A Presidency in Peril: The Inside Story of Obama's Promise, Wall Street's Power, and the Struggle to Control our Economic Future [Hardcover]

Robert Kuttner (Author)

Book Description

Publication Date: April 5, 2010

When Barack Obama took office in January 2009, he had an unprecedented chance to do what no other recent president could: seize the nation's financial reins from the corporate elite and return them to the American people. Progressives everywhere held out hope that their new leader would take advantage of the economic crisis he stepped into and enact bold policies that would evoke real financial reforms-putting Main Street in front of Wall Street, at last.

But that, writes Robert Kuttner, is not the way things turned out. Instead, America's best chance for radical financial reform turned into Wall Street's greatest victory. Obama filled his administration with allies of financial elites who were more interested in business as usual than in transformative change. As a consequence, Main Street remained mired in deep recession. Instead of being the instrument of economic renewal, Obama became the target of economic frustration.

In this hard-hitting, incisive account, Kuttner shares his unique, insider view of how the Obama administration not only missed its moment to turn our economy around-but deepened Wall Street's risky grip on America's future. Carefully constructing a one-year history of the problem, the players, and the outcome, Kuttner gives readers an unparalleled account of the president's first year.

More importantly, though, Kuttner shows how we could-with swift, decisive action-still enact real reforms.

This is a book not to be missed by anyone who wants to understand exactly how Wall Street won, and how Main Street can still fight back.

Editorial Reviews

From Publishers Weekly

Before Barack Obama's first year in office was over, the whisper of failure was already on lips of disillusioned progressives like Kuttner (Obama's Challenge). For The American Prospect co-founder and co-editor, Obama's embrace of Wall Street insiders like Timothy Geithner, Robert Rubin, and Lawrence Summers irrevocably sullied the President's message of hope and change. Worse, Kuttner sees nothing original in Obama's responses to the recession; bailing out banks over homeowners and reappointing Federal Reserve Chairman Ben Bernanke were simple retreads of Clinton and Bush II policies. Indeed, Kuttner argues that Obama ignored the template for economic recovery set by Roosevelt during the Great Depression, preferring to seek consensus on all fronts and failing to adopt more radical measures to restore the economy to health. Since it's already too late to "seize a Roosevelt moment," Kuttner sees Obama's best hope in a Harry Truman-style resurrection by finally taking on obstructionist Republicans, remaking himself as a "plainspoken man of the common people," and opening himself to proposals from the left wing of his own party. Kuttner remains optimistic, but pulls no punches: a "feckless" Obama has disappointed American voters with more of the same.
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

From Booklist

*Starred Review* Kuttner follows his previous work, Obama’s Challenge (2008), with a scathing criticism that Obama has thus far followed in the footsteps of his predecessor, favoring Wall Street and failing to rein in its more rapacious practices. Drawing on investigations, testimony, and his own research, Kuttner details the outrageous characters and deals that have saved firms with political clout (Citibank) and shut down those without it (Bear Stearns and Lehman). He further details the enormous influence of Goldman Sachs in a system of “crony capitalism,” a revolving door of Goldman alumni who have worked for administrations dating back to the Clinton era and are now calling the shots behind the scenes in the Obama administration. By propping up failed institutions, Obama is prolonging the agony of the financial crisis, argues Kuttner. Even worse, the administration is squandering an opportunity for real financial reform on a level comparable to that of the New Deal era. Rather than prop up failed banks, the administration should have recapitalized them and restructured the entire banking system, regulating exotic derivatives and providing needed consumer protections. Kuttner argues passionately for a progressive movement to hold Obama to the promise he represented of real change in a system that continues to favor the wealthy and influential over common working Americans. A powerful, passionate work with strong arguments for how Obama might save his presidency and—more importantly—reform the American financial system. --Vanessa Bush

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Product Details

• Hardcover: 332 pages
• Publisher: Chelsea Green Publishing (April 5, 2010)
• Language: English
• ISBN-10: 1603582703
• ISBN-13: 978-1603582704
• Product Dimensions: 9 x 6.1 x 1.3 inches
• Shipping Weight: 1.4 pounds (View shipping rates and policies)
• Average Customer Review: 4.5 out of 5 stars  See all reviews (15 customer reviews)
• Amazon Best Sellers Rank: #337,999 in Books (See Top 100 in Books)

More About the Author

Robert Kuttner is cofounder and coeditor of The American Prospect magazine, as well as a
Distinguished Senior Fellow of the think tank Demos. He was a longtime columnist for
BusinessWeek, and continues to write columns in the Boston Globe.
His previous and widely praised books include The Squandering of America: How the Failure
of Our Politics Undermines Our Prosperity; Everything for Sale: The Virtues and Limits of
Markets (about which Robert Heilbroner wrote, "I have never seen the market system better
described, more intelligently appreciated, or more trenchantly criticized than in Everything for
Sale"); The End of Laissez-Faire: National Purpose and the Global Economy After the Cold
War; and The Economic Illusion: False Choices Between Prosperity and Social Justice.
Kuttner"s magazine writing has appeared in The New York Times Magazine and Book Review,
The Atlantic, The New Republic, The New Yorker, Dissent,
Columbia Journalism Review, and Harvard Business Review. He has contributed
major articles to The New England Journal of Medicine as a national policy correspondent.
Formerly an assistant to the legendary I.F. Stone, chief investigator for the Senate Banking Committee, Washington Post staff writer, economics
editor for The New Republic, and university lecturer, Kuttner"s decades-long intellectual and political project has been to revive the
politics and economics of harnessing capitalism to serve a broad public interest.

Obama's Challenge Web Site
Demos - A Network for Ideas and Action
The American Prospect

Customer Reviews

Most Helpful Customer Reviews

36 of 37 people found the following review helpful:

5.0 out of 5 stars Restoring the Audacity to Hope, May 2, 2010

By 

Kevin L. Nenstiel "omnivore" (Kearney, Nebraska) - See all my reviews
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This review is from: A Presidency in Peril: The Inside Story of Obama's Promise, Wall Street's Power, and the Struggle to Control our Economic Future (Hardcover)

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Paul Kuttner gives disillusioned Obama voters the vocabulary to understand why the President who instilled such hope in 2008 leaves us so cold in 2010. While the administration chases increasingly unpopular ancillary goals, Americans worry about their pocketbooks, and watch Obama's economists squander his mandate by protecting the people who created our mess. President Obama lets the noble goal of bipartisanship trump actually getting anything done.

Kuttner, a political economist, dissects specifically the administration's poor fiscal choices in its first fourteen months. He isn't a historian, polemicist, or journalist; he presents no illusion of completeness or reportorial balance. Kuttner doesn't deny that he wishes Obama were more proactive and Keynesian, and that he's urging the President further to the left. He writes in hopes that Obama can reclaim the initiative and turn a failing economy around.

This book spares no personalities. Kuttner's chief enemy isn't the Republican minority, but the Robert Rubin branch of the Democratic party. Rubin as much as anyone bears personal blame for the current snafu, but Obama's economic team is dominated by Rubin protégés. Instead of boldly wading in to repair the deeply damaged economy, Obama has stayed hands-off, letting Rubin, Geithner, and Bernanke molly-coddle those who created our economic mess.

Massive TARP funds stopped mega-banks from hemorrhaging money, but did nothing about the institutional gangrene that created the problem in the first place. The administration has kept the executives who created the mess in charge of the banks they destroyed, falsely claiming helplessness as the execs award themselves end-of-year bonuses totaling more than the banks' net revenues, bonuses only possible through direct transfusions of taxpayer money.

Meanwhile, regional banks that followed rules see their securities turn to worthless paper, and go into receivership, thanks to trickle-down sleaze. Supposed fire-breathing populists like Barney Frank write cut-rate gifts to the most rotten banks, while voices like Sheila Bair and Elizabeth Warren, standing for responsibility and reform, find themselves in the margins. The rot is bandaged but not repaired. And our President seems strangely absent as this continues.

It doesn't have to be this way. Kuttner looks back to FDR, Lyndon Johnson, and even George H.W. Bush for examples of Presidents who stood against economic chicanery. And he turns to two Democratic Presidents for examples of how an administration can recover after initial serious missteps. Will the Obama administration, he wonders, resemble another Bill Clinton, or will our President redeem himself with the populist efficiency of Harry Truman?

Movement progressives looking for a voice to unite themselves against the interests should read this book. It provides the facts, the names, and the patterns that made our mess possible. And it urges a clean break with the past, a break Obama refuses to make. Perhaps this is the knowledge we've needed to stop sitting on our collective hands and reclaim the initiative we enjoyed two years ago. Robert Kuttner offers the hope Barack Obama did once upon a time.

25 of 28 people found the following review helpful:

5.0 out of 5 stars A Presidency in Peril, or a Country in Peril?, June 9, 2010

By 

Herbert L Calhoun "paulocal" (Falls Church, VA USA) - See all my reviews
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This review is from: A Presidency in Peril: The Inside Story of Obama's Promise, Wall Street's Power, and the Struggle to Control our Economic Future (Hardcover)

This is the book I thought I was buying when I bought the "valentine to Obama" by Jonathan Alter called "The "Promise." Alter's book, disappointingly, proved to be little more than a gift-wrapped package of apologies for Obama's meager accomplishments so far: all done without any serious policy analysis. Alter makes Timothy Geithner a hero?

Not so here. In this carefully researched nuanced brief, Kuttner is not afraid to call a spade a spade. He puts his analysis where his mouth is, and in doing so, provides some serious behind-the-scenes revelations bout the cabal responsible for the financial collapse, albeit from an avowedly progressive perspective. Thank god however, this did not turn out to be just another Obama apologia. As a "born-again ex-Obama supporter," I share the author's main concern: That our new President has spent all of his political capital chasing the "phantom of bipartisanism" by "hacking," "tacking" and "triangulating" his way to the right. In the process, he has had to cozy up to the Wall Street crowd, led by Bill Clinton's buddy, Robert Rubin, and also at the same time, has found it convenient to jettison his base: the progressives (like me) who "went to the well" for him during the election. Kuttner makes the point that once we progressives have elected Obama it is still our duty to help keep him honest? Well, excuse me? I thought that was precisely why we elected him? Why is it that the Republicans do not have to "keep their elected officials" honest, when we democrats do? Why do, once we have elected them, they get the religious bug to want to move to the "non-existent center?" All of a sudden, once elected, democrats (but not the Republicans) have found the new (non-existent) religion of bipartisanism?

So far, the Obama "rope-dope-for-hope" move to the center has gotten us nothing but an expanded insurance system written in big Pharma's sweet spot. As I recall there were no more than one or two Republicans who signed up to it, even though Obama gave away all of the items important to his base like the single-payer system, and the public option, etc. Stripped of its progressive features, I feel like Obama used his bipartisanism to pee on our leg and tell us it was raining?

Here, Kuttner has taken us deep into the bowels of the entire system of high-level financial corruption, and has made it about as transparent and as clear as it is ever likely to get in the U.S. Only the two hour pod cast by "This American Life" on the same subject has come close to making it clearer. What is NOT made so clear in this book however, is why Obama had to do it: why he had to ignore his base and move to the right where he got nothing in return? Is he just a "closet" neocon himself? Or, is he just paying back his `Big Dog" donors for their campaign contributions? Or, is it as his ex-Minister said: "Obama is just another Chicago politician?" Or does he think he can just continue to finesse us (his base) until 2012 rolls around and then give us a symbolic "song and a tap dance," show up in a few Black churches, with a new sheaf of "pretty speeches" and we'll just snap back in line? No chance this time.

Whatever is the correct answer, I agree with this author: that we are now in a multigenerational "Reagan type trickle-down holding pattern;" another Cheney/Bush jobless recovery. I also agree with him that we progressives need to get up off our duffs, stand up on our hind legs and bark back at Osama's "rope-a-dope-for-hope strategy." Its time to take to the streets and let the White House know we are not going to be "stiffed" any longer. Here Kuttner has identified the ringleader as Bill Clinton's financial guru, Robert Rubin. But I believe it is clear that the Rubin crowd, simply are picking the low hanging fruit: There simply were too few disincentives NOT to join the deregulated Wall Street orgy already in progress with Cheney/Bush. Said differently, they simply stole a couple of plays from the Cheney/Bush playbook. And voila, since the financial rescue package, it's been déjà vu all over again: continuing risky bets with our money, while the wall street pirates run out the "front door" with their pockets filled with mega-buck bonuses. For them, it is much more profitable to use our "TARP money" for risky credit default swaps that generate mega-million bonuses, than to lend to small banks that could then finance jobs for a speedy recovery. What happened to the idea of a common good on Wall Street?

So forget Osama's photo ops, we must continue to keep our eyes on the donut and not on the hole: What we see today, most flagrantly exposed in the Gulf oil spill, is just more of the same greedy, mean-spirited, shortsighted and short-term bottom line-at-all-cost piracy that we saw during the Cheney/Bush years. Only this time it's signed in blood in Osama's name, underwritten by his tendency to turn his head the other way and give us a new limp-wristed "pep talk." If this is hope that we can believe in, that audacious hope that he spoke of during the run up to the election, then we are as likely as not to see another serious crash in the economy before Obama's term ends. And Barrack Obama knows it.

It's the Corruption Stupid!

There is no way to fix what ails America from Osama's limp-wristed "audacious hope rope-a-dope" position: that is, with media spin, pretty speeches, demagoging the other side, and photo opts. What ails America is systemic corruption, as far as the eye can see. I know it; Obama knows it, and the American people know it.

The reason Wall Street is back up and "humming" while main street is still in the "intensive care" ward, and the "real" unemployment rate still hovers around 20 percent with no relief in sight, is the same reason we cannot fix the "credit default swaps;" it is the same reason the U.S Supreme Court expanded corporate contributions to a First Amendment right at a time that credit default swaps and illicit corporate money are the two key issues causing all of the nation's financial woes. It is the same reason that we have the Gulf oil spill: lax regulations bought and paid for by "Corporate USA Unlimited."

The systemic dysfunction in American politics is this: no matter how deep our problems get, the ruling cliques just keep using their illicit contributions to redefine their own crimes as "legal" and then, like a Mack truck, they just keep on running over the American people. In short, corporate corruption has eaten away the "protective coating" around America's democracy, and as a result, it is not only Obama's presidency that is in peril, our very system of democracy is seriously in peril as well. We are lethally exposed to a systemic evil that continues to metastasize.

Kuttner ends his very pessimistic analysis on an optimistic note. But his heart is not in it. He knows that while we thought we had elected a thoroughbred -- an intelligent leader with a backbone and a couple of cahones - what we got instead is just another Chicago politician. With the gulf oil crisis exposing his weaknesses and political nakedness even further, Obama has no choice but to bounce off the ropes trying to fight back as best he can. However, I believe it is too late. This President, for all the hope we had vested in him, is proving that he has been tarred with the same "corruption brush" that the Cheney/Bush crowd left us.

Kuttner has shown me enough. I am recalling my 2008 vote for Obama and am opening up a new "Rev Jeremiah Wright Institute for Political Reform" (across the street from Oprah's Harpo Enterprises). Nevertheless, this is a great book, for Kuttner shows here that while the American people may be down and out and almost powerless to change the system, we are not at all fools. Five stars

20 of 23 people found the following review helpful:

4.0 out of 5 stars Excellent reporting, and yet historically half-finished., April 26, 2010

By 

Patrick McCormack (New Brighton, MN USA) - See all my reviews
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This review is from: A Presidency in Peril: The Inside Story of Obama's Promise, Wall Street's Power, and the Struggle to Control our Economic Future (Hardcover)

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The reporting in this book is excellent, the kind of detail about how President Obama has made his choices, filled his cabinet, and created his policy alternatives -- the kind of detail that used to be reported in long articles in the New York Times and Washington Post.

The tone of the book is mildly alarmist. The author is concerned that the Obama team has triangulated towards Wall Street, towards advisors that support power and money institutions, and away from clear principles. This judgement, popular among progressives, is premature.

I have always believed that the test of a policy, left or right, is whether it persists in a workable fashion. It is a temporary victory to pass a bill, to announce a reform. A signing ceremony may be a cool thing, but there is something called implementation that has been given short shrift among political reporters. They have essentially gravitated towards a sports reporting model, concentrating on whom is winning the moment. This book, as well sourced as it is, has a bias. That bias is not the unobjectionable progressivism of the author, it is the desire for closure, too early in the complex Presidency of Barack Obama.

Surely, the test of this President is whether financial reforms allow stable growth in the American economy, and not whether some organizations got richer? Surely the test for health care reform is whether it expands coverage and lowers or contains costs? Yet halfway through the first quarter, we have pundits calling "game over".

This book should have been a long, detailed article, and the title should have been "Obama: The First Quarter". To be fair, the author does note that the timing is early, and that Obama is on the brink, not in the tank. This book is, then, an attempt to reel the Obama administration back into the fold, to exercise a containment on Obama's alleged excessive bent towards compromise.

Let me suggest a title for a next book by this fine reporter, this excellent writer, this premature commentator: The Obama Years: Did They Work?" In the meantime, progress reports could be done, not in book form, but in magazine form. In other words, I wanted history, and I got in the moment journalism. The resulting sense of peril is over-stated, and may or may not be correct. A book length version of this analysis risks being untimely... I would say read this book now, but by January, 2011, it will be superceded by events, by performance, by implementation, succeed or fail.