The men don’t know but the little girls they understand

This profile of wonk player extraordinaire Peter Orszag is well worth your perusal. The main upshot is that, at least since Clinton made Rubin Treasure Secretary, and maybe earlier, there has been no line between Wall Street and the White House economic team.

From what I’ve read, Orszag was a great CBO director, but it’s hard for me to see his personal appeal. The whole thing is worth a read; I liked this passage best, because of the smugness and lack of answers.

Reich was there, and he told me that after the meeting, he confronted Rubin about the meltdown. “I asked him why did the crash happen? He said, ‘It was a perfect storm. It was a once-in-a-lifetime event.’ ” Reich, like many progressives, sees 2008 as a reassessment of the Rubin way. “Why was there a complete implosion, if Wall Street is so smart, if markets work so well?”

Orszag understands what’s fueling the populist fervor. “You don’t go through a 45 percent decline in private-sector borrowing without tensions flaring,” he says. At Citi, he’s seeing the system from the inside and developing a more complex view of it, whereas the recent political debate was stripped of all nuance.

“Almost inevitably, the public will think the administration is too close to Wall Street unless it blows up Wall Street, and Wall Street will think the administration is a bunch of flaming liberals if they don’t completely shut down that populist anger,” he says. “Sometimes the small things matter a lot, the odd phrase here, the meeting there that wasn’t handled exactly right. The conversations have been very fraught over the past two years. [Bill] Daley will help on that. It’s also the case that time and moving away from crisis mode will help, too.”






59 replies
  1. 1
    Observer says:

    From what I’ve read, Orszag was a great CBO director

    Doug, again with this? Orszag was a great schmoozer.
    At the CBO, his unemployment prediction during 2009 was completely blown out of the water in a scant 6 months.

    It’s a tribute to his schmoozing skills that his head isn’t on a (figurative) platter.

  2. 2

    “moving away from crisis mode will help, too.”

    Yeah, it’s time to move away from crisis mode now that unemployment is ONLY 9%.

  3. 3
    David in NY says:

    The guy clearly has no clue. I don’t care how smart people say he is.

  4. 4
    cat48 says:

    Actually, unemployment has fallen the last 4 months in a row to 8.8%.

  5. 5
    Chris says:

    OT, but it’s official: Romney announces candidacy (http://news.yahoo.com/s/ap/us_romney2012).

  6. 6
    Violet says:

    He’s also a cheater:

    White House budget director Peter Orszag’s ex, shipping heiress Claire Milonas, gave birth to little Tatiana Zoe in New York Nov. 17. That was just six weeks before Orzsag and ABC news babe Bianna Golodryga gleefully announced their engagement on national TV and in the press.

    Or maybe he’s a jilter. In any case he’s an ass.

  7. 7
  8. 8
    Skipjack says:

    Worrying about these peoples’ personalities is pointless. So much worry- it’s catching, and debilitating.

  9. 9
    danimal says:

    I’m amazed at how important hurt fee-fees are to the Wall Street crowd. Honestly, you would think that all they cared about were balance sheets and profit opportunities, but instead we get sentences like this:

    “Almost inevitably, the public will think the administration is too close to Wall Street unless it blows up Wall Street, and Wall Street will think the administration is a bunch of flaming liberals if they don’t completely shut down that populist anger.”

    Why the hell do they care that people are angry at them? They stole the money, and they get to keep it. Why not let us be angry at them while they point and laugh at their marks?

  10. 10

    Rubin warned of the risks of derivatives. Notably he was out of DC when Clinton signed the Commodity Futures Modernization Act. His warnings appear in published writings well before the crash. He has never shown any sign of thinking that Wall Street is smart and markets work well. He made a ton of money on Wall Street. That wouldn’t be possible if Wall Street were smart or markets worked well.

    One of his first acts when moving from Wall Street to the White House was to ask the deputy assistant secretary of the treasury for policy analysis (Brad DeLong) to develope a practical proposal for a Tobin tax. His Wall Street related proposal was the same as the no global proposal.

    Oddly, liberals have a very different views of Soros and Rubin. Soros is OK even though he made a ton of money in finance. Rubin is not. Can you name one issue on which they disagree ?

    To take a step back, what do you know about Rubin except that he was CEO of Goldman Sachs and later Secretary of the Treasury ? Please don’t bore other readers with the full list here in the thread. You can e-mail me at
    robert.waldmann@gmail.com

    I haven’t clicked the link yet, but I don’t see the basis for your claim that “there has been no line etc.” I should point out that the Treasury Secretary works in the Treasury building not the White House. The CEA chairperson is part of the team. Romer has no links to Wall street. One of Taibbi’s pieces of evidence for the alleged bankster takeover was the replacement of Goolsbee who is now CEA chair. I’m quite confident that Taibbi now would point to Goolsbee’s position as proof that bankers control the Obama economic team. He has no respect for facts, is perfectly willing to make totally false claims, and will always reach that conclusion.

  11. 11
    AAA Bonds says:

    What a fuck. He can burn in hell.

  12. 12
    Jay C says:

    “Almost inevitably, the public will think the administration is too close to Wall Street unless it blows up Wall Street, and Wall Street will think the administration is a bunch of flaming liberals if they don’t completely shut down that populist anger,

    OK: pop quiz for the class: Whose opinion do you think is likelier to prevail in the formulation of government policy?

    A) The public’s
    B) Wall Street’s

    No fair peeking…..

  13. 13
    BR says:

    The main upshot is that, at least since Clinton made Rubin Treasure Secretary, and maybe earlier, there has been no line between Wall Street and the White House economic team.

    Actually, go back a little further – Donald Regan was Reagan’s treasury secretary and before that was CEO of Merrill Lynch.

  14. 14
    Comrade DougJ says:

    @Robert Waldmann:

    I haven’t clicked the link yet, but I don’t see the basis for your claim that “there has been no line etc.”

    Let me go through this slowly. I said the upshot of the article was that there is no line. That means that is what the article is saying. If you do not follow the link to the article, you cannot assess how accurately I am describing the article.

  15. 15
    Loneoak says:

    “Sometimes the small things matter a lot, the odd phrase here, the meeting there that wasn’t handled exactly right. The conversations have been very fraught over the past two years.

    The only people who believe that little phrases hurt are people who believe it is very important to balance the fee-fees of Wall St. mega-titans and the populist anger over the feudal income disparities in this country.

    /sharpens pitchfork/

    Smug little fuck.

  16. 16
    Sentient Puddle says:

    @Observer:

    At the CBO, his unemployment prediction during 2009 was completely blown out of the water in a scant 6 months.

    Uh…what? Orszag left the CBO in 2008.

  17. 17
    Linnaeus says:

    @danimal:

    Why the hell do they care that people are angry at them? They stole the money, and they get to keep it. Why not let us be angry at them while they point and laugh at their marks?

    If I were to hazard a guess, I’d say it’s because once one has risen to a certain level in the financial sector, it’s no longer about the money, but about (dare I say it) hegemony. The folks who run the show on Wall Street see themselves as part of a wider power elite (C. Wright Mills is worth another look if you have the time) and simmering populist anger means that their ability to control the discourse in this country, and hence get the people to accept their primacy, is at risk. Maybe just a small risk, but these folks don’t want to take any chances.

  18. 18
    danimal says:

    @Jay C:

    Whose opinion do you think is likelier to prevail in the formulation of government policy?
    _
    A) The public’s
    B) Wall Street’s
    _

    Oh, oh. Over here. I pick “B”.

    What do I win?

    ETA: FYWP

  19. 19
    Jay C says:

    @danimal:

    Heh. Nothing. It’s a trick question.

    (in the “trick or treat” sense…)

  20. 20
    Chris says:

    @Linnaeus:

    I also suspect that the more highly placed and sheltered your existence, the more delicate and easily bruised your feelings tend to be.

  21. 21
    Linnaeus says:

    @Chris:

    Quite.

  22. 22
    ed drone says:

    @danimal:

    What do I win?

    He said ‘no peeking!’

    You’ll get yours, just as we all will, good and hard.

    Ed

  23. 23
    Bob Loblaw says:

    @danimal:

    Isn’t it obvious?

    What else could they value except for status and esteem? You’re right, they do have all the money, and the power, and the influence. But what you get turns into what you have, and what you have becomes boring and dull.

    Simply being rich, powerful, and secure forever and ever isn’t enough. They have to be exalted and respected and feared and beloved too. Or else, what’s the point?

  24. 24
    bkny says:

    “Sometimes the small things matter a lot,

    ‘small things’ …?!?!

    these fuckers are so far removed from the consequences of their actions; it’s hopeless to think they can even factor in the concerns of others not in their circle.

  25. 25
    Villago Delenda Est says:

    Bernie Madoff went to jail for this sort of shit.

    Because he stole from the rich.

    If you steal from the non-rich, there are no fucking consequences.

    Yet.

  26. 26
    bourbaki says:

    @Robert Waldmann:
    Wait so why was it that he so vigorously opposed Brooksley Born in trying to regulate derivatives?

    I guess according to this article

    Mr. Rubin, now a senior executive at the banking giant Citigroup, says that he favored regulating derivatives — particularly increasing potential loss reserves — but that he saw no way of doing so while he was running the Treasury.

    “All of the forces in the system were arrayed against it,” he said. “The industry certainly didn’t want any increase in these requirements. There was no potential for mobilizing public opinion.”

    but then again

    Mr. Rubin and Mr. Levitt called on Congress to prevent Ms. Born from acting until more senior regulators developed their own recommendations. Mr. Levitt says he now regrets that decision. Mr. Greenspan and Mr. Rubin were “joined at the hip on this,” he said. “They were certainly very fiercely opposed to this and persuaded me that this would cause chaos.”

    Ms. Born soon gained a potent example. In the fall of 1998, the hedge fund Long Term Capital Management nearly collapsed, dragged down by disastrous bets on, among other things, derivatives. More than a dozen banks pooled $3.6 billion for a private rescue to prevent the fund from slipping into bankruptcy and endangering other firms.

    Despite that event, Congress froze the Commodity Futures Trading Commission’s regulatory authority for six months. The following year, Ms. Born departed.

    In November 1999, senior regulators — including Mr. Greenspan and Mr. Rubin — recommended that Congress permanently strip the C.F.T.C. of regulatory authority over derivatives.

    So I guess what he was for regulation before he was against it before he was for it? Funny how the words and deeds don’t seem to totally match up…

  27. 27
    Mnemosyne says:

    @Linnaeus:

    Fred Clark related an interesting story about Saddam Hussein (it’s Case Study No. 3 in this post):

    We know that Saddam wanted their love — uncoerced, untainted by fear — because he wrote a novel and released it secretly under a pseudonym. The love and acclaim the people would pour out for this anonymous author, the dictator hoped, would be genuine and voluntary and he would at last know what it meant to be loved in truth and not just to have others falsely proclaim their love for him out of fear of torture and death.
    __
    But alas, the novel was apparently awful. It was panned and mocked and it did not sell.
    __
    That was intolerable for the tyrant, so he leaked the true identity of the author. Suddenly all the critics who had found it wanting recanted, lavishing it with forced praise. It became a best-seller in Iraq, but only in Iraq — only in the one country where people were forced, out of fear and the threat of torture, to pretend that they loved a man they actually despised, a man who deserved to be despised because of those very threats of torture.

    In one of those weird quirks of human psychology, I think that our oligarchs really do want us to love them. Not just grudgingly admire them, or agree with them, but actually love them. And if we don’t, they’ll use their power to make us pretend that we do.

  28. 28
    HyperIon says:

    @David in NY:

    The guy clearly has no clue. I don’t care how smart people say he is.

    I agree but I can’t resist my favorite rant these days: the many downsides of complexity.

    How can I (a humble coder who is smarter than your average bear) hope to evaluate the intelligence or morality or sincerity of ANY of the people who essentially control my life? NOW I feel certain he has no clue. How could I have know it before?

  29. 29
    ThatLeftTurnInABQ says:

    @danimal:

    Why the hell do they care that people are angry at them? They stole the money, and they get to keep it. Why not let us be angry at them while they point and laugh at their marks?

    Here’s a wild guess. Despite the obscene levels of luxury the truly super-rich in this country enjoy, they nonetheless do so while hovering on the edge of an almost Calvinistic abyss of insecurity, for several reasons (see below for details). This insecurity means that they crave social acceptance, much more so than elites in the past who took not only their current position, but its continuance into the indefinite future more or less for granted.

    The reasons:

    (A) Historically speaking, while the US has done a good job of supporting a class of super-rich people, the membership of individual families within this class has turned over with, from their point of view, alarming speed and frequency (See for example the lists of wealthiest families in Kevin Phillips’ book Wealth and Democracy). We don’t have much in the way of Old Money, much less a true aristocracy whose membership is stable over time. Not only that, but the prevailing mythology of how capitalism is supposed to work predicts that this rapid turnover is both to be expected and is a good thing.

    (B) The smarter members of our super-rich understand that the global economy is close to hitting some very serious barriers to sustainability, in the form of Peak Oil, AGW, etc. Eat drink and be merry, for tomorrow we may…

    (C) The really smart ones may have an understanding of just how parasitic the FIRE sector (which they’ve been making their money from) is with respect to the rest of the economy.

  30. 30
    Mnemosyne says:

    @bourbaki:

    I don’t know what you did to your blockquote to make it turn out like that, but it looked awesome. Seriously. It’s like Lewis Carroll wrote your comment.

  31. 31
    sukabi says:

    what I got from that is that the grand strategy is to wait for mass amnesia to set in so they can set about plundering on a grand scale again…

    it’s the childbirth effect… most women forget exactly how painful childbirth is, so after a couple of years (months for some) they go out and do it again… “The last time wasn’t THAT bad”….

  32. 32
    Surly Duff says:

    @danimal:
    And th only way they can comfort themselves by eating at fancy restaurants, living in luxury apartments, and bathing in caviar.

    Why can’t you feel their pain, you ingrate?

  33. 33
    piratedan says:

    kudos for The Knack reference, its a damn shame that all monetary policy for the last four decades has been made by people that apparently believe that fairness isn’t important as long as they can make a buck.

  34. 34
    bourbaki says:

    @Mnemosyne:
    I couldn’t figure out how to get the paragraph structure inside the blockquote so decided for multiple blockquotes. Unfortunately, I then forgot to close the blockquote. Result: Craziness.

    I think I fixed it now.

  35. 35
    Walker says:

    Orzag is still not the ass Geithner is. At least he is out of the administration. Geithner is still screwing us over. I am fully expecting to hear a Geithner-approved austerity measure on Wednesday.

  36. 36
    Xenos says:

    @piratedan: @piratedan: The Knack? The Doors! And the Howling Wolf before him.

    Edit- did not know this, but like many great tunes it was written by Willie Dixon.

  37. 37
    Linnaeus says:

    @Mnemosyne:

    Yeah, I think there is something to the argument that the elites want our love; some of it is for emotional reasons, some of it for rational. That’s why I mentioned hegemony; if you can shape the way people even think about you, even a little, that goes a long way in maintaining your position.

  38. 38
    sukabi says:

    @Linnaeus: simple fact of life, if you’re “loved” people will let you pretty much do what you want, will believe anything you tell them…until you kill them or someone they love more than you.

    so yes, being “loved” is part of their strategy to hold power.

  39. 39
    singfoom says:

    @HyperIon: As another coder, I would suggest Test Driven Politician Analysis.

    Write the test, make it fail, then make it pass, just like coding.

    There’s a bunch of statements that those people you’ve referred to have made. There are also a bunch of actions that they’ve committed.

    Statements == Actions? If so, pass. If not, fail.
    If they fail, they’re not sincere.

    Though they could have changed their mind. Mind the chronology.

  40. 40
    piratedan says:

    @Xenos: hey man, everything old is new again, what demographic era you think rules here?

    Be careful or else I’ll be forced to whip out a reference to
    a) The Raspberries b) The Equals or c) The Dave Clark Five.

  41. 41
    Villago Delenda Est says:

    The Strawberry Alarm Clock.

    There, I said it.

  42. 42
    Zifnab says:

    @singfoom:

    There’s a bunch of statements that those people you’ve referred to have made. There are also a bunch of actions that they’ve committed.

    It’s more complex than that. You’ve got 435 if/then statements floating out there. And you’ve got promises that contradict other promises. And you’ve got political realities of ’11 that are fairly different from the realities of ’08.

    I mean, how do you even begin to evaluate the ACA? That’s a mish-mash of promises made and broken if ever there was one. Do you blame Obama for scuttling the public option to win the Lieberman vote? Do you blame Lieberman? Or both? :-p

    As a Texas resident it hardly matters. Nobody I vote for ever gets the benefit of my vote anyway.

  43. 43
    Keith G says:

    Hey Cole, wherever you are, you a great link-to from Steve Benen up at his place.

    http://www.washingtonmonthly.c.....028897.php

  44. 44
    Dennis SGMM says:

    @bourbaki:

    There was no potential for mobilizing public opinion.

    Right, because no one shit themselves when they looked at their 401K post-crash. I think that what he actually meant was, “We dare not pursue finreg while the iron was hot because people would have applauded if we hanged my Wall Street buds from lamp posts.”

  45. 45
    Studly Pantload, Vibrant Trollbot for Obama says:

    @sukabi:

    “most women forget exactly how painful childbirth is”

    Why do I get the feeling there are googleteen millions of offspring out there who would disagree with this statement?

  46. 46
    Observer says:

    @Sentient Puddle:
    Got mixed up in acronyms. Meant OMB and its predictions.

  47. 47

    What the hell was going on in that Waldman post? Why do people who lie about shit in order to make the establishment look better bother coming and posting here?

    As an addendum: don’t understand why I’m supposed to think O did a good job. Pro-Wall Street liberalism is not something I’m on board with.

  48. 48
    Studly Pantload, Vibrant Trollbot for Obama says:

    @Keith G:

    Lo: Wootness.

    And here people thought Cole’s keen focus on Sully would amount to only so much monkey spanking. (Not that the phrase “keep fuckin’ that chicken” didn’t go through my mind once or twice, but really, I do think I understand the motives at work.)

  49. 49
    bourbaki says:

    @Dennis SGMM:
    In his defense he he seemed to be arguing that the political conditions at the time (i.e. late ’90s) wouldn’t permit it. Of course this was from the point of view of 2008 so one should take that with a grain of salt.

    Its a good example of the:

    “You have to believe me, I really wanted to do good thing X, but the political climate/congress/lobbyists/center-right voting public wouldn’t let me. Please ignore the fact that I instead I did not-X,”

    This seems to have become a fixture in right-democrats rhetorical toolbox.

  50. 50
    singfoom says:

    @Zifnab: I appreciate the seriousness of your reply to my un-serious comment. Might I suggest (in jest) a very complicated switch statement?

    Or perhaps we need a cross-referenced relational database to store all of these values.

    All I know is that Lieberman is droopy dog. That would be in every case…

    Damn these politicians! They’re making me write shitty code!!!

  51. 51
    Dennis SGMM says:

    @bourbaki:
    Thank you for sorting me out on that one. You’re observation re the right-democrats is spot on; no sense fighting like hell for the right thing: I mean we’ll probably lose anyway so why try? We can’t win all of the battles – or even most of them. It would be gratifying to see my party at least try.

  52. 52
    Dennis SGMM says:

    Arrgh! “you’re.” Curse you, spellcheck!

  53. 53
    Jasper says:

    You have to love the view from the top.

    “Sometimes the small things matter…” For the big boys, it’s “the odd phrase here, the meeting there that wasn’t handled exactly right.” It’s tough being a plutocrat, but thank goodness Daley is there to help THEM get over their difficulties.

    For the rest of us, it’s the still collapsing housing market, the personal bankruptcies, the foreclosures, the growing ranks of the poor, the under/unemployment rate at 15%, the declining wages, the destruction of the middle class.

    I want to hit Orzag in the face. I doubt he meant it in the way it’s presented, but you get the distinct impression the rest of the country’s life and death struggles are an abstraction, something that they “worry” about like they “worry” about small cap versus large cap as an attractive asset class.

  54. 54
    Bill Murray says:

    so you’re calling Orszag a Back Door Man?

  55. 55
    sukabi says:

    @Studly Pantload, Vibrant Trollbot for Obama: was referring to the process of childbirth, not the revenge some mothers inflict on the resulting child.

  56. 56
    Bruce S says:

    I have yet to read this post, but the Header – “The men don’t know, but the little girls understand…” is one of my favorite lines in English literature.

    Okay, now I’ll read the rest – but it’s going to be hard to measure up.

  57. 57

    @Bruce S:
    Willie Dixon = amazing

  58. 58
    DannyK says:

    Come on, Orszag is in the strata of Washington officials who are above ordinary questions of success and failure, and will always be well respected and end up in a cozy berth no matter how badly he screws things up. SEE ALSO: Alan Greenspan, George Tenet, etc. etc.

  59. 59
    Paul in KY says:

    @piratedan: I think it’s a Doors reference: ‘the men don’t know but the little girls they understand’.

    Edit: I see Xenos beat me to it & included the song writer.

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