>> you're watching booktv. coming up next, noam scheiber discusses why president obama's economic team has been unable to improve the economy even though many members of the team were successful in doing so in the 1990s under president clinton. this is about an hour, ten minutes. >> well, thanks for coming. i'm happy to be here. i think this is the first university setting that i've done, so i'm especially excited about that.

um, the thing i wanted to talk about today is less straight economic wonk erie than to weigh in on a debate that has encompassed and radiated out from barack obama really since he first got on the national scene. and this is the question of whether obama's bipartisanship is naive or is shrewdly strategic. and if you remember back in 2007 when obama was first running for president, the debate really broke out then. and there were people on one side of the debate like paul krugman, for example, hillary clinton was another who just, who just couldn't believe that obama was anything other than naive. the idea that you would sort of reach out to republicans and engage with them and they would come to see things your way was just preposterous.

and on the other side of the debate was the beginnings of a kind of counternarrative about obama's bipartisanship. and that, i think, was articulated first by a writer at the american prospect magazine named mark schmidt, and i'll just quote from the piece. it was a really terrific piece about where the debate over obama was going. um, and schmidt wrote perhaps we're being too literal in believing that hope and bipartisanship are things obama naively believes are present and possible when, in fact, they are a tactic. one way to deal with that bad faith opposition -- by which he meant conservative opposition -- is to draw the person in, treat them as if they were operating in good faith, and draw them into a conversation about how they would actually solve the problem. if they have nothing, it shows. schmidt was early to see that this may be more than just knew grieve, -- naive, it may be actually tactical and quite savvy. more recently, i mean, this

debate has gone on for the entire course of obama's presidency, but as we get toward re-election time, it's being litigated with special intensity, and i think the most recent, the most recent impetus for the debate, um, was andrew sullivan who's actually a former colleague of mine at the new republic. andrew wrote a cover story that got a lot of attention in "newsweek", and the premise was basically the premise of a piece schmidt wrote years ago which is obama at times looked like a complete disaster politically. but, in fact, even those moments when he looked like he was at his weakest, he was executing kind of a master plan, part of a long game as andrew referred to it. and be i'll just quote a bit from his piece. what liberals have never understood about obama is he practices a share-don't-tell long game form of domestic politics. what matters to him is what he can get done, not what he can immediately take credit for.

this kind of strategy takes time, and there are long stretches when obama seems incapable of defending himself. so, you know, this is an important question. you know, obama's running for re-election this fall, and if he happens to win re-election he will probably face the republican senate, and there are some huge issues that he's going to have to deal with almost immediately. the trillions of dollars in tax cuts that george bush first passed early in his term are going to expire on january 1 isst, so those are going of to have to be dealt with. there's $1.2 trillion in deficit cuts, spending cuts that are going to go into effect on january 1st if there's no deal to avert them. so there's a lot of stuff that the next president's going to have to deal with immediately, and if that president's barack obama, he's going to have to deal with it in the face of a fairly implacable republican opposition. so, you know, we need to know

was -- is obama actually a strategic genius, and was, um, were things sort of gamed out work questions are quiz sitly -- exquisitely, or did he luck into the success of the last six, eight monthsing? it's important -- months. it's important to know because something you do deliberately tends to be reproducible. if you just luck into it, chances are you're not going to be able to pull it off again. so that's the question i want to answer in this talk; was it luck, or was it part of the master plan? my own view and the view that i put forth in the book is not part of the master plan. the, it was fairly lucky in a lot of respects, and i think, um, could have ended disastrously if not for some lucky breaks. namely that obama has benefited from a pretty irrational and

self-sabotaging opposition. but you can't count on your opponents to always defeat themselves, so it's worth probably thinking through what you might have done differently had they been more rational. the biggest reason i think that, um, that this was not part of some strategic grand plan is that, um, this bipartisanship is who obama is. in the book all of the sort of main characters in the book i try to give you some biographical back story to sort of mind their, you know, their high school class mates and, you know, even their, earlier in their childhood to give you a sense of how they see the world and what shaped them. and with obama i think the key thing to understand about obama is this period in his life when he was the community organizer on the south side of chicago. and the thing that was most frustrating to him in those days

was this really pervasive tribalism, really pervasive partisanship. you're either on my team or the other guy's team. if you're on my team, you're a good guy, if you're on the other guy's team, you're a bad guy. this was the nature of politics in chicago, and at one point when he's an organizer, there was a kid in one of the neighborhoods he was working in who was shot by a stray bullet from a drug dealer, um, and obama felt like the police should do something about this, and they were very resistant to. so he called a meeting with a bunch of local pastors and wanted them to pressure, um, the police to really crack down on local drug violence. and one of the pastors, a guy named reverend smalls, african-american, told him, um, no, why would we want to do that? the mayor, hairls washington, is one -- harold washington, is one of ours, he's an african-american. the police commander in this area is one of ours, why do i want to go and cause problems for him?

and obama thought this was nuts, you know? that, basically, he was saying because these guys are on my team, they're part of my tribe, i'm not going to create problems for them. so he, it was this early formative experience where he just thought the only way you can ever do anything constructive is if you put these tribal loyalties to the side and really engage with people and take seriously problems that aren't just about score keeping for your team versus the other team. and this sticks with him all through his days in illinois, through the senate days -- through his u.s. senate days before he runs for president. he's constantly asking his aides, you know, why is this tribalism, this partisanship so pervasive? it's mystifying to him. so it's not surprising that he embraces bipartisanship as a cause. you know, it did serve his self-interests as well. among other things it allowed him to kind of level a critique of both hillary clinton and

george bush at the same time. both of them were, in their own ways, symbols of partisanship gone amok. hillary clinton in the '90s with all the wars that they had in the '90s with conservatives and with republicans and then george bush in the 2000s. but it wasn't really, it wasn't really that strategic. it wasn't that much of a reflection of his self-breast. he really -- self-interest. he really believed it. he really believed it. so you fast forward to the presidency, and you really start to see from day one all the way through the first term these examples of the white house deeply believe anything this bipartisan mission, you know, not just the conversation in the white house and between obama and his political advisers is not, um, how do we kind of draw these guys in so that it looks like we're trying to cooperate with them and then at the last minute we'll pull the result out

from under them. it's we want to cooperate with these guys because we feel that's how public policy should be made. and so from the very beginning from the stimulus which passes, you know, a few weeks after obama is elected, the order from the very top is reach out, do this in as bipartisan a way as you can, and it really is so pervasive that it actually sort of blinds them, i think, to sort of underlying political reality. the stimulus actually ends up, the deal that they do to pass the stimulus in the senate happens in, i think, february 8th or 9th of the 2009 which is like a thursday, maybe. that sunday they believed they were going to get 80 votes, up to 80 votes in the senate, 70, 80 votes in the senate which would have meant 20, 25 republicans potentially. they ended up getting two, i think. so there was an element of self-delusion almost from the very beginning about this. if you fast forward to that summer, the health care debate,

max baucus who is the chairman of the senate finance committee who's really the most important player on capitol hill when it comes to health care is engaged in this endless negotiation with his republican counterpart, chuck grassley. and it's going on for so long, and, um, the public opinion is really starting to turn against obama on health care. you guys probably remember this. that rahm emanuel, his chief of staff, starts getting very concerned. and in a meeting in the oval office he basically tells obama, you know, i'm really getting worried about this, i think we should just cut off this negotiation between baucus and grassley and just try to move a more partisan bill through the senate because this is really starting to kill us here. and obama says, no, i want to let this go on. i want to let the negotiation go on, i want to see if baucus can get a deal. and, you know, as people probably remember, it goes on through july, through august, into september before they finally pull the plug on it. and in those extra, you know, that extra month and a half, two

months they sustain enormous damage politically over the fact that this thing is dragging on. and then, you know, i think the real, the real window on to this story is 2011 after the midterms of 2010 they lose a bunch of seats, some 60 seats in the house, six or so seats in the senate. and by this point, you know, even if you were really earnestly committed to bipartisanship, you could be forgiven for thinking it was kind of a dead end. you know, the republicans would stiff you on the stimulus, they'd stiff you on health care, they'd oppose any additional efforts to get more stimulus. they did not appear to be a really willing partner in any kind of bipartisan effort. but it's not really the takeaway that, um, that obama and his political aides take from the midterms. what they take is that voters consider the deficit to be this

enormous problem and that voters want obama to work with republicans to solve it. and in the book i have colleagues of obama's top political advisers, bill daley who became the chief of staff and david plouffe who became his chief strategist, you know, these guys were, clearly, enormous proponents of that approach. you know, one of daley's colleagues told me that really the reason that daley took the job was that he felt this imperative to get the presidency back toward the middle. and, plus, as one of his colleagues told me specifically said and i'm quoting his colleague: we're going the need a period of ugliness, by which he meant with the left, so that people in the center understand that we're not wasting their tax dollars. so plouffe and daley both felt like two years into the obama presidency, um, obama had become

care keytured as a creature of the left, as a big, you know, wasteful, liberal spender and that the best way to, um, to get back on track was to kind of repudiate that caricature and engage with republicans on a deal to cut the deficit. um, so they kind of over a period of a couple weeks had these meetings on saturday. i don't know why saturday was the special day in the white house for plotting strategy, but they had these meetings on saturday, um, every week or so in december and january, and they come up with this plan. and the plan is, basically, to do a short-term deal on the deficit because the democrats hadn't passed a budget the previous fall, and it was lingering. so they would need to pass, reach a short-term deal with republicans for just the 2011 budget. and then after that they were hoping that that, you know, would create momentum for a much

bigger deal for cutting the deficit by trillions of dollars over ten years. and so they start to go down that path, and they do the, this deficit deal basically by just sort of accommodating republicans. republicans are demanding, basically, $100 billion in cuts from obama's proposal. it's a lot of money for a budget for a given year. and the obama folks, basically, give them, um, you know, three-quarters of that. ..

>> what is interesting here is what happens behind the scenes at this moment. and what is key is how they put this idea of bipartisanship, which engaging with the other side. they had to hammer home. they were absolutely not being cynical and trying to draw the republicans and ultimately get the political upper hand. to key data points that i write about in the book. the first is it is interesting how they can concocted this plan. their plan for turning medicare

into a voucher system. they thought the political people in the white house estimates of the republicans were vulnerable. they started to put together this plan to attack them. they have all sorts of different elements to the plan, but basically they are going to relentlessly hit them and give tax cuts to millionaires. one element of this plan, it involves austan goolsbee, he had been doing these whiteboards. there had been video presentations that got a lot of attention where he would use his whiteboard. it he would lay out the problem with the other side's views. he had this austan goolsbee whiteboards all queued up. what happens is after one or two

meetings, when obama since his negotiators to do this, the negotiators come back and they say, you know what, we are very encouraged by the progress that we're making with the skies. we think we can do a deal. and they plead that the political operatives, saying hold your power. if you go on the attack, you will torpedo. the guys in the room were actually decoding with the republican -- negotiating with the republicans. he said, you're right. we should not try to lacerate on the public. that is the first thing. the second thing that was really interesting is the view of the white house negotiators for the republicans. in public, i think the republican negotiators, eric

cantor and jon kyl, both of these guys, or soto reviled by democrats, and liberals in particular. they are seen as being neanderthal republicans who want to/government at every opportunity. what is interesting, is behind closed doors, the obama negotiators who were joe biden, tim geithner, the white house budget director, gene sperling, who was the top economic adviser, eric cantor was very reasonable, which sort of belies his reputation and his public image as a neanderthal. he is very pragmatic and well-informed. and just a guy that they feel like they can do business with. what is interesting here, if this is the moment where i think the experience a lot of these

guys, tim geithner, gene sperling, even joe biden, it is a little misleading here. what happened in the 1990s as a lot of these guys were in the room negotiating with republicans between 1995 and 1997 over a budget deal. very similar circumstances in a lot of ways superficially. and so they kind of sad that these guys may say a lot of crazy things in public, but once you get them in the room, you can do business. that is what happened in the mid- 1990s. they actually were exclusively comparing eric cantor to someone like john kasich. who back then was a republican senate of newt gingrich is. they compared him to john kasich. behind closed doors he would be reasonable. the problem was twofold.

the first was these guys may have been personally reasonable, but the republican pockets in the house of representatives were much more conservative than they were in the mid- 1990s. it was a completely different -- not completely, but a different ideological orientation. the analogy was incorrect, even though that was the analogy be approached in the negotiation. the second was, even in theory, you could spend two or three years negotiating and eventually striking a deal. we were very close to a second recession, the unemployment rate was above 9%. they could have benefited from additional support. there were a lot of good reasons to take a harder, a harder look what these guys, but obama's

negotiators came back with the evidence that they had from the first couple of meanings or the republicans, they really pleaded with the president to be given a chance to start the deal, and he consented. again, not that kind of -- not the kind of conversations you could imagine going on behind closed doors if this were all part of a master plan. what ends up happening, well, the republicans are just absolutely best they refused. obama's side is prepared to give a lot of concessions. hundreds of billions of cuts in medicare, social security programs, regarded as safe havens by democrats. but republicans assent of tax increases and the white house understand that understands that you can do a deal involving only cuts. finally, it is getting late in the negotiations. every opportunities that have

been given to the republicans, they say no, we're not going to raise taxes. jon kyl, the number two guy in the senate, turns to obama's negotiators and say, you need to tell me there are a bunch of cuts do you guys think are good policy, but you guys won't do it unless we raise taxes. gene sperling says that's exactly right. you cannot do it unless we meet you halfway. >> what goes on for the next month and a half, it is a series of efforts to reconstitute a deal, instead of this negotiation with obama's economic team and eric cantor and jon kyl. obama himself weighs in and negotiate to john boehner. it is obvious that republicans are just not going to do a deal. what is really interesting, though, i think, and this underscores two things in

relation to the point. they did not intend this as a way to make republicans look bad. they intended it as a way to get a deal done. there are a series of moments along the way -- for the republicans strongly intimated they cannot raise taxes and they will not go along with tax increases. every moment, either obama himself for were some of the top aides are always trying to rush out and put these negotiations back together. long after the point where they have established, they are reasonable people, negotiating in good faith and it is the republicans who absolutely refuse to go along. so that is one thing that is highly indicative of what is going on here. the second thing that is really interesting is when this finally collapses in late july of 2011, and it becomes obvious that they

are not going to get this big deficit grand bargain that they were hoping to get, the people inside the white house regarded themselves as having failed. they thought it was an absolute failure. even though, at this point, what is interesting is the public opinion, which is arctic coming their way. the public starts to blame republicans for being really stubborn and reckless. at the same time come you have this negotiation over the debt ceiling, which could have led to another financial crisis. public opinion is really moving their way, which, you know, had been drawn up as a master plan, it may not have given the exact result is wanted, but they wanted to deal and they tried repeatedly to get a deal. having not gotten it, they were really disappointed and disillusioned. what happens is really interesting. the lesson that obama takes away

from this is i have been a little naïve. the previous 2.5 years. when you see this, he suits in august 2011. within days of this negotiation breaking down, obama instructs his economic advisers to bring him a plan, basically another stimulus plan. a plan to stimulate job growth and stimulate the economy. but what he tells them when he asked them to his plan is do not bring me another prepackaged legislative compromise that is designed to win over republicans. we have been doing that for 2.5 years. they have not once taken us up on the offer. we are done with that. we're not doing it anymore. you see this tidbit, which runs through the present, where obama finally has had enough. he is finally given up on the idea that these guys are going to be good faith negotiating

partners. then he starts moving in this more partisan, more populous outspoken direction, and that come over the last six to eight months has really -- it is really, i think, what starts to kind of lose the numbers. public opinion has already come his way as a result of the republicans shooting themselves in the foot. you pick one particularly illuminating episode, i think, there was this negotiation to extend the payroll tax cut that was about to expire at the end of the year. the old obama would have, and in fact, dead, tried to go when behind closed doors with republicans and talk sense to them. this obama was on the back. he basically went on the country and accuse these guys are wanting to raise taxes on working people. that was actually quite

effective. the tax-cut extended for the first year, republicans hold it on everything. i think that you saw a real education happening culminating with this more partisan and more populous test of the presidency. it's a real question that i believe in and on, is this a case of obama having finally learned his lesson, the bipartisan engagement is a fools errand, and if you want to get something done, ultimately you have to take a case to the people and put pressure on your opponents from the outside, or is this a case of obama in the white house having been burned by that experience, realizing going into an election, we can't keep doing this. but, should we win reelection and we get into november and december, and facing those challenges that i have described at the beginning, will he

reversed the form and try to do this bipartisan behind-the-scenes good-faith engagement? >> that is another question. i have some thoughts about it. that is a question that i get voters to wrestle with. they will have to wrestle with this as they go to the polling booth. the bottom line to me is this was so sophisticated and plotting of the last three years, that it has set up this kind of crescendo in the last six months. it strikes me as an administration that was very earnestly committed to a way of doing business in washington. that way of doing business in effective and demoralizing, and then, learning the lessons of that, at least for the moment, and acting on it. that is the thought i will leave

you with. i'm happy to talk more about this and really any sort of economic or political economic decision or episode in the last four years. [applause] [applause] [applause] [applause] [applause] [applause] >> thank you very much for joining us here in ann arbor, michigan. one thought that i had in the course of your presentation, was i don't have any strong reasons to disagree with your assessment that this may have been the wrong strategy of bipartisanship, it may have been the wrong strategy in hindsight. but what i would like to press

you on is how much should be obama administration have known in advance that this would've been the wrong strategy? you know, i think one needs to make a distinction between strategies that are the optimal strategy looking forward, even if one may not best even if optimal strategies looking forward may turn out to have been the wrong strategy looking backwards in hindsight. for example, in general, one could always have unexpected events emerge that make the originally optimal strategy the wrong strategy. and of course from the most obvious is the emergence of the tea party movement and the dramatic changes in congress that happened with midterm elections. i'm wondering if you could speak about that. i think the critique seems more -- much stronger that you're making, if you can point to things that the obama

administration should've seen in advance that would've indicated this was the wrong strategy looking forward as opposed to saying in hindsight it was the wrong strategy. >> yeah, it's a good question. i actually don't begrudge obama in the white house. they're bipartisanship in the first year or two of the administration, obama has said, as i said, he was deeply committed to this personally. beyond that come he had campaigned on setting aside the partisan divisions of the past. i think he would have been foolish to not make a good faith effort to live up to that goal at the outset. while watching the stimulus debate unfold, even the health care debate unfold, it was often maddening, i think it was forgivable and maybe even necessary at the time.

my quibble is really with 2011. there are any number of data points that this strategy was unlikely to work. the least, obviously, it was unlikely to work because of the experience of the stimulus and health care. you know, their there are other pieces of legislation which i haven't touched on, one of which was doctoring. one of which was doctoring. health care is always a big topic because of the symbolic reason. even though the actual plan itself is, you know, something that the heritage foundation cooks up in the '90s. health care is this big -- the idea of government and health

care plan -- it is tapped into this thing of the conservatives. i can see that being very controversial on the face. but reforming wall street, it was an enormous bipartisan incentive. the tea party railed against the bailouts of the megabanks. every bit as intensely as the liberals did. there definitely was an opportunity for bipartisan cooperation. yes, and proved to be incredibly partisan vote. it went down to the wire. it required all sorts of arm-twisting. by. by the time you get to the fall 2010, it is hard to see how earnest engagement with these guys is going to produce agreement. you know, i think these forces are already brewing in 2009 and 2010. but the fact that 60 house

freshman oder congressional seats to the tea party, it suggests that it's only going to further in that direction. what is interesting is i read about this in the book, and i indicated in my quick summary of this, but if nothing else, what should have been the final tip off is the shorter, earlier negotiation in 2011 over the 2011 budget. because that's the moment where the obama folks were actually willing to do cuts. and significant cuts. each time they propose to something, and they thought that speaker boehner had agreed to it, he would go back to the tea partiers and they would say no, not good enough. and he would come back and they would demand even more cuts.

there were two or three or four iterations of this even before we got to the bigger negotiations. certainly come over the course of 2009 and 2010. but if nothing else, 2011, because it was a microcosm of the larger negotiation that was going to come. what is stunning is the white house had the exact opposite read on that negotiation plus they were saying things like oh, it's great, we did this here, we build trust between obama and dinner, we show that they could do business. meanwhile, the tea partiers, if you read what they were saying, were saying you know, this guy was a liberal president and we forced them to cut 70 or $80 billion from his budget. i really think you know, if you set aside all the data points, that was one that was loud and clear. in fact, it was the subject of a

lot of debate internally within the administration. there were people within the administration who are saying this is crazy. we should fight them now because this is only going to embolden them. it turned out to be right. >> thank you for coming. i have to disagree with you a little bit. i think a lot was suspicious around april may of 2009. by the time june and july came round of that year, i think it was pretty obvious that obama was going to be a weak president, with respect to congress. i am a fairly moderate to conservative democrat. why is it that ironically, people want to the left and the democratic party have had such a

hard time perceiving weakness, going into negotiations, compromise ahead of time, all that kind of stuff. as far as the public option. not fighting for, but simply making public statements as a form. >> the weakness was apparent from the very beginning. what is more of the democratic party seatback? >> my view of 2009 is it was maddening to watch, and you're right that the signs were there. it was forgivable. the campaign, he believed it. what is interesting, first of all, i think a lot of people on the left were pretty frustrated. you know, i think another may be

a little bit of this and people are sort of falling in line as mitt romney attacks obama and republicans attack them. but there was a lot of hammering on the left, particularly the public option. the thing about obama that drives a lot of the weakness beyond just the core belief in bipartisanship, it is obama himself, he has taught political advisors like david axelrod, a theory about politics and governing. the theory was, if you don't mix the two. there is a political season and you go out any major case and you are very forceful. and then there is a governing season. in the governing season, he set the games aside and you kind of do business in a very aboveboard way without going insane nasty stuff about your opponents behind their backs.

i think i was completely wrong, and i think the last 16 months has shown that could be wrong. where that comes from is interesting. it comes from the way they very self-consciously defined themselves in opposition to the clinton administration. bill clinton was the inventor of the permanent campaign. the campaign never ended. clinton was always out there campaigning, giving some speeches, always attacking republicans, and obama, above all, they wanted to be this anti-clinton. the problem with that is that it work. clinton obviously had his lapses and failings in dealing with congress, but ultimately, it showed that if you go out and see if you have it up a little bit, you can soften them up and you have more leverage and negotiations. i think that is where it came from. i agree with you. i think it was wrongheaded.

to me, the question is, are they finally over that hangup? i think the episode showed that if you do go to soften these guys up, you will get a lot more of what you want. but some of these hangups are so deeply seated and rooted me wonder if they won't just reversed the forum after the election. >> thank you. i'm curious to get your opinion on what where you think president obama rejected the simpson-bowles commission? for the recommendation, because that would seem to fit your narrative of him trying to achieve a grand bargain with bipartisan support, and it has kind of been speculated that when he would have embraced, you know, it would've killed any chance of republican support, order cuts to social security

and other entitlements would've would have been a no vote for many democrats. i'm serious to get your opinion on that. that is one decision he made in 2011, it seems to kind of not fall in line with the rest of your narrative. >> it is a great question. i agree that it is not the narrative. you are absolutely right you know, as i said. by late 2011, obama is saying don't give me a prepackaged legislative compromise. that is exactly what bowles-simpson was and was designed to be. i agree. it is a little bit out of character. that was basically a reflection of the fact that by 2011, they were feeling a lot of pressure on the left. they were beginning to be concerned about that pressure. the pressure dell particularly with medicare, social security, and their anxiety, which i think was the correct anxiety, was if

you embrace bowles-simpson, which is where you want to end up, it immediately becomes not where you will end up, but it comes your opening bid. you'll end up several feet to the right of that. paul ryan, who gave the republican opening bid, he was often talking about things of dollars of tax cuts and cutting discretionary spending down to post-world war ii levels. you have this guy, paul ryan, who is way under, and if we embrace full simpson, which is where we end up, we will end up somewhere in the middle. first, that will be a bad place because we don't feel like we should go anywhere further to the right for bowles-simpson, and second, we will get killed politically. i agree.

even so, that analysis, which i think was right, was a little out of character for them. one of the things that happened in 2010 and after the midterm elections is democrats and liberals are a rate -- they are irate over the bush tax cuts extended for another two years. they think that was a complete capitulation. democrats are already suspicious, and they are worried about them throwing the party out to the republicans. even though they decide to embark on this deficit reduction path, they are very conscious of their plane. the other thing that is interesting is when obama does make up the 4 trillion-dollar deficit reduction package over 12 years he gives a speech in george washington university in april. they are so worried about the reaction on the left, they really amp up the language of the speech. he comes out very critical of

paul ryan, and talks about how he has a dark vision for america all of that is because they were worried about the revolt on the left. they have this pr campaign that was designed to run with that. that was actually supposed to be the kickoff of this attack which, as we were saying, would've been helpful to give them leverage. in fact, the economic team said don't do it. we want to work with these guys. >> i grew up in michigan, i grew up in the midwest. i have lived here all my life. i think the midwest, i'm personally just tired of this left and right. i think people pay a lot of money to get something done in

washington. and i think the country wants to see that happen. i wanted to know, michigan has been hit very hard, but why did obama focus on health care instead of the economy as his first choice? >> it is a great question. this is a major theme of my book. >> my view of obama is that he has a bit of a [inaudible name] street. this is partly because of him defining himself in the terms of bill clinton, but he felt that someone like bill clinton played small ball in his presidency. he sacrificed the opportunity to fix generational problems, to really score a lot of small points against republicans.

he wanted to commit to doing the opposite. he gives this interview during the primaries in 2008 where he talks about how the last transformational president we have is ronald reagan. mr. clinton was completely irate about this. what he meant was, this guy thought they got some really wanted to change that should victory of the country, and obama himself, he saw himself in the same light. it was only worth punishing the two-year marathon of running for president if you are only going to do something that would make a mark on the country. the toppings on the list were health care and climate change. what happens in september 2000 and 8 is that we have this financial crisis that is like a meteor that hits the country in the middle of the campaign.

his political advisers are starting to become very worried. even before that, they felt like health care health care was a liability, politically, but certainly after this financial crisis, they are very worried. they come in and say, you know, we now have this new reality, what are we going to do about it. and he is absolutely unwilling to let go of health care. so he personally constructs his rationale for keeping going with that. which is well, we can't really solve the problems. we can't get the economy back on a solid foundation unless we deal with these longer-term problems like health care. on one level, it is sort of true. but on another, it is a bit of a twist. the visors are a little bit skeptical, but he is very adamant. they go with it. what happens during the transition, and this is really the preamble to the book.

obama is still so committed to the stuff that he decides what he's going to have to do is hire a bunch of people who are really good expert at dealing with the economy, particularly financial and economic crises, and delegate a lot of authority and responsibility to them. that way he will have the bandwidth to deal with these things like health care and cap-and-trade. that is how you end up with this team of clintonites. the clinton economic team, part two. it is precisely for that reason. it was a serious crisis, and there was this idea that you would need people you can trust to delegate seat to deal with these other things. that is where they come from. this debate over health care goes on up until september 2009, where people are still pleading with obama to let it go.

ron emanuel had this idea that pertain to health care, it you do health care by july, and then he turned back to the economy. and you start pitching workshop proposals. that obviously got completely cast aside because health care drag on for so long. in the book, tell a story about senator who comes to see obama in the oval office and is pleading with him. he said i know you ran on this health care, but you know, had i been elected at a time of unprecedented economic hardship, i would really want people to know that what i did with my first year was worried about jobs and obama said, you know, this is why i rant. this is what mattered to me. he believed in it deeply. on one level, i don't question him for believing in it deeply, but i do think it ended up being

an honest political liability. dream act okay. thank you. >> i have a more gentle political question, and that's about the polarization in our political climate. we see that surround us. i don't think it is unique to the situation in the united states. it is suddenly apparent in quite a few lesser european countries as well, whether that polarization somehow calls for different style of governance and a level of presidency that is more effectual than you described to obama behind closed doors, making deals, etc. i'm thinking of this in the context of people in italy and in england, and france.

they have all adopted sort of a different style of governance. and the feelings, if you will, the naivety you described. it ought to be understood in that kind of context. >> yeah, i certainly do think, we are in an era, you know, a more polarized era. i think that political science will tell you that we used to have ideological coalitions within political parties. but now, the parties have sorting themselves out along ideological lines. and that the coalitions have been moderating forces and we have gotten rid of those. i buy that. i think we are in a more polarized age. i certainly believe it has implications for the way a president governance. what is interesting, there was a

piece by a fellow, economics writer about whether presidential communication matters, whether it influences publications and congress, and the upshot was no, not really, in fact, it can even backfire because once a president embraces something, the other side is almost less likely to sport them before. but i actually think that the implications are a little bit more subtle. one of the things i think you find is in this age of polarization, the other side is always looking for opportunities to kind of recap the party in power. that is their first line of defense. what ends up happening, i think, the other side sees this as just

republicans, which they place a lot of bets, there may be things they support in principle, but as a practical matter, they will get no credit if it works, the ruling party will get credit, and they will share in the blame if it fails because the ruling party will support that, too, that dynamic actually makes communication more important. it becomes incumbent upon the ruling party to say these guys are up loving the things that may be helpful and popular. i will give you a very concrete example, which is, you know, obama passes this big stimulus in every 2009 and republicans are entirely unified against it. in the next two or three years from the white house is tearing their hair out to do understand how we can get more stimulus

because the economy is turning out to be weak. the problem they are, is if you don't go and call them out on this, you give them the best of both worlds, right? you let them stop it, and let them -- it appears as though they're not stopping it. that is the best outcome. they get to stop it, and they are not the bad guys. it becomes really important to actually use this to make them choose. they can either be the bad guys or they cannot be bad guys and not stop it but you can't let them have it both ways. that is sort of the reality of governing in this really polarized age. you can't give the other guy a free lunch. i think obama, for a good 2.5

years, he was doing that. the republicans were able to stop it, leaving the economy incredibly weak, except they weren't paying the price. nobody knew -- they were just that the public was blaming the white house. i think that is one of the most obvious implications of the highly polarized age. >> thank you for your work. while i commend you for your emphasis on bipartisanship and how well entrenched it was, i think it was too long, and i don't have a well formulated question, but i do have a comment. there are other significant variables as well playing into obama's naïveté. one is as superman, of course, another one is his lack of experience. i also think he started running

for president the second year that he was a senator. he did not learn adequately, in my point of view, the methodology of being a senator for six years. he didn't have a network of people he could trust. when he got into the white house, he did not develop a network of people. instead, despite his we are not clinton idea, he inherits the clinton team. he doesn't have a network of democrats who he believes in. he knows well. he has worked with, and he has developed some trust. not only does he not have a network entering, but he doesn't develop that network as well. and i think the team of clinton people that he inherits a kind of a throwback to that clinton era in the 1990s. and that is what obama gets on a daily basis. and i think that is also what

daily and some of the other comments concluded. and i don't think valerie jarrett, necessarily being the personal right-hand adviser to both michelle and barack is necessarily a good thing, i would like your comments. >> yeah, i think obama is a bit of a learner, not the kind of guy that just derives satisfaction from getting on the phone and calling 20 people in an afternoon just to take the temperature. as president clinton famously did. obama was going to be naturally isolated anyway and not having that network, it just affirms and reinforces that isolation. i do think that was a problem. the other thing i think, your

point about inexperience, i think, is helpful. one of the problems that i think you find it with president obama, often you get presented the memos or pieces of advice i can work their way up through the white house apparatus -- the government apparatus. and there is choice abc. obviously, there are a million things left out, right? there are a million choices you could choose besides abc. if you are new to the whole exercise, you are not used to prodding and demanding more than twice a bnc. i think obama had a very impressive analytical mind, you know, he's very good at being where logical premises fell

apart. but i think he was less good at understanding the flow of information, what was getting to him and what wasn't getting to him some of the ways in which, you know, information could be lost before he ever saw it. the ways in which white house aides could be blinded by their own previous experience and vices. it took him a while to get beyond that. i think you are right. that is the kind of thing that you hope the president isn't learning on the job in his first year or two of the presidency. i am not sure whether it is better if you serve as a governor in this executive role or this corporate executive role, but i think you're right. part of the problem is not managing an enormous organization. before this, it was just information flow. and i think if you don't have

that experience and information that you need to get the right information and you are already a bit of a learner by disposition and you don't have a network of individuals that you trust who have some experience, and i think you can be informed a really rough ride. i think that is definitely part of it, yeah. >> thank you. your subtitle indicates that the obama administration fumbled the recovery and you have argued that that in large part it's because the administration had misplaced faith in bipartisanship, especially prior to the midterm elections. my question is if you could explain to us a few of the policies that ought to have been adopted, especially in 2011, that would've been possible had he taken this more assertive approach that you now indicate that he is following, but that was not surprised at this bipartisanship. that is a great question.

>> there are two parts. the first is the original stimulus. again, i don't begrudge him for being bipartisan, but i think they could've played it better. had they proposed something much larger, 1.2 trillion, rather than starting at 775 billion, like they did, but basically -- they were always is going to cut off of this. you might as well bargain down rather than starting at 775 billion and ending up their branding of lower due to technical reasons. some of that is kind of the doubt. i think the original stimulus was one price with a less money on the table. the other place, i think,, and i

think they had a shot at another bid of four or $500 billion. basically, the package that obama proposes in september september 2011. >> had he proposed something like that in the spring of 2010, he had a really good shot at passing that. in 2010, democrats still had 59 votes in the senate. the senate map is a lot better. they controlled the house, which means it would have passed the house. it was this moment where throughout the second half of 2009 committee economies is starting to improve. there is optimism that the recovery is going to be quick.

then we did in 2010, the spring of 2010, and we start your breast and there's a lot of anxiety. suddenly, we are not. between public opinion starting to turn back towards anxiety and on capitol hill, and the fact that we saw in recent months, something like ap will tax cut, which republicans had historically supported come i think i was a moment where they had a real shot at something big that would reinforce the recovery. for a variety of reasons, there was this internal dysfunction that i described in the book. they just never even gave themselves a chance to do it. i think that was a real missed opportunity. >> my question is a follow-up to

john's. it seems to me you are arguing that clinton's way of doing things might've been more appropriate than obama's more cooperative way of doing things. i look at the historical record suggests that both of them come at the end of the day, wound up adopting centris policies. your entire way of thinking about this seems to be that in a counterfactual world, the democrats would really like to implement the policy that is substantially more expansionary. and i don't see any evidence in postwar economic history that suggests that is true. >> that it is true that democrats would like to do that? >> only god knows their hearts, but there is no evidence that they actually behave differently than republicans. >> well, i guess i would separate the normal turning of the business cycle, which, you know, i think it was in the

moment where there is an enormous output gap and you could spend $2 trillion and still, you know, -- i think that may be true, but i think that this was a moment where the case for the stimulus was less ideological than was entirely pragmatic. that we have this huge hole in the economy. if you remember in december 2008, a lot of republican economists were calling for an anonymous dinner. one of them called for 600 billion in one year. which, you know, obama was

operating on a two-year timetable. there was his understanding that we were in a unique moment, and people thought less -- they felt this was an opportunity to speak ideological ground than just doing what was necessary to plug the enormous hole. >> the last speaker mentioned something about centrist policies. i'd like to question that. whether the policies of the current administration, if they actually succeeded in getting through congress, whether they really were centris or to the right and center. i think that is a revision consistent, actually,. >> i agree. that is what you would expect because that's what the democrats have been doing despite some of the rhetoric.

i think if you go initiative by initiative, health care was, you know, this was the alternative republicans and republican think tanks put out in the early '90s when clinton came out with his individual mandate you know, subsidies for people to buy health insurance in the private market. clearly, a right and center policy up until about three years ago. dodd-frank, i mean, the financial reform, i spent a lot of time criticizing it in the book. this is a pretty modest regulatory reform effort. very little that the good wall street's -- the wall street institutions thought that made it into the bill.

clearly, by any kind of objective, clearly, i think that a center-right piece of legislation as well, and even the stimulus. you will remember that obama came into the stimulus negotiation having hardy conceded that 40% of the stimulus should be tax cuts, which a lot of keynesian economists believe is pretty ineffective. absolutely. one of the things in my book is that obama is a moderate guy. i talk about a meeting -- i have the description of a meeting in

2009 were peter or his eye, who was the voice for the budget and deficit, he is in love with a plan for not extending -- obama had always said he would extend the middle class tax cuts, but allowed the upper class tax cuts to expire, unless he like this plan when he has them all expire, because there is no other way to balance the budget over 10 years if you're not going to do that. and obama, this would be a huge political risk. it is a risky thing to reverse yourself on. i'm not sure what it is. he was really intrigued by this idea. it was hard to see how we were going to balance the budget without doing this. he was a deficit hawk, he was exposed to ideas that would

expose them to enormous political risk. yet, i think he is a pretty centrist guy. >> i think we have time for one further question if anybody would like to come forward. otherwise, i think what we will do is think noam very much for enlightening us. [applause] [applause] [applause] [applause] >> every weekend, book tv offers 48 hours of programming focused on nonfiction authors and books. watch it here on c-span 2. >> to get right into it, i want to set the stage about the 1930s. to explain that part of what led to world war ii being such an upheaval for the united states, where the policies of franklin roosevelt during the 1930s.

to give you some statistics i will be brief on those, for instance, factory output -- the output of american industry increased every decade beginning in 1899 for the following 10 years factory output was up 4.7%. from 1909 to 1990, it was up 4.3%. 1919 to 1929, the roaring 20s, factory production was up 5.1%. each year. by 1929 to 1939, it decreased slightly by each year during the 1930s. so our industrial complex by the 1930s, in 1939, has aged. it is out of touch with cutting edge innovations that are going on in europe and elsewhere, and suddenly we are faced with this problem of a military complex in

europe, and we don't have anything to compete with them. in the book, i mention that the army chief of staff, douglas macarthur, testified before congress in 1935, pleading for enough money so that his army would have enough boys per 100,000 soldiers. we are not talking about stealth bombers or complex weapons here. we are talking literally about just even enough bullets to me in 100,000 armies. i can certainly understand if you're not for a strong military, the american presence over seas, which we don't always need, but i do think that a strong defense of america wards off problems. in the 1930s, we certainly didn't have that, and germany was aware but that this was japan. that leads to a lot of problems.

the war comes along to the united states in late 1941, suddenly factors have to be converted. what are you going to do? well, overnight, for one thing, they restricted products to consumers. overnight, in january 1942, you could not buy tires for your car. if your tires have been getting a little aged and you thought well, next week i will run down to sears roebuck and get a new set of tires, you are out of luck. the only way to get another set of tires was to go before the governments tighter board and crew that you had an essential reason for getting a new set of tires. likewise, radios, bicycles, clocks, it even the common american could no longer purchase those items after the spring of 1942. all of those mechanisms were used in the war effort. >> you can watch this and other programs online at booktv.org. up next