Like it or not, a lesson learned since the 2008 financial crisis is how interlinked the economy is with political decisions. Interest rates. Bailouts. Stimulus. Taxes. Austerity -- all of these things shape the direction of the economy and guide the boom-bust cycle. Investors ignore them at their own risk.
Last week I sat down with Ron Suskind, a former Wall Street Journal reporter and Pulitzer Prize-winning author of five books. His most recent, Confidence Men, details how President Obama managed the first two years of his presidency, particularly the economic crisis. Researching for the book allowed Suskind to interview virtually everyone who matters in Washington, including President Obama and Treasury Secretary Tim Geithner.
I asked Suskind a simple question: What does President Obama know today that he wishes he knew four years ago? Here's what he had to say (transcript follows):
Morgan Housel: The subtitle of your book is "The Education of a President," referring to Obama. Some have said that the education of a president is something you hope takes place before they becoming president. What do you think Obama knows today that he wishes he knew four years ago?"
Ron Suskind: One of the important things he knows is to not spend too much time with authors who have done a lot of reporting [laughs]. That's a joke -- actually, I disagree with that in a fundamental way.
I don't think anyone is ever really prepared to be president. I think history shows that over and over. It's almost unfathomable. Even in well-trained, well-skilled, brilliant people, when they get into that lonely round room are like, "My goodness. I couldn't have imagined this."
And interestingly, I think that over the last half-century, that office, as America's might and sweep has grown to really be an empire of sorts -- the world's most powerful nation in every possible fashion -- is that the job has become what you might call "beyond human scale." There's a nice little book that I recommend to people called Beyond Human Scale by Eli Ginzberg where he talks about the management of complex organisms both public and private. ... And there's a great moment at the start where he has Jack Kennedy ... where Kennedy is president just a little while, and he comes up with some idea that he thinks is a good idea. And he says to his advisors -- and Kennedy was a pretty savvy guy for a young man, because he had been in and out of government with his father and others for some years -- he says: "The question is not whether this is a good idea. It's whether the United States government agrees with me."
And it was a lovely little passage where Kennedy essentially said the U.S. government has a position on this. And it does. The U.S. government is a vast organism. And in interesting ways, each president, I think, lives in reaction to his or her someday-predecessor. I think Obama is just now coming out of the shadow of Bush, actually, which is why this period is sort of interesting.
But in terms of Obama being ready, well, Obama is actually in something of a special category. Because part of what was key to his electability is that he was a man with almost no record in public life. This wasn't just a fluke; he is such an able and perfect candidate not in spite of that but because of it. He had no record to shoot at! That's key in this wildly partisan, toxic era. You know, he emerges from the mist, and at a time of crisis, Americans could paint their yearnings on him at a moment of real fear, and their hopes as well. He was like a canvas, where we essentially could express yearnings.
And Obama got that -- he's a brilliant guy. But the fact is, he had never had a management job in his life. He had never made payroll, he had never managed a significant number of people. Largely, other people did the campaign. So he arrives here sort of uniquely undernourished in terms of running anything. He was basically running his one-man show throughout most of his life, and he steps on top of the most complex managerial organism on the planet. And he learned very hard lessons in the first two years, significantly because of that.
I think there's growth, and I marked that in the book, even though the White House was aggrieved that I showed so many missed opportunities that a president more skilled at exercising power might have, at that point, seized. Obama had never exercised power in any significant way. And at one point there was a White House advisor who says, "We're leaving around copies of Robert Caro's books" under this question of "What would Lyndon Johnson do?" Johnson, of course, a master at the exercise of power. And Obama had extraordinary opportunities in that first year especially -- second year as well -- where the various stakeholders were unmoored, whether it's the bankers or the health care providers, saying, "Whatever our position is in terms of what's good for us, we now at least have to entertain what might be good for the country, because we're in a time of crisis." He did not seize those opportunities, just to be blunt. And that's part of the evolution of Obama -- he knows this, I have no doubt about that. So right now you have to ask the question of will he begin to express those hard lessons as he begins a new era with a refreshed mandate.