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The Buzz from Michael Grunwald's Book About Obama Economic Policymaking...

POLITICO Morning Money:

Quotes from Michael Grunwald’s stimulus book http://amzn.to/Mm3fgF:

Geithner told Romer there was more stimulus in TARP than in the stimulus. She shot back that there was more financial rescue in the stimulus than the financial rescue… p. 116.

At their monthly lunches, Christy Romer prodded Bernanke: ‘You need to do more monetary stimulus!’ But Bernanke didn't want to unless he absolutely had to. As he reminded Romer, there were other ways to jolt the economy: ‘You need to do more fiscal stimulus!'… p. 391.

Politically, when you give people a tax cut, you want them to notice it and appreciate it and remember it. This felt like sending flowers to a romantic interest without signing the note. Rahm argued that 'we're denying ourselves an Ed McMahon moment,’ the grateful squeal of Publishers Clearinghouse pleasure that would greet an envelope arriving from Obama… pp. 126-128.

Romer: I understand that there's a Treasury secretary. I'm tired of having three… p. 336.

Obama: Look, I get the Keynesian thing. But it's not where the electorate is… p. 338.

And, of course, Grunwald gives Christy Romer's side of the anecdote told by Ron Suskind--the one where Suskind claimed that when Obama first met Romer, "before exchanging hellos or even shaking hands", Obama said that monetary policy had "shot its wad" thus shocking Romer with the sexualized reference.

Romer has maintained--from the day Suskind's book came out--that Suskind had it wrong: that Obama had not said it, she had; that she had meant it as a reference to seventeenth-century firearms musketry technology. This means that Suskind's "before exchanging hellos or even shaking hands" is, in the words of Pooh-Bah: "merely corroborative detail, intended to give artistic verisimilitude to an otherwise bald and unconvincing narrative".

On page 472, Grunwald writes that Suskind has promised to correct the scene in his paperback.

Moral: if you tell your sources that you are going to let them see relevant portions of the ms. to make sure there are no errors, show your sources the relevant portions of the ms. to make sure there are no errors, or you may wind up in substantial trouble.

There remain two enormous mysteries about the Obama White House:

  1. What the White House thought it was doing between the passage of the ACA in the spring of 2010 and Labor Day in the fall of 2011.

  2. The enigma of Tim Geithner. I am confident that he is not "playing the invisible invincible shadow master role pioneered by Dick Cheney", as Moe Tkacik summarizes Ron Suskind's take on him. But Noam Scheiber did not advance our understanding. Can Grunwald? I don't claim to know what went down--I lost my ability to track Geithner's (and Bernanke's) thinking sometime in the late summer of 2009, if I indeed understood it earlier…

And I would draw particular attention to page 338. If Obama does not understand that his job is not to please the electorate by indulging its prejudices but rather to manage the path to a strong economy, he needs to be told what his job is every hour of every day until he does understand that.

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