A matter of confidence

Ron Suskind’s Confidence Men provides insight on the financial world and presidential politics from mid-2007 to early 2011. The book begins with Sept. 17, 2010; then looks back to the financial crisis in 2007 as candidate Obama approached it; and then moves forward to early 2011, where the Obama presidency is reviewed primarily with respect to the financial crisis. The book shows amazing research, even into brief meetings and one-on-one discussions throughout the crisis.

 

If the opening chapter’s homing in on Sept. 17, 2010, doesn’t ring a bell, I’ll clue you in. It was the day that, in the wake of that summer’s passage of the Dodd-Frank Act, President Obama called a press conference, featuring Professor Elizabeth Warren, where he announced the launch of her brainchild, the Consumer Financial Protection Bureau. Suskind sets the stage this way:

“President Barack Obama dances lightly down the four marble steps to the Rose Garden and across the flagstones to a waiting lectern. He still glides, elegant and purposeful, in that tall man’s short-step--a ballplayer returning to the court after a time out.

“Today, September 17, 2010, he has committed to putting some ‘points on the board,’ in the parlance of Rahm Emanuel, his chief of staff. The president needs to show the country that he hasn’t lost his game, the ineffable confidence, the surety of stance and delivery that propelled a man with little political experience to scale cosmic heights and to realize what felt, on Election Day, like democracy’s version of the moon landing.”

As Suskind describes the various players in the scene—the President, Secretary of the Treasury Timothy Geithner, and Warren—he features mini flashbacks that establish what was going on, and what was really going on. Through the book, one gains a feel of an insider being there, in the halls of government and in the offices of the nation’s financial giants.

  

As a trust officer who experienced the collapsing bond and stock values in our clients’ portfolio, I thought the first part of the book was fascinating. The reader is able to visualize the uncertainty and the stress that accompanied the main players at that time, including Goldman Sachs, Bear Stearns, Lehman Brothers, Merrill Lynch, and others. Insight is given to their leaderships’ thought processes and the hurdles that were part of the crisis showing every emotion possible as deals were struck, alliances made, and companies bankrupted.

Of particular interest to me was the narrative on the housing bubble’s collapse and the complete loss of direction by many of the country’s financial leaders. Without a point of reference from the past, loyalties were created that focused on praise and acceptance of almost anything suggested by the Obama camp.

With the markets collapsing along with financial company balance sheets, a near panic by some executives is described. Key players in the financial industry leadership are portrayed as indecisive and doing whatever is needed to protect personal turf and reputation.

But not all. Some executives were more realistic, rose above those concerns, and made decisions to lessen the severity of the crisis.

The description of Carmine Visone of Lehman Brothers was very interesting, his being portrayed  as an arrogant Wall Street banker on one hand, but also as one who knew where he came from and actively gave back to those less fortunate. Greg Fleming of Merrill Lynch is described as someone who saw the risks and tried to do what was best for his firm’s clients and employees. While not entirely successful, he is seen as someone with a keen understanding of the dangers during a period of very high confusion, who had to work with other executives who were mostly concerned about personal reputation.

 

Throughout this tumultuous time, the Democratic primary is being played out as Obama makes his run for the nomination and then the general election. The emotion of the electorate who sought Obama is outlined, some in search of government jobs and many others just looking for someone who seemed to have the answers. The book describes the superstar worship of Obama as the general election approached and throughout the first months of his presidency.

Many who gained access to Obama as he was forming his government were completely enamored and sought to be part of the team, for either personal glory or to be part of what to appeared to be a perfect economy and society, as Suskind portrays things.

While reading the book, I was amazed at the blind acceptance of anything suggested by the Obama team. Perhaps the same hero worship is part of all new administrations, no matter the party affiliation, as common sense is put aside for a rising star.

There’s a lesson in that. Also, the first part of the book, describing the financial crisis, may be a helpful source for would-be business leaders. It provides evidence that no matter how far one climbs the corporate ladder, near panic and confusion are still very possible.

 

Most of the book describes the Obama administration from its high at the beginning to its current less popular status, and that material is much less interesting.

There are many private conversations and meetings recounted that describe President Obama as he copes with the Congress, Republicans, and financial leaders. These parts of the book did not hold my interest as well as the first part. Perhaps this was because the discussions tended to be repetitive--different players talking about the same matters, over and over. At times the President is portrayed as someone lacking direction. While one may agree with that picture, it is not that interesting to read, in this part.

Still, overall when one considers the first sections, and then the sheer detail level--the meticulous gathering and portrayal of conversations, thoughts, and feelings of President Obama, business leaders, and Obama’s staff--the book is impressive.

There is much more to be written about the current administration but Confidence Men provides a lot of detail in the workings of the Obama White House in the first two years. Confidence Men book should serve as a strong source for background as the Obama administration is viewed from a historical perspective in the months and years ahead.

 

 

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