David Leonhardt’s Obama Interview
I don’t think there’s anything earth-shattering in this interview, but it is worth reading if only to take a moment to savor the fact that we have a president who can speak intelligently about a range of policy issues. I also think it’s near that David Leonhardt and the NYT have inserted some HTML “footnotes” into the interview to give some of the facts and specific context that tend to slip out of view when people are talking.
The one thing I would really take issue with here is that I think Obama is unduly optimistic about the idea that we can keep the financial industry basically as is, but regulate it “better.” The pre-crash state of regulation had a lot to do with the political clout and prestige of the institutions in question. If you keep the same institutions in place, I worry that they’ll swiftly recapture the regulators.
32 Responses to “David Leonhardt’s Obama Interview”
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April 29th, 2009 at 6:30 pm
I have a proposal for spelling reform!
From now on, let’s spell “clear” as “near.” It’ll be much nearer!
April 29th, 2009 at 6:30 pm
And let’s also spell “nice” as “near.” That will help narify matters.
April 29th, 2009 at 6:38 pm
I am terribly sorry, Herr Ted, but I must revoke your Spelling Nazi membership card. The club requires its members to possess a vocabulary at least comparable to that of the average six-year-old. It was NEAT to have you among us while it lasted.
Sincerely,
Hermann von Thesaurus
April 29th, 2009 at 6:50 pm
curses foiled again
April 29th, 2009 at 7:23 pm
I thought his comments on end of life care were very interesting too.
April 29th, 2009 at 7:32 pm
I think it was capturing/corrupting/improperly incentivizing the ratings agencies that did more damage. It’s amazing how much mileage you can get out of a sloppy AAA rating or two.
Reading the interview, and scrolling through all the little photo montages of these past weeks, just confirms for me that I’m so happy that Barack Obama is President.
April 29th, 2009 at 7:41 pm
I can’t believe the President was throwing around the “C” word, Canada, while discussing banking. Doesn’t Canada essentially have 7 Nationalized banks?
And aren’t we fighting a “War on Terror” with those people? Or is that somebody else. I watch FOX a lot so I’m not sure.
April 29th, 2009 at 8:15 pm
Doesn’t Canada essentially have 7 Nationalized banks?
No. It does have five big, old, fairly conservative and highly-regulated banks.
April 29th, 2009 at 8:15 pm
Not that it would have helped here, so a radio or tv interviewer will need to steer the conversation towards the word “nuclear”. For some reason, I can’t recall hearing audio of BHO saying it. I guess I’ll have to wait for The Daily Show to pull together a rigorous Bush/Obama enunciation comparison.
April 29th, 2009 at 8:25 pm
For some reason, I can’t recall hearing audio of BHO saying it. I guess I’ll have to wait for The Daily Show to pull together a rigorous Bush/Obama enunciation comparison.
He just said it a few times thanks to upChuck Todd.
April 29th, 2009 at 8:26 pm
While reading Obama’s optimism regarding the future structure of the financial system, I get the impression that he’s still husbanding his political favors and resources for something else, probably the national health insurance and carbon cap battles.
But, I’ve watched the Administration avoid confrontation regarding systematic malfeasance and previous unconstitutional acts of government. I’m left to wonder when we’ll finally see… well, not The Rock Obama, but at least the inner LBJ seriously engage some of these issues for a win, rather than what he thinks a few members of the GOP might get on board with.
April 29th, 2009 at 8:35 pm
This is pure Summers/Geithner bullshit and is not good news.
April 29th, 2009 at 8:39 pm
Ah, but then I read about the arm twisting re: GM/Chrysler. Damn shoot from the hip opinions.
April 29th, 2009 at 9:09 pm
Matt you’re starting to sound like a left wing version of the Nazis talking about the Jews and their “money power”. Just saying…
April 29th, 2009 at 10:46 pm
1) I think Obama is about to step deep into shit and unfortunately doesn’t realize it.
2) If this swine flu pandemic is not contained, it will blow the economic recovery to pieces — and then all that huge debt overhanging us will come crashing down.
3) The ONLY way to contain the flu is via quarantine measures and protective face masks. But if you go out and try to determine what masks to buy, you will find a barrage of inconsistent bullshit and contradictory information from CDC, HHS, and FDA.
4) Plus if you go out and try to buy what are allegedly the best masks — the N95 respirators certified by the FDA — you will find they are not available. 3M will no longer sell them over the net — they say demand is too great. I went to six major drug stores in the last two evening and found they were all sold out.
5) You might –for the moment –be able to find N95 respirators at Home Depot — where they are used in construction for protection from dust, etc.
Except that –in an instance of infuriating bureaucratic ass-covering, FDA is refusing to certify those construction models, even though they have much of the functionality of the FDA healthcare models.
6) Plus 3M is reaming consumers on the FDA N95 healthcare models –advertised cost is now roughly $4 for just a SINGLE mask.
Whereas the home construction N95 masks were only around $1.50 –at least a few months ago. This is a big deal because if you are caring for a sick relative , you will probably use around 20 of these disposable masks in the week during which a flu victim is ill.
7) So we have a massive trainwreck heading down on us: 300 Million americans needs roughly 50 masks EACH and they need them NOW, the FDA-3M logrolling would mean a cost to each American of $200 per person, and there are nowhere near enough masks to go around even if everyone could come up with the money. Because of the huge, unnecessary cost, most people will put off buying the masks until it is too late.
Without the protective masks, the flu will kill many of our countrymen.
9) UNDERSTAND THIS: Even if you grab a supply of the masks, you are still badly fucked if most of the people in your city are not able to get a supply. That includes the homeless and the poor. Because if you are surrounded by thousands of flu victims, you are seriously at risk if you are not in a BioHazard Level 4 suit.
We are all in this together — if you disagree, read Bocaccio’s description in the “Decameron” of what happened to Florence in 1392? when the plague hit.
10) Part of the reason we are fucked is that no one has been running HHS — Sebelius was only approved yesterday. In part because Republicans wanted to argue over her support for Abortion.
11) Of course, if the pandemic gets out of hand and kills off a large part of the population then its possible that a father who has lost his family will take a ball peen hammer and beat Senator Mitch McConnell’s fucking brains out. In those circumstances, I would have trouble convicting that father if I was on the jury.
April 29th, 2009 at 11:02 pm
Here’s the 3M site giving us the bad news:
http://www.shop3m.com/70071486099.html
(The 8612F and 8670F are the N95 respirators approved by the FDA for use by the public.)
April 29th, 2009 at 11:06 pm
Thank you Don Williams, that was certainly brief and to the point.
I like the fact that your #8 got converted into a guy with shades.
April 29th, 2009 at 11:20 pm
[...] commentators, including Tyler Cowen and Matthew Yglesias, are encourage by this recent interview with Barack Obama. It is indeed pleasing. Cowen says he [...]
April 29th, 2009 at 11:28 pm
Um, Don, the plague was a lot worse than the flu. Just saying.
April 29th, 2009 at 11:39 pm
Uh Don, I think you’ll enjoy this game.
April 29th, 2009 at 11:59 pm
If you check Walgreen’s pharmacy online, you see “Out of Stock” status not only for the 3M 8612F respirator but also for Walgreen’s other surgical mask products:
http://www.walgreens.com/store/productlist.jsp?CATID=100954&navAction=pop&navCount=1
April 30th, 2009 at 1:48 am
“swiftly *re*capture the regulators”?!?!?!
You mean you honestly think Summers, Bernanke, and Geithner are not already captives of Wall Street?
They will never lay a hand against the interests of Mother Goldman Sachs because they know a nice cushy $15 million a year job awaits them there when they leave, just like all good Wall Street quislings.
April 30th, 2009 at 5:07 am
(Background: work on Wall Street in mortgage derivatives; Libertarian Obama voter)
I agree that the one big “uh-oh, President Obama really doesn’t get it” moment when reading the interview is when he talked about “restoring” the shadow banking system/securitization market (2nd/3rd paragraphs of his first answer).
It’s clear to banking professionals that the only way that system was able to get so big in 2005/06/07 was through the misunderstanding of risk. Risk buyers were okay accepting tiny coupons for “AAA” securities because they truly thought we couldn’t see a massive wave of subprime borrowers default on their mortgages. Whoops.
The market cannot/will not “unlearn” the lessons of 1. not trusting rating agencies, 2. looking “through” the securities to see the true quality of the underlying loans, and 3. you know what, housing prices can go down. Without those faulty assumptions, there will not be the profitable “arbitrage” in the securitization business to draw enough participants to return it to volumes anywhere near 2006.
Thus, unless we believe that it is a fundamental role of the Federal Govt to insure securitized products, or that the Fed will have a permanent role in consumer finance lending, Pres. Obama’s team needs to start envisioning how 2, 5, 7 years out the US financial system operates *without* the shadow banking system.
Since the loss of securitzation is a net negative to my own career and bank account, I’m sort of arguing against my own book here; but I’m honest enough to admit the truth.
April 30th, 2009 at 5:35 am
Definitely not a defense of GWB, but I can remember several press conferences that I thought were damn near unintelligible when I saw them, but which appeared to be at least slightly substantive when reading the transcript afterwards (the first debate with Kerry was probably the example I found the most striking when reading the transcript the next day — there were times when I wasn’t convinced that what he was saying was anything more than gibberish, but which made much more sense on paper). And I don’t think this was _all_ due to the White House salvaging his words on the transcript, there were at least a couple of examples when I compared the transcript and the interview and found them quite fair. I think in part some of this effect was because I simply didn’t believe anything that I heard him say, and reading the words on paper afterwards at least gave me some distance from associating his thoughts with his expressing them.
All this is to say that MY’s statement that we should “savor the fact that we have a president who can speak intelligently about a range of policy issues” should always rest on listening to the interview itself, rather than simply reading the transcript.
April 30th, 2009 at 6:57 am
“If you keep the same institutions in place, I worry that they’ll swiftly recapture the regulators”
Re-regulation will only survive until the next charismatic, Republican yahoo comes along, perhaps in a generation.
April 30th, 2009 at 7:02 am
The pre-crash state of regulation had a lot to do with the political clout and prestige of the institutions in question.
Not really. Rather, it had a lot to do with the Reagan/GWB ideological stance on regulation in general.
Indeed, not to sound like a broken record, but it constantly amuses me that Matt seems entirely unaware of how deregulation led to a bunch of small banks blowing up in the Savings and Loan Crisis. Since these weren’t big firms with a lot of clout and prestige on an individual basis, I think the S&L Crisis demonstrates that Matt is simply wrong about the nature of the institutions making much of a difference in this area.
April 30th, 2009 at 7:08 am
bob h,
The good news is that as a result of the Great Depression, we had pretty effective financial firm regulation in place for about 50 years (until Reagan). Of course we didn’t have a “charismatic, Republican yahoo” President in that time (Ike wasn’t a yahoo, and Nixon wasn’t charismatic), so that doesn’t necessarily disprove your thesis. But it is possible that the memory of what the Reagan/GWB regulatory approach caused will linger for quite a while, and maybe that will actually help keep another such person out of office for quite a while.
April 30th, 2009 at 8:13 am
If you keep the same institutions in place, I worry that they’ll swiftly recapture the regulators.
Doesn’t appear to me that they’ve escaped yet. Not with Geithner and Summers running the show.
April 30th, 2009 at 8:52 am
Citing Canada is a very good sign- it’s one of the world’s best role models for effective bank regulation. But how to square that kind of talk with the actual personnel he hired for his Administration, I just don’t know.
April 30th, 2009 at 10:06 am
Yes, financial institutions will evade “discipline” as long as they are able to pay off lawmakers with campaign contributions. If my kids gave me $2400 every time I was about to curb privileges, well, I might look the other way as well.
April 30th, 2009 at 3:10 pm
[...] is unduly optimistic about the idea that we can keep the financial industry basically as is, but regulate it ‘better.’” “The pre-crash state of regulation had a lot to do with the political clout and [...]
May 4th, 2009 at 1:41 am
[...] David Leonhardt has a big interview with Barack Obama in this morning’s magazine that, as Matt Yglesias and Tyler Cowen note, is worth reading largely because it shows the president’s grasp of [...]