by Obama Barack
It was crucial, then, to get these early appointments right—starting with the person who could serve as my chief of staff. Unfortunately the initial response from my number one recruit for the job was less than enthusiastic.
“No fucking way.”
That was Rahm Emanuel, the former fundraiser for Richard M. Daley and enfant terrible in the Clinton administration, now a congressman from Chicago’s North Side and the mastermind of the 2006 Democratic wave that had taken back the House of Representatives. Short, trim, darkly handsome, hugely ambitious, and manically driven, Rahm was smarter than most of his colleagues in Congress and not known for hiding it. He was also funny, sensitive, anxious, loyal, and famously profane: At a charity roast in his honor a few years earlier, I’d explained how the loss of Rahm’s middle finger to a meat slicer when he was a teenager had rendered him practically mute.
“Look, I’m honored you’re asking,” Rahm told me when I reached out a month before the election. “I’ll do anything you need to help. But I’m happy where I am. My wife and kids are happy. And I know too much to believe that shit about a family-friendly White House. Anyway, I’m sure you can find better candidates than me.”
I couldn’t argue with Rahm about the hardships involved in accepting my offer. In the modern White House, the chief of staff was the day-to-day quarterback, the end of the funnel through which every issue facing the president had to first pass. Few in government (including the president) worked longer hours or under more unrelenting pressure.
But Rahm was wrong about me having a better choice. After two punishing years on the campaign, Plouffe had already told me that he wouldn’t initially be joining the administration, in part because his wife, Olivia, had delivered a new baby just three days after the election. Both my Senate chief of staff, Pete Rouse, and former Clinton chief of staff John Podesta, who had agreed to help manage our transition team, had taken themselves out of the running. Although Axe, Gibbs, and Valerie would all accept senior positions in the White House, none had the mix of skills and experience I’d need for the chief of staff job.
Rahm, on the other hand, knew policy, knew politics, knew Congress, knew the White House, and knew financial markets from a stint working on Wall Street. His brashness and impatience rubbed some people the wrong way; as I would learn, his eagerness to “put points on the board” sometimes led him to care less about the substance of a deal than getting a deal done. But with an economic crisis to tackle and what I suspected might be a limited window to get my agenda through a Democratically controlled Congress, I was convinced that his pile-driver style was exactly what I needed.
In the final days before the election, I had worn Rahm down, appealing to his ego but also to the decency and genuine patriotism hidden beneath his wiseass persona. (“The biggest crisis facing the country in our lifetime,” I yelled at him, “and you’re going to sit on the goddamn sidelines?”) Axe and Plouffe, both of whom knew Rahm well and had seen him in action, were thrilled when he accepted the job. But not all of my supporters were as enthusiastic. Hadn’t Rahm supported Hillary? a few groused. Didn’t he represent the same old triangulating, Davos-attending, Wall Street–coddling, Washington-focused, obsessively centrist version of the Democratic Party we had been running against? How can you trust him?
These were all variations on a question that would recur in the coming months: What kind of president did I intend to be? I had pulled off a neat trick during the campaign, attracting support from independents and even some moderate Republicans by promising bipartisanship and an end to slash-and-burn politics while maintaining the enthusiasm of those on the left. I had done so not by telling different people what they wanted to hear but by stating what I felt to be the truth: that in order to advance progressive policies like universal healthcare or immigration reform, it was not only possible but necessary to avoid doctrinaire thinking; to place a premium on what worked and listen respectfully to what the other side had to say.
Voters had embraced my message—because it sounded different and they were hungry for different; because our campaign hadn’t depended on endorsements from the usual assortment of interest groups and power brokers that might have otherwise forced me into a strict party orthodoxy; because I was new and unexpected, a blank canvas upon which supporters across the ideological spectrum could project their own vision of change.
Once I started making appointments, though, the differing expectations within my coalition began to show. After all, each person I selected for a job in the administration came with his or her own history, paper trail, and set of supporters and detractors. For insiders, at least—the politicians and operatives and reporters whose job it was to read the tea leaves—each appointment signified my true political intentions, evidence of my tilt to the right or to the left, my willingness to break from the past or peddle more of the same. Choices in people reflected choices in policy, and with each choice, the chances of disillusionment grew.
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WHEN IT CAME to assembling my economic team, I decided to favor experience over fresh talent. The circumstances, I felt, demanded it. The October jobs report, released three days after the election, was dismal: 240,000 jobs lost (revisions would later reveal that the true number was 481,000). Despite the passage of TARP and continuing emergency measures by Treasury and the Fed, the financial markets remained paralyzed, banks were still on the verge of collapse, and foreclosures showed no signs of slowing down. I loved the various up-and-comers who’d advised me throughout the campaign and felt a kinship with left-leaning economists and activists who saw the current crisis as the result of a bloated and out-of-control financial system in dire need of reform. But with the world economy in free fall, my number one task wasn’t remaking the economic order. It was preventing further disaster. For this, I needed people who had managed crises before, people who could calm markets in the grip of panic—people who, by definition, might be tainted by the sins of the past.
For Treasury secretary, it came down to two candidates: Larry Summers, who had held the job under Bill Clinton, and Tim Geithner, Larry’s former deputy and then head of the Federal Reserve Bank of New York. Larry was the more obvious choice: An economics major and debate champion at MIT, one of the youngest professors to be tenured at Harvard, and more recently the university’s president, he had already served as the World Bank’s chief economist, an undersecretary for international affairs, and deputy Treasury secretary before taking the reins from his predecessor and mentor, Bob Rubin. In the mid-1990s, Larry had helped engineer the international response to a series of major financial crises involving Mexico, Asia, and Russia—the closest analogues to the crisis I was now inheriting—and even his fiercest detractors acknowledged his brilliance. As Tim aptly described it, Larry could hear your arguments, restate them better than you could, and then show why you were wrong.
He also had an only partly deserved reputation for arrogance and political incorrectness. As president of Harvard, he’d had a public row with the prominent African American studies professor Cornel West and had later been forced to resign after, among other things, positing that intrinsic differences in high-end aptitude might be one reason women were underrepresented in the math, science, and engineering departments of leading universities.
As I got to know him, I’d come to believe that most of Larry’s difficulties in playing well with others had less to do with malice and more to do with obliviousness. For Larry, qualities like tact and restraint just cluttered the mind. He himself seemed impervious to hurt feelings or the usual insecurities, and he would express appreciation (accompanied by mild surprise) when anyone effectively challenged him or thought of something he’d missed. His lack of interest in standard human niceties extended to his appearance, which was routinely disheveled, his ample belly occasionally exposed by a shirt missing a button, his haphazard approach to shaving often resulting in a distracting patch of stubb
le under his nose.
Tim was different. The first time I met him, in a New York hotel a few weeks before the election, the word that popped into my head was “boyish.” He was my age, but his slight build, unassuming carriage, and elfin face made him appear considerably younger. During the course of our hour-long conversation he maintained a soft-spoken, good-humored equanimity. We had an immediate rapport, partly based on childhood parallels: As a result of his father’s work as a development specialist, he’d spent much of his youth abroad, instilling in him a reserve that I recognized in myself.
After getting a master’s degree in East Asian studies and international economics, Tim worked as an Asia specialist for Henry Kissinger’s consulting shop and then joined Treasury, becoming a junior trade official in Japan. It was Larry Summers who plucked Tim out of obscurity to serve as his special assistant, and as Larry rose, so did Tim. Tim became a central if unheralded player in dealing with the various financial crises of the 1990s, and it was on the strength of Larry’s recommendation that he would end up heading the New York Fed. Their relationship spoke not only to Larry’s generosity but also to Tim’s quiet confidence and intellectual rigor—qualities that had been amply tested over the previous year, as Tim had worked around the clock with Hank Paulson and Ben Bernanke in an effort to contain the Wall Street meltdown.
Whether out of loyalty to Larry, sheer exhaustion, or justifiable guilt (like Rahm—and me—Tim still had kids at home and a wife who longed for a calmer life), Tim spent much of our first meeting trying to discourage me from hiring him as Treasury secretary. I came away convinced otherwise. For anyone—even Larry—to match Tim’s real-time understanding of the financial crisis or his relationships with the current crop of global financial players would take months, I thought, and that was time that we didn’t have. More important, my gut told me that Tim had a basic integrity, a steadiness of temperament, and an ability to problem-solve unsullied by ego or political considerations that would make him invaluable in the task ahead.
In the end, I decided to hire both men—Larry to help figure out what the hell to do (and not do), Tim to organize and steer our response. To make it work, I had to sell Larry on serving not as Treasury secretary but rather as director of the National Economic Council (NEC), which, despite being the White House’s top economic job, was considered less prestigious. The director’s traditional function was to coordinate the economic policy-making process and act as a diplomatic broker between various agencies, which didn’t exactly play to Larry’s strengths. But none of that mattered, I told Larry. I needed him, his country needed him, and as far as I was concerned, he’d be an equal to Tim in formulating our economic plan. My earnestness may have had some influence on his thinking—though the promise (at Rahm’s suggestion) to make Larry the next chair of the Federal Reserve no doubt helped get him to yes as well.
I had other key posts to fill. To head the Council of Economic Advisers—responsible for providing the president with the best possible data and analysis on all economic matters—I chose Christina Romer, a rosy-cheeked Berkeley professor who had done seminal work on the Great Depression. Peter Orszag, the head of the nonpartisan Congressional Budget Office, accepted the job as director of the Office of Management and Budget, and Melody Barnes, a thoughtful African American lawyer and former chief counsel to Senator Ted Kennedy, was put in charge of the Domestic Policy Council. Jared Bernstein, a left-leaning labor economist, came on board as part of Joe Biden’s team, as did Gene Sperling, the bespectacled, hyperarticulate policy wonk who had served four years as Bill Clinton’s director of the NEC and who now agreed, along with campaign economists Austan Goolsbee and Jason Furman, to function as roving utility players.
In the months to come, I would spend countless hours with this brain trust and their deputies, asking questions, sifting through recommendations, poring over slide decks and briefing books, formulating policy and then subjecting whatever we had thought up to relentless scrutiny. Arguments were heated, dissent was encouraged, and no idea was rejected because it came from a junior staffer or didn’t fit into a particular ideological predisposition.
Still, Tim and Larry were the dominant voices on our economic team. Both men were rooted in the centrist, market-friendly economic philosophy of the Clinton administration, and given the remarkable run of economic prosperity during the 1990s, such a pedigree had long been considered a matter of pride. As the financial crisis worsened, though, that record would come increasingly under fire. Bob Rubin was already seeing his reputation tarnished as a result of his role as senior counselor at Citigroup, one of the financial institutions whose massive exposure in the subprime securities market now fed the contagion. As soon as I announced my economic team, press stories noted that Larry had championed significant deregulation of the financial markets during his time at Treasury; commentators wondered whether, during his tenure at the New York Fed, Tim—along with Paulson and Bernanke—had been too slow to sound the alarm about the risk the subprime market had posed to the financial system.
Some of these criticisms were valid, others grossly unfair. What was certain was that by selecting Tim and Larry, I had yoked myself to their history—and that if we weren’t able to right the economic ship quickly, the political price for choosing them would be high.
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AROUND THE SAME time that I was finalizing decisions on my economic team, I asked staffers and my Secret Service detail to arrange a clandestine meeting in the fire station at Reagan National Airport. The facility was empty when I arrived, the fire trucks removed to accommodate our motorcade. I stepped into a lounge that had been set up with some refreshments and greeted the compact, silver-haired man in a gray suit seated inside.
“Mr. Secretary,” I said, shaking his hand. “Thanks for taking the time.”
“Congratulations, Mr. President-Elect,” Robert Gates replied, steely-eyed and tight-smiled, before we sat down and got to business.
It’s fair to say that President Bush’s secretary of defense and I did not hang out in the same circles. In fact, once you got beyond our common Kansas roots (Gates had been born and raised in Wichita), it was hard to imagine two individuals who had traveled such different roads to arrive at the same location. Gates was an Eagle Scout, a former air force intelligence officer, a Russia specialist, and a CIA recruit. At the height of the Cold War, he served in the National Security Council (NSC) under Nixon, Ford, and Carter, and in the CIA under Reagan, before becoming the agency’s director under George H. W. Bush. (He’d previously been nominated by Reagan, but questions about his knowledge of the Iran-Contra affair had led him to withdraw.) With Bill Clinton’s election, Gates left Washington, D.C., joined corporate boards, and later served as president of Texas A&M University—a post he would hold until 2006, when George W. Bush asked him to replace Donald Rumsfeld at the Pentagon and salvage an Iraq War strategy that was then thoroughly in shambles.
He was a Republican, a Cold War hawk, a card-carrying member of the national security establishment, a prior champion of foreign interventions I had likely protested while in college, and now defense secretary to a president whose war policies I abhorred. And yet I was in the firehouse that day to ask Bob Gates to stay on as my secretary of defense.
As with my economic appointments, my reasons were practical. With 180,000 U.S. troops deployed in Iraq and Afghanistan, any wholesale turnover in the Defense Department seemed fraught with risk. Moreover, whatever differences Gates and I may have had regarding the initial decision to invade Iraq, circumstances had led us to share similar views about the path forward. When President Bush—on Gates’s recommendation—had ordered a “surge” of additional U.S. troops in Iraq in early 2007, I had been skeptical, not because I doubted the ability of more U.S. troops to reduce violence there, but because it was framed as an open-ended commitment.
Under Gates’s direction, though, the Petraeus-led surge (and
a brokered alliance with Sunni tribes in Anbar Province) not only significantly reduced violence but also purchased the Iraqis time and space for politics. With the help of painstaking diplomacy by Secretary of State Condoleezza Rice and, especially, U.S. ambassador to Iraq Ryan Crocker, Iraq was on the path to forming a legitimate government, with elections scheduled for the end of January. Midway through my transition, the Bush administration had even announced a Status of Forces Agreement with the Maliki government that would withdraw U.S. troops from Iraq by the end of 2011—a timetable that effectively mirrored what I’d proposed during the campaign. Meanwhile, Gates publicly emphasized the need for the United States to refocus attention on Afghanistan, one of the central tenets of my foreign policy platform. Tactical questions remained regarding pace, resources, and personnel. But the fundamental strategy of winding down combat operations in Iraq and bolstering our efforts in Afghanistan was now firmly established—and for the moment at least, no one was in a better position to carry out that strategy than the defense secretary currently in place.
I also had sound political reasons for keeping Gates. I had promised to end constant partisan rancor, and Gates’s presence in my cabinet would show that I was serious about delivering on that promise. Retaining him would also help generate trust within the U.S. military and the various agencies that made up the intelligence community (known as the IC). Wielding a military budget larger than those of the next thirty-seven countries combined, leaders in the Defense Department and the IC were filled with strong opinions, skilled at bureaucratic infighting, and had a bias for doing things the way they’d always been done. I wasn’t intimidated by this; I knew in broad strokes what I wanted to do and expected that habits born of the chain of command—saluting and executing orders from the commander in chief, even those with which one strongly disagreed—were deeply ingrained.