Blog on the Run: Reloaded

Friday, November 19, 2010 8:46 pm

Yo, David Gergen:

David Gergen used to be a respected, moderate Republican eminence. Then he went to work for Clinton. Now, he dispenses incredibly tired, out of touch conventional wisdom and is so out of touch that he doesn’t even realize that those things dangling from the tip of Matt Taibbi’s K-bar? Are his testicles:

Gergen: If Obama is going to govern as well as prosper politically, he has to pivot back toward the center. He must embrace some sort of Social Security reform, just as Clinton did with NAFTA, even though his base will scream about it. He must also enlarge his inner circle by bringing in people who have the trust of the business community. One of the surprises for me has been that even though Obama rescued the banks, the alienation of the business community has reached a point that is threatening the recovery. Business people are sitting on a lot of money and not investing it because there is so much uncertainty about taxes, health care, financial regulations and energy. Obama’s got to be more of a partner with the business community.

Taibbi: I have to disagree. The notion that the business community is disappointed with Obama because of what he’s done in the past two years, I just don’t see that. They’re sitting on a lot of money, but they’re sitting on it because he gave it to them. [And because those consumers who can spend are so terrified that soon they won’t be able to that they won’t spend. — Lex]

Gergen: You don’t think they’re disappointed?

Taibbi: I’m sure they would have preferred the Republican agenda, where they would get 100 percent of what they want. Under Obama, they only got 90 percent. He bailed out the banks and didn’t put anybody in jail. He gave $13 billion to Goldman Sachs under the AIG bailout alone and then did nothing when Goldman turned around and gave themselves $16 billion in bonuses. He passed a financial-reform bill that contains no significant reforms and doesn’t really address the issue of “too big to fail.” FDR, in the same position, passed radical reforms that really put Wall Street and the business community under his heel.

Gergen: If you talk to many CEOs, you’ll find that they’re very hostile toward Obama.

Taibbi: Who cares what these CEOs think? I don’t care — they’re 1/1,000th of a percent of the electorate. They’re the problem. Obama needs to get other people’s votes, not their votes.

Gergen: It’s not their votes he needs to get — it’s their investments and jobs.

Q: In 2008, Obama managed to win over both the financial sector and the progressive wing of the Democratic Party. Now he seems to have pissed off both ends of that coalition.

(Pollster Peter) Hart: There’s a fascinating point from the exit polls that supports part of what Matt is saying. When you ask voters who is most to blame for the current economic crisis, 35 percent say it’s Wall Street bankers, 29 percent say it’s George W. Bush and 23 percent say it’s Barack Obama. However, among those who say it’s Wall Street bankers, 56 percent voted for the Republicans in this election. So go figure.

That said, I worry that if the president and the Democrats were to follow Matt’s advice, they would be appealing to the smallest segment of the electorate. Right now Obama has the support of 85 percent of Democrats. If you want to get America back to work, you don’t want to put the people who have the ability to invest on the other side of their fence.

Taibbi: So if we put people in jail for committing fraud during the mortgage bubble, we’re endangering our ability to win over the CEOs? Obama should have made sure that there are consequences for people who committed crimes. Instead, he pursued a policy of nonaction, and that left him vulnerable with ordinary people who wanted an explanation for why the economy went off the cliff.

Gergen: I don’t think his problem is he hasn’t put enough people in jail. I agree that when people commit fraud, they ought to spend some time in the slammer. But there’s a tendency in today’s Democratic Party to turn away from someone like Bob Rubin because of his time at Citigroup. I served with him during the Clinton administration, when the country added 22 million new jobs, and Bob Rubin was right at the center of that. He was an invaluable adviser to the president, and he is now arguing that one of the reasons this economy is not coming back is that the business community is sitting on money because of the hostility they feel coming from Washington.

Taibbi: I’m sorry, but Bob Rubin is exactly what I’m talking about. Under Clinton, he pushed this enormous remaking of the rules for Wall Street specifically so the Citigroup merger could go through, then he went to work for Citigroup and made $120 million over the next 10 years. He helped push through the Commodity Futures Modernization Act of 2000, which deregulated the derivatives market and created the mortgage bubble. Then Obama brings him back into the government during the transition and surrounds himself with people who are close to Bob Rubin. That’s exactly the wrong message to be sending to ordinary voters: that we’re bringing back this same crew of Wall Street-friendly guys who screwed up and got us in this mess in the first place.

Gergen: That sentiment is exactly what the business community objects to.

Taibbi: [Expletive] the business community!

Gergen: [Expletive] the business community? That’s what you said? That’s the very attitude the business community feels is coming from many Democrats in Washington, including some in the White House. There’s a good reason why they feel many Democrats are hostile — because they are.

Taibbi: It’s hard to see how this administration is hostile to business when the guy it turns to for economic advice is the same guy who pushed through a merger and then went right off and made $120 million from a decision that helped wreck the entire economy.

The number and importance of the key facts and concepts that Gergen demonstrates he either doesn’t know about or doesn’t care about here is mind-boggling. Add to that the fact that he automatically presumes that if the CEOs in his circle differ with the president, why, they must be right and the president must be wrong, and you’ve got a guy who clearly will never be mistaken for a card-carrying member of the Reality-Based Community. He will, however, continue to be mistaken, over and over, by our lousy excuse of a media for someone who actually knows what he’s talking about.

UPDATE: John Cole adds:

David Gergen makes up his own reality and responds to feelings and trite beltway babble. Matt Taibbi looks around him and reacts to evidence and data. David Gergen is considered a very serious person and advises Presidents. Matt Taibbi is not considered serious because he says [expletive].

We’re so screwed as a nation.



  1. Good stuff. Thanks.

    Comment by Fec — Friday, November 19, 2010 9:58 pm @ 9:58 pm

  2. Obama: “I don’t understand.”

    Comment by Fred Gregory — Tuesday, November 30, 2010 2:07 am @ 2:07 am

  3. Keynesian econ is wrong

    Comment by Fred Gregory — Wednesday, December 1, 2010 12:01 am @ 12:01 am

  4. It’s a little more complicated than that.

    When about 70% of GDP is consumer spending, as is the case in the U.S., you can’t simply state that GDP and GDI are two separate things. That money we spend on consumer stuff is income for the people who make the stuff, package the stuff, market the stuff, distribute the stuff and sell the stuff.

    Moreover, the goal IS to grow the pie, indeed, but that subject is not separate and apart from the subject of how national income is spent. For example, we know that everything else being equal, a dollar spent on defense creates fewer than half as many jobs as a dollar spent on non-defense (broadly defined; obviously some expenses create more jobs than others). Dollars spent creating physical and intellectual infrastructure are the most productive of all: They put people to work in the present (thus both reducing government expense on unemployment benefits and increasing government revenue through income tax and sales tax on the resulting consumer spending) while creating the means for additional creation of wealth in the future.

    Comment by Lex — Thursday, December 2, 2010 12:17 pm @ 12:17 pm

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