Top Quotes: “A Promised Land” — Barack Obama

“Like my grandparents, she was suspicious of platforms, doctrines, absolutes, preferring to express her values on a smaller canvas. “The world is complicated, Bar. That’s why it’s interesting.” Dismayed by the war in Southeast Asia, she’d end up spending most of her life there, absorbing the language and culture, setting up micro-lending programs for people in poverty long before micro-credit became trendy in international development. Appalled by racism, she would marry outside her race not once but twice, and go on to lavish what seemed like an inexhaustible love on her two brown children. Incensed by societal constraints put upon women, she’d divorce both men when they proved overbearing or disappointing, carving out a career of her own choosing, raising her kids according to her own standards of decency, and pretty much doing whatever she damn well pleased.

In my mother’s world, the personal really was political — although she wouldn’t have had much use for the slogan.”

“The thought nags at me. And yet even if it were possible for me to go back in time and get a do-over, I can’t say that I would make different choices. In the abstract, all the various alternatives and missed opportunities that the critics offer up sound plausible, simple plot points in a morality tale. But when you dig into the details, each of the options they propose — whether nationalization of the banks, or stretching the definitions of criminal statutes to prosecute banking executives, or simply letting a portion of the banking system collapse so as to avoid moral hazard would have required a violence to the social order, a wrenching of political and economic norms, that almost certainly would have made things worse. Not worse for the wealthy and powerful, who always have a way of landing on their feet. Worse for the very folks I’d be purporting to save. Best-case scenario, the economy would have taken longer to recover, with more unemployment, more foreclosures, more business closures. Worst-case scenario, we might have tipped into a full-scale depression.

Someone with a more revolutionary soul might respond that all this would have been worth it, that you have to break eggs to make an omelet. But as willing as I had always been to disrupt my own life in pursuit of an idea, I wasn’t willing to take those same risks with the well-being of millions of people. In that sense, my first hundred days in office revealed a basic strand of my political character. I was a reformer, conservative in temperament if not in vision. Whether I was demonstrating wisdom or weakness would be for others to judge.”

“Eventually I agreed to a damage-control plan. I began by calling Sergeant Crowley to let him know I was sorry for having used the word “stupidly.” He was gracious and good-humored, and at some point I suggested that he and Gates come visit the White House. The three of us could have a beer, I said, and show the country that good people could get past misunderstandings. Both Crowley and Gates, whom I called immediately afterward, were enthusiastic about the idea. In a press briefing later that day, I told reporters that I continued to believe that the police had overreacted in arresting Gates, just as the professor had overreacted to their arrival at his home. I acknowledged that I could have calibrated my original comments more carefully. Much later I’d learn through David Simas, our in-house polling guru and Axe’s deputy, that the Gates affair caused a huge drop in my support among white voters, bigger than would come from any single event during the eight years of my presidency. It was support that I’d never completely get back.”

“From the very start of the healthcare debate, policy wonks on the left had pushed us to modify the Massachusetts model by giving consumers the choice to buy coverage on the online “exchange,” not just from the likes of Aetna and Blue Cross Blue Shield but also from a newly formed insurer owned and operated by the government. Unsurprisingly, insurance companies had balked at the idea of a public option, arguing that they would not be able to compete against a government insurance plan that could operate without the pressures of making a profit. Of course for public-option proponents, that was exactly the point: By highlighting the cost-effectiveness of government insurance and exposing the bloated waste and immorality of the private insurance market, they hoped the public option would pave the way for a single-payer system.

It was a clever idea, and one with enough traction that Nancy Pelosi had included it in the House bill. But on the Senate side, we were nowhere close to having sixty votes for a public option. There was a watered-down version in the Senate Health and Education Committee bill, requiring any government-run insurer to charge the same rates as private insurers, but of course that would have defeated the whole purpose of a public option. My team and I thought a possible compromise might involve offering a public option only in those parts of the country where there were too few insurers to provide real competition and a public entity could help drive down premium prices overall. But even that was too much for the more conservative members of the Democratic caucus to swallow, including Joe Lieberman of Connecticut, who announced shortly before Thanksgiving that under no circumstances would he vote for a package that contained a public option.”

“There’d been a period toward the end of the Clinton administration and the start of the Bush administration when more moderate forces inside Iran had gained a little traction, offering the prospect of a thaw in U.S.-Iranian relations. After 9/11, Iran’s then president Mohammad Khatami, had even reached out to the Bush adminis tration with offers to help with America’s response in neighboring Afghanistan. But U.S. officials had ignored the gesture, and once President Bush named Iran, along with Iraq and North Korea, as part of an “axis of evil” in his 2002 State of the Union speech whatever diplomatic window existed effectively slammed shut.”

“An agreement that would boost fuel efficiency on all new cars and light trucks from 27.5 miles per gallon to 35.5 by 2016. The plan stood to cut greenhouse gas emission by more than 900 million metric tons over the lifetime of the new vehicles, the equivalent of taking 177 million care off the road or shutting down 194 coal-fired power plants.”

“I set Steve Chu on a mission to update every efficiency standard he could find, using the power of a little-enforced 1987 law that gave the Department of Energy authority to set energy-efficiency standards on everything from lightbulbs to commercial air conditioners. The man was like a kid in a candy store, regaling me with detailed explanations of his latest standard-setting exploits. (“You’d be amazed at the environmental impact of just a five percent improvement on refrigerator efficiency!”) And although it was hard to match his excitement over washers and dryers, the results really were pretty amazing: By the time I left office, those new appliance standard were on track to remove another 210 million metric tons of greenhouse gases from the atmosphere annually.

Over the next several years, carmaker and appliance manufacturers hit the higher efficiency goals we’d set without much fuss and ahead of schedule, confirming Steve’s assertion that when done properly, ambitious regulatory standards actually spurred businesses to innovate. If consumers noticed that the energy-efficient models of cars or appliances were sometimes more expensive, they didn’t complain; they were likely to make up the difference in lower electricity bills or fuel costs, and prices typically settled back down once the new technologies became the norm.”

“Big, bold policies could make a dent in these problems, most of which had to do with rewriting the tax code, strengthening labor laws, and changing the rules of corporate governance. All three items were high on my to-do list.

But when it came to regulating the nation’s financial markets to make the system more stable, the Left’s prescription missed its mark The evidence didn’t show that limiting the size of U.S. banks would have prevented the recent crisis or the need for federal intervention once the system began to unravel. JPMorgan’s assets dwarfed those of Bear Stearns and Lehman Brothers, but it was those smaller firms’ highly leveraged bets on securitized subprime mortgages that had set off a panic. The last major U.S. financial crisis, back in the 1980s, hadn’t involved big banks at all; instead, the system had been rocked by a deluge of high-risk loans by thousands of small, poorly capitalized regional savings and loan associations (S&Ls) in cities and small towns across the country. Given the scope of their operations, we thought it made sense for regulators to give mega-banks like Citi or Bank of America extra scrutiny — but cutting their assets in half wouldn’t change that. And since the banking sectors of most European and Asian countries were actually more concentrated than they were here, limiting the size of U.S, banks would put them at a big disadvantage in the international marketplace, all without eliminating the overall risk to the system.

For similar reasons, the growth of the non-bank financial sector made Glass-Steagall’s distinction between investment banks and FDIC-insured commercial banks largely obsolete. The largest bettors on subprime mortgage securities — AIG, Lehman, Bear, Merrill, as well as Fannie and Freddie — weren’t commercial banks backed by federal guarantees. Investors hadn’t cared about the absence of guarantees and poured so much money into them anyway that the entire financial system was threatened when they started to fail. Conversely, traditional FDIC-insured banks like Washington Mutual and IndyMac got into trouble not by behaving like investment banks and underwriting high-flying securities but by making tons of subprime loans to unqualified buyers in order to drive up their earnings. Given how easily capital now flowed between various financial entities in search of higher returns, stabilizing the system required that we focus on the risky practices we were trying to curb rather than the type of institution involved.

And then there were the politics. We didn’t have anything close to the votes in the Senate for either reviving Glass-Steagall or passing legislation to shrink U.S. banks.”

“In June 2009, after months of fine-tuning, our draft legislation for financial reform was ready to take to Congress. And while it didn’t contain all the provisions the Left had been looking for, it remained a massively ambitious effort to revamp twentieth-century regulations for the twenty-first-century economy,

At the core of the package was a proposal to increase the percentage of capital that all financial institutions of “systemic” importance — whether banks or non-banks — were required to hold. More capital meant less borrowing to finance risky bets. Greater liquidity meant these institutions could better weather sudden runs during a market downturn. Forcing Wall Street’s main players to maintain a bigger capital cushion against losses would fortify the system as a whole; and to make sure these institutions hit their marks, they’d have to regularly undergo the same kind of stress test we’d applied at the height of the crisis.

Next we needed a formal mechanism to allow any single firm, no matter how big, to fail in an orderly way, so that it wouldn’t contaminate the entire system. The FDIC already had the power to put any federally insured bank through what amounted to structured bankruptcy proceeding, with rules governing how assets were liquidated and how claimants divvied up whatever remained. Our draft legislation gave the Fed a comparable “Tesolution authority” over all systemically important institutions, whether they were banks or not.

To improve consistency of enforcement, we proposed streamlining the functions and responsibilities of various federal agencies. To facilitate quicker responses in the event of a major market disruption, we formalized authority for many of the emergency actions — “foam on the runway,” our economic team called it — that the Fed and Treasury had deployed during the recent crisis. And to catch potential problems before they got out of hand, our draft legislation tightened up rules governing the specialized markets that constituted much of the financial system’s plumbing. We paid particular attention to the buying and selling of derivatives, those often impenetrable forms of securities that had helped intensify losses across the system once the subprime mortgage market collapsed. Derivatives had legitimate uses — all sorts of companies used them to hedge their risk against big swings in currency or commodity prices. But they also offered irresponsible traders some of the biggest opportunities for the kinds of high-stakes gambling that put the entire system at risk. Our reforms would push most of these transactions into a public exchange, allowing for clearer rules and greater supervision.”

“We began looking for a U.S. facility — whether on a military installation or within the existing federal prison system — that could immediately house transferred Gitmo detainees while we determined their ultimate dispositions.

That’s when Congress began to freak out. Republicans got wind of rumors that we were considering the possible resettlement of Uighurs in Virginia (most were ultimately sent to third countries, including Bermuda and the island nation of Palau) and took to the airwaves, warning voters that my administration planned to move terrorists into their neighborhood: maybe even next door. This made congressional Democrats understandably nervous, and they ultimately agreed to a provision added to a defense spending bill that prohibited the use of any taxpayer funds for the transfer of detainees to the United States for anything but a trial; it also required Bob Gates to submit a formal plan to Congress before a new facility could be chosen and Guantánamo shut down. Dick Durbin approached me in the spring of 2010 with the possibility of using a largely vacant state prison in Thomson, Illinois, to house up to ninety Gitmo detainees. Despite the jobs it was likely to bring for residents of a rural town hard-hit by the economie crisis, Congress refused to fund the $350 million needed to buy and renovate the facility, with even some liberal Democrats echoing Republican argument that any detention center located on U.S. soil would become a prime target for future terrorist attack.”