The New Yorker magazine has created quite a buzz with a story by Ryan Lizza entitled “The Obama Memos.” Needless to say, it is a highly-flattering portrait of President Obama and the underlying theme is that—gosh durn—it’s hard to be president.

There article includes lots of behind-the-scenes maneuvering that shows how policy is made in the Obama White House. I love this:  

[The president’s financial advisers] gave him one other crucial piece of advice. The tax cuts passed by George Bush would soon expire. Obama favored extending Bush’s middle-class cuts and ending the upper-income cuts. Tackling the deficit would be impossible otherwise.

But his economic team warned that, given the political climate, the extension of all the Bush tax cuts “could gain serious traction.” Not to worry, his political team insisted. Pelosi would never allow that to occur. We’re “confident that the Speaker would not agree to this becoming law,” Obama was assured.

Lizza's main source for the story is a 57-page, confidential memo that economist Lawrence Summers, who would go on to become the head of the National Economic Council, wrote for the president-elect in December of 2008. It is the Summers memo that has generated so much conversation.

The American Enterprise Institute’s James Pethokoukis has gone through the memo and the result is a blog post that deals with what the Obama team was thinking as it prepared to take office amid a financial crisis.

If you already feel bitter about how the government squanders the hard-earned money you have to send it every April 15, Pethokousis “11 stunning revelations from Larry Summers economics memo” will do nothing to mollify you. Each revelation is followed by the supporting text from the Summers memo. I have to say that stunning is a bit of an understatement. .

The most disheartening point is that the stimulus package—the package that our grandchildren will be paying for—was mostly “about implementing the Obama agenda.”

Supporting text from the Summers memo:

The short-run economic imperative was to identify as many campaign promises or high priority items that would spend out quickly and be inherently temporary. …  The stimulus package is a key tool for advancing clean energy goals and fulfilling a number of campaign commitments.

Another point: “Obamanomics was pricier than advertised:”

Said Summers:

Your campaign proposals add about $100 billion per year to the deficit largely because rescoring indicates that some of your revenue raisers do not raise as much as the campaign assumed and some of your proposals cost more than the campaign assumed. … Treasury estimates that repealing the tax cuts above $250,000 would raise about $40 billion less than the campaign assumed. … The health plan is about $10 billion more costly than the campaign estimated and the health savings are about $25 billion lower than the campaign estimated.

Oh, and this: “IPAB [the Independent Payment Advisory Board that is a key part of Obamacare] was there from the beginning:”


There are two possibilities for making tough decisions on the long-run budget, which could be done either separately or together: creating an executive-branch “health board” (which focuses on one part of the issue) and a Congressionally chartered commission (which could focus more broadly).

I urge you to read Pethokousis’s entire post, since I can only hit the high points.

The Lizza article is a bit like the Jodi Kantor book, "The Obamas," in that, while both authors are fans of the administration, they have both unintentionally presented an unflattering account.