutely don't disagree with him," said Romer, head of the president's Council of Economic Advisers. Treasury spokeswoman Stephanie Cutter also said that there was "no contradiction" between the two economic officials' views.

http://www.huffingtonpost.com/2009/03/10/howd-we-get-here-romer-di_n_173426.html

That issue, solvency problem instead of liquidity problem, is the core of our continuing economic disaster, and Romer was on the right side, despite the demurrals. And Geithner, being the insolvent banks' boy, is on the dark side.

Also, I recall watching that speech and Q&A, and noticed for the first time that Ryan Grim is a good reporter.

[TacticalPeek]

38. I should have noted that was March 09.

[sabrina 1]

39. Thanks for that information.

I wonder why she left? And I wonder why Geithner won't listen to anyone. It leads to the suspicion that his main concern is not the economy itself, but covering up whatever they did to cause its collapse. Black, in Octafish's, or maybe it was madfloridian's above, said the same thing. He said nothing they are doing is making sense, UNLESS you consider that the same people who caused the problems ended up supposedly fixing them, but what they might actually be trying to do is cover up the crimes they all committed.

Not familiar with Ryan Grim.

[amborin]

40. excerpts from the book suggested she was ignored at meetings

particularly by Summers (remember his Harvard flap, where he said women were inferior in science and math?), but also by basically everyone, at meetings....

[Safetykitten]

33. Profiles in Courage. "President tricked by Timmy".

[sammytko]

34. It said "consider dissolving", not dissolve n/t

[me b zola]

35. So let me get this straight

Timmy refuses order and does the opposite of what he was told to do...on a major issue. Obama publicly praises him and when Timmy says he wants to resign Obama says he will fight to keep Timmy on the job.


Yeah, makes perfect sense to me. /sarc

[sabrina 1]

36. There is something strange about it all.

Either they've shown him how bad things are and let him in on the secret of why they need a fox in the henhouse, to try to fix what they broke, and he felt he had no choice because what they did is so bad, they do not want the public to know. Orrrr ~ they threatened him and his family!

I don't know, all I know is things keep getting worse, and he keeps Timmy there so it's hard to know what to think.

[Honeycombe8]

41. NOWHERE does any article say that Obama "ordered" Citibank be dissolved.

I am sometimes surprised when intelligent, informed posters overlook critical misinformation in subject headings or so-called summaries of articles.

Nowhere has it been reported that Obama ever ordered that Citibank be dissolved. Think about it, people. Is it in any President's province to decide on his own to dissolve a bank, much less a mega-bank? Does any President even have the expertise to decide such a thing? Especially after being in office only two months?

The articles, so far, report that Obama ordered or asked, whatever you want to call it, Geithner to CONSIDER dissolving Citibank. Obama appointed Geithner and others to DECIDE those things; it's in THEIR area of expertise.

At most, Geithner didn't get back to the President right away on it, or didn't serously consider it, as ordered/requested. Which is a big deal. But it is NOT the same thing as disregarding a direct order to dissolve a bank.