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Carol Felsenthal
On politics

Rahm’s Role in Fumbling the Economy: Tidbits from a New Obama Book

With the campaign season heating up, the Obama books keep coming. The latest: The Escape Artists: How Obama’s Team Fumbled the Recovery, by The New Republic’s senior editor Noam Scheiber, published this week by Simon & Schuster. As is the case in most Obama-related books, one of the most entertaining characters is Rahm Emanuel…

The Escape Artists book coverWith the campaign season heating up, the Obama books keep coming. The latest: The Escape Artists: How Obama’s Team Fumbled the Recovery, by The New Republic’s senior editor Noam Scheiber, published this week by Simon & Schuster. The book, which makes the point the that the “escape artists”—among them Larry Summers, Tim Geithner, and Christy Romer—prevented the country from falling into another Great Depression, but they failed to bring a recovery.

As is the case in most Obama-related books, one of the most entertaining characters in The Escape Artists is Rahm Emanuel, usually in the role of the president’s first—and most lively—chief of staff. Scheiber, who covered the 2008 campaign and the Obama White House, notes that he interviewed 250 people for this book, one of them Mayor-Elect Rahm on March 15, 2011.

Below are some highlights of anecdotes and often-profane quotes involving Emanuel—some from sources who, Scheiber writes, would talk to him only on “background” or “deep background.”

• Scheiber describes Emanuel as “a pragmatist with every ounce of his being…. When Emanuel ran the Democrats’ House campaign committee in 2006, a candidate asked him to clear the field of primary challengers as a condition of running. ‘Well, I guess if I can take care of Bill Clinton’s blow jobs, I can take care of that.’”

• Rahm saw leaving Congress to become Obama’s chief of staff as a sacrifice and didn’t mind saying so. “I’m going to rise up in the House leadership, be the first Jewish Speaker.”

• Emanuel presented himself as an expert on politics, not economics, yet he pushed for the stimulus bill to include “billions of dollars for high-speed rail….The economic team was nearly unanimous in opposing the idea…. But Summers was reluctant to pan Emanuel’s pet project, not wanting to alienate his powerful patron. `Larry wanted to be Rahm’s best friend; that’s where the power came from,’ said a White House colleague.” The idea for high-speed rail came from Rahm’s brother Zeke, who was staying with Rahm in D.C. and who happened to see the list of proposed “drab but high-bang-for-your buck outlays” as it came across Rahm’s home fax. Zeke told Rahm that there was nothing on the list that “really gets my heart racing,” and he suggested “…high-speed rail—getting from New York to D.C. in 90 minutes,” and so Rahm added $20 billion in high-speed rail to the list.  The cost would have been “roughly $100 million per mile.” (It was eventually reduced to $8 billion.)

• People who worked with—and were intimidated by—Rahm soon realized that he had a short attention span, that he “would lunge at causes… then abruptly drop them, only to reconsider… when the urgency returned.” He demanded that Geithner write a Wall Street reform bill that required a “rewrite of 75 years’ worth of financial regulations.” And he wanted it in a few weeks. Scheiber describes it as a “lunatic timetable…. Fortunately for Geithner, the dirty little secret of life under Emanuel was that if you just wait him out, his attention would soon drift to the next major obsession… and you could buy yourself a few months to maneuver.”

• Scheiber puts some of the blame for the “fumbl[ing] [of] the recovery on “members of his economic team,” including Geithner, who, Scheiber argues, put too much emphasis on reducing the deficit “and [on] members of his political team, like Emanuel, who assumed the public wouldn’t stand for another jolt of spending.” Scheiber writes that since the spring of 2009 “White House political aides like Rahm Emanuel and David Axelrod had worried that the deficit was repelling independent voters. ‘We’ve got to fucking do something on the deficit,’ one economic official recalls Rahm and Axelrod saying.”

• During Obama’s first year in office, Rahm was often portrayed as opposing the president’s push for the healthcare reform bill, believing instead that Obama should have dealt first with unemployment. However, Scheiber puts Rahm in agreement with Obama’s belief that if healthcare reform were postponed, “another generation would pass before a president tried again.” Christy Romer, then chairwoman of the Council of Economic Advisers, urged the president in a White House meeting to postpone healthcare in order to deal with the economic meltdown. “Before the president could say anything, Emanuel interjected: ‘If you look at what people accomplish in their first year, it’s most of what they accomplish. If you want to do this, now is the time.’”

• During the transition Emanuel argued that Larry Summers, treasury secretary under Bill Clinton and a former Harvard University president, should be Obama’s Treasury secretary. Emanuel tried unsuccessfully to persuade Tim Geithner to join the team as Summers’s deputy, a role Geithner had already played in the Clinton administration. The president went with Geithner, making Summers director of the subordinate National Economic Council.

• Jealous of his former underling Geithner, Summers liked to tell friends that Emanuel had closed one meeting (about stress tests for banks) by asking, “Does anyone understand a fucking thing Tim Geithner just said?”

• After Geithner gave a particularly inept speech in February 2009 on the financial crisis, “Emanuel began to treat the Treasury secretary like a half-witted student ….  Often he would summon Geithner to the White House twice a day and check in by phone between visits…. If Geithner was miffed by this treatment, he did not betray it…. `If Rahm wants to think he’s in charge, that’s fine.’”

• In early January 2009, President-Elect Obama called on House Speaker Nancy Pelosi in her office. “About halfway through [the meeting], the president-elect complained about Emanuel’s incessant knuckle cracking. Emanuel marched over to Obama and …cracked his knuckle loudly in Obama’s ear.”

A request for response to the book from Emanuel (through his press secretary) was not received by post time.

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