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Administration Ratchets Up PR Campaign for Beleaguered Emanuel and Geithner

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The evidence just keeps mounting that Team Obama sees its flagging poll ratings and increasing criticism of key incumbents as a mere communications/imaging problem. Its response is just to slap more lipstick on those pigs.

Let’s look at a couple of particularly obvious plants. One is from the Washington Post by Dana Milbank, “Why Obama needs Rahm at the top.” The title is a tacit admission that the calls for Rahm’s ouster have gotten noisy enough that merely ignoring them will no longer do. But this piece is such a vomititious piece of fawning spin-transmission that I can’t imagine anyone taking it seriously. I pinged a Capitol Hill insider for his reaction and got this:

My guess is that this is Rahm’s exit memo. Rahm’s method is self-promotion through people like Dana Milbank. He’s like an executive going down with the ship using the press to shift the blame to everyone but himself.

A more adept but ultimately no more persuasive piece runs at the Wall Street Journal. The headline alone is a sorta win for Team Obama: “Bailout Anger Undermines Geithner”. Yes, they have to admit the Treasury secretary is bloodied (it would be hard not to notice how Paul Volcker has suddenly become he face guy for the Administration’s financial reform program) but it’s due to anger, which is code for lunacy. Sane people are of course ever and always level headed. No reason to be angry just because banksters enriched themselves on a scale heretofore unheard of, and as a result wrecked the housing market, the commercial real estate market, most people’s retirement accounts, and on top of that, looted taxpayers and are merrily off repeating the very same behavior that created The Near Destruction of the World Economy, 2007-2008 Edition.

No, the failure to have investigations, prosecutions, and a serious restructuring of the financial system is the lunacy in this picture. But Team Obama is hopelessly in bed with the financial services industry; they were the industry that made the biggest campaign donations (and Rahm himself had cultivated hedge fund and private equity managers). So the Journal blandly runs the Administration party line as conventional wisdom:

His dilemma: The bank rescues he helped engineer averted economic collapse. Yet to some lawmakers, Mr. Geithner looks weak. His association with unpopular financial bailouts has become an albatross. His neutral rhetoric on bankers’ bonuses—the fat payouts are “very hard for people to understand,” he recently told CNBC—spurs talk that he coddles Wall Street.

Yves here. This is complete and utter bunk. “The bank rescues…averted economic collapse”? No, there was a vocal contingent arguing early this year that putting the banks in receivership, which happens to be the very policy the Administration is advocating now, with its “living wills” program, would be the best course of action. By happenstance, Ed Harrison provided a reminder in a post earlier tonight. An IMF study of 124 banking crises concluded that winding down impaired banks, although more painful in the short term, was less costly, both to taxpayers and in terms of economic growth.

So a lack of political will, the failure to take over the sick big banks, just as the FDIC does with the small fry, is falsely portrayed as sound policy. And Geithner does not just look weak, he IS weak. Has he ever stood up to the industry? Opposing a bailout of Lehman does not count, that was the course of least resistance in the backlash after the subsidized acquisition of Bear by JP Morgan. Similarly, his bonus talk is loud and clear: he BELIEVES in those big bonuses, he just lacks the guts to say so. He knows he has to cover for how badly he is captured by the industry.

We also have other annoying misrepresentation later in the article:

Mr. Geithner’s approach to stabilizing the financial system, particularly the “stress tests” to measure bank health, helped put a floor underneath the crisis, something even critics concede.

Yves here. Sorry, this is simply counterfactual. Many of the critics of his plan have not changed their dim view of the stress tests (and let us not forget that the PPIP, another element of the Geithner plan, has been a bit of an embarrassment). Let’s hear from Simon Johnson:

The Obama administration, after some initial hesitation, used “stress tests” to signal unconditional support for the largest financial institutions…

The downside scenario in the stress tests was overly optimistic, with regard to credit losses in real estate (residential and commercial), credit cards, auto loans, and in terms of the assumed time path for unemployment. As a result, our largest banks remain undercapitalized, given the likely trajectory of the US and global economy. This is a serious impediment to a sustained rebound in the real economy – already reflected in continued tight credit for small- and medium-sized business.

Even more problematic is the underlying incentive to take excessive risk in the financial sector. With downside limited by generous government guarantees of various kinds, the head of financial stability at the Bank of England bluntly characterizes our repeated boom-bailout-bust cycle as a “doom loop.”

The article has more seeming objective but actually slanted accounts, giving the logic of various Geithner positions, and the resistance they encountered, all told to create the impression that opponents are either rubes, unreasonable, or driven by the need to appease that lunatic, um, angry public.

But it was pretty obvious that something was up last week when I got this Treasury press release: “Treasury Secretary Tim Geithner Remarks on the Healthy Food Financing Initiative“. And indeed, the Journal reveals this uncharacteristic move is part of a charm offensive (the Journal has a picture of Geithner “touring” a grocery store. “Touring”? Are normal domestic errands that alien to our Treasury Secretary? The stunt smacks more than a bit of desperation.

Of course, we get the usual denials:

In interviews, top White House officials—including Rahm Emanuel, the president’s chief of staff, and senior political adviser David Axelrod—said Mr. Geithner’s job is secure. “The president’s view is that Tim is one of the stars,” Mr. Emanuel said. “Tim was an essential and a key player in developing a strategy that helped restore confidence and turn the whole country around.”

Yves here. So far, Geithner’s job looks safe. It’s when the President has to start defending him that we will know that the end is nigh.

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20 comments

  1. attempter

    Wingnut welfare is so entrenched that these clowns seem to have gratuitously shorn themselves of the age old, inexpensive method of buying time and new political capital, sacrificing and scapegoating an unpopular subordinate.

    Hell, the endless willingness of the people to believe, “if only the czar knew about this, he’d fix it”, shows how desperate they are to still believe their Leader is somehow on their side.

    But no, Obama doesn’t want to do it. More evidence that his vaunted “intelligence” and political “savvy” were overblown. On both counts, as president he seems to incarnate the Peter Principle.

    And here we have yet another identicality with Bush. Bush’s loyalty to the most vile subordinates, no matter how much heat was on, used to be taken as a Republican feature, and an idiosyncracy of the Bush family.

    Since Obama’s neither Republican nor a Bush, I guess we’ll need another explanation for it which embraces both of them.

    How about, both parties are identical kleptocratic toxins in one congealed, brazen, burning scum pit.

    1. DownSouth

      “…both parties are identical kleptocratic toxins in one congealed, brazen, burning scum pit.”

      That pretty much sums it up.

  2. soulmatic09

    Yves-

    That stunt with the ever popular first lady was particularly heinous.

    Can you imagine Laura Bush and Paulson sauntering down aisles at whole foods picking up organic arugula?

  3. Francois T

    Sane people are of course ever and always level headed.

    To which you could have added: “…and therefore, can see with utmost clarity why it is past due time for Rahm Emmanuel and Timothy Geithner to leave.”

    :-D

  4. Francois T

    “We also have other annoying misrepresentation later in the article:

    Mr. Geithner’s approach to stabilizing the financial system, particularly the “stress tests” to measure bank health, helped put a floor underneath the crisis, something even critics concede.”

    Oh! Do they mean, these stress tests?

    ;-)

  5. Mike K

    If the Dems lose one or more houses of Congress (still a longshot at this point, but the Senate keeps giving surprises), Geithner will pull a Rumsfield and step down (to spend more time with his family or maybe fix up his home in New York that he wasn’t able to sell). Then, Krugman, DeLong (both of whom seem to be saying everything and anything to get the administration’s attention) along with Summers will prostrate themselves to take his place.

  6. Frank A.

    Three stars for using vomititious in your essay. It describes most of the political coverage in the MSM.But I have to ask, have you used it conversationally? It doesn’t want to roll off my tongue so easily. But then, my wife says I mumble a lot.

      1. Doug Terpstra

        Wow. Flagitious really is a word: extremely wicked, deeply criminal; “a flagitious crime”; “heinous accusations”. It sure fits.

        Until I looked it up, I thought you were saying you had gas—-hence people looking askance at you.

  7. Sasher

    (Rahm) Emmanuel and (David) Axelrod giving fulsome praise to Geithner??? Sounds like a Rajan and Raman praising a Raghavan or a Chang and Choi praising a Wang. This kind of Tribal loyalties in the Old World were why the United States Government was built. Instead we have a bunch of scumbags praising each other and an incurious President hovering above it all. Disgusting!!

    As I am wont of saying: We need more diversity in the Media, the Fed and in the Government. Otherwise, we are doomed since these elitist basterds will keep hiring minions from each other’s homes because “he’s such a nice ____ boy” while the rest of us thinks that he is devil’s spawn.

  8. Dean S

    Obama and his cabinet appointees are just city hall slobs. Their overiding mentality is go along and get along. This is how they all rose through the political ranks.

    Any beliefs they may have held at one time for social and economic justice have long been subordinated to their venal cravings for power and money. As political enablers, they are no better than the scum who occupy the upper echelons of Wall Street and Multi-national corporations.

    Americans need to grow up. Candidate Obama was a “Marchen”. It was only a well orchestrated PR campaign. Forget about any meaningful reform under this administration.

    As Woody Allen said; “I felt a lot better once I gave up hope”.

  9. Hugh

    Politically the time to ditch Geithner and Rahm would be after the November elections. Even should this happen it will still all be atmospherics. Getting rid of Geithner means nothing if Obama keeps Summers, Orszag, Goolsbee, and Romer. Dumping Emanuel won’t do much either. The next Congress will be even more corporatist and conservative than the current one. And Obama has shown no inclination to give up on the Blue Dogs. So even if a few of the faces change it is unlikely that this will result in better policy. And of course, Obama had the perfect occasion not only to get rid of Bernanke but blame him for a lot of this mess. Instead he stuck with him and pushed through his confirmation to a second term.

  10. gordon

    I thought a year ago and still think that the real answer is just simple panic. I don’t think Obama and his advisors had any idea what was going on in the financial markets in 2008. There seemed to be some sort of problem with subprime loans, but the Federal Reserve was going to fix it and it wouldn’t affect their campaign or require any policy adjustments. Then when the roof fell in they just panicked because they were completely unprepared. They did what Wall St told them to do because they had no ideas of their own and they were very frightened. They have been trying to cover their tracks ever since.

  11. koshem Bos

    It is probably a historical first that large gangs target the president’s chief of staff. After all, he is a hired hand. The call to war on him assumes that either Obama is a complete push over dominated by Rahm or that Obama has difficulties controlling the guy.

    The hope that the removal of the Two will elevate the Obama failure to success seems to me unrealistic.

  12. Doug Terpstra

    “Has he ever stood up to the industry? …his bonus talk is loud and clear: he BELIEVES in those big bonuses, he just lacks the guts to say so. He knows he has to cover for how badly he is captured by the industry.”

    That become especially clear when the soon-to-be former Senator Chris Dodd lied outright about the immaculate conception of the bonus protection provision in the bailout bill, specifically for AIG. Firtst he had no idea how that pesky thing could have gotten itself in there; finally he fessed up, saying it was inserted at the insistence of Timmy.

    Instead of have more time to spend with the brats, they both should be roommates at the pen.

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