Internal Transcript
February 14, 2011
INTERVIEW OF THE PRESIDENT
BY RON SUSKIND
Oval Office
3:50 P.M. EST

Q: That's a particularly interesting area, though, of decision-making, I find just in looking at a lot of presidencies, because you did take a stand—it was like a leadership moment, lots of folks felt in the room, because, according to the various people and their notes they say, well, the President was quite forceful. He said, look, we don't want to be Japan, we want to be more like Sweden. We've got to do something that's significant in terms of showing what government can do.

In the first part of the meeting, it was a broader idea of several banks, many banks, that—good bank/bad bank resolution, shareholders get knocked out, all that sort of thing. And obviously the legislative people said, go. The AIG bonuses had just blown up that weekend. This is good.

But then you left to get your haircut and see the family, and Rahm stepped up and said, look, with the AIG bonuses, we've got no—I'll keep out the expletives—but we have no credibility in Congress. We're never going to get more money out of them.

You come back after that, after the dinner, and everybody is sort of in a bit of a more of a prepackage. They've talked to each other. And Larry says, look, I don't think we're going to be able to get money from Congress, but what about Citibank? We can do that with the money available in TARP. And there was a long discussion about that.

You said, all right, well, yes, but that will show the effectiveness of government. It's not another Lehman situation. We can take down a bank and not have panic, and then maybe we'll get more money from Congress, having proved ourselves.

That's where the meeting ends. Tim is going to do a stress test, and then the Citibank plan is basically on the tarmac for Treasury, in consultation with the FDIC, I suppose, to pull together.

That's where it stands. But interestingly, three or four weeks later, in a meeting with Christie and Larry and Rahm—Tim wasn't there—when you say, well, we've got the Citibank plan, their resolution breakup—good bank/bad bank—and that should be ready to go. Christie sort of looks at Rahm and says—and Larry—and says, Mr. President, there is no plan; they haven't done one. And you said, well, they better. You were quite agitated, saying, look, this is my will; I've made my decision.

Ultimately they don't do a plan. And I'm just wondering, later, when you saw Tim after that meeting—when you're like, hey, this is my will, I want this done—what Tim said, if you brought it up with him. Because ultimately they didn't do a plan. And as things evolved, well, let's just say that people saw less and less need for one. But what did you say to Tim after that meeting?

THE PRESIDENT: You know, I'll be honest with you. I don't recall the exact conversations. I will say this as a general principle, though—

Q: But you remember being agitated that they hadn't done a plan, of course.

THE PRESIDENT: Well, look, I think "agitated" may be too strong a word. But I will say this—that during this period, what we are increasingly recognizing is that there are no ideal options. And so on something like a Citibank plan and doing a good bank/bad bank structure, the technical constraints around how to execute are enormous. And typically in these situations you might have one institution that you're dealing with. Here we had potentially 50 institutions, and anything that we did, if we didn't get it right, could make everything else worse.

 So what's true is that I was often pushing hard, and the speed with which the bureaucracy could exercise my decision was slower than I wanted. But I don't think—it's not clear to me—and I'll have to reflect on this at some point—it's not clear to me that that was necessarily because of a management problem as it was this was really hard stuff.

I mean, another good example of this is the oil spill, which was probably the most frustrating period of my presidency. And the reason it was so frustrating was we actually managed that pretty well. And the truth is, is that the day that the explosion happened I was fully briefed. Initially the assessment was manageable. Suddenly we get these possible worst-case scenarios. We immediately start preparing for the worst-case scenarios. We bring in Thad Allen. We assign him as the point person. All the management structure was in place. Carol Browner was reporting to me on a day-to-day basis. We're checking off; we're bringing in Steve Chu, every expert that we have in government. I fly down there.

This is all before the press is even paying attention. But it was something that had never happened before. And the technical constraints on shutting this thing down were formidable, even for a nuclear—even for a Nobel Prize-winning physicist like Steve Chu, who ultimately, by the way, at my urging, was sent down there to team up with BP and started designing from scratch various tools to seal the well.

But the reason I use that as an example is that one of the things you discover about the presidency, which is unlike anything else, and certainly unlike the campaign, is that you can manage everything perfectly, and yet what you do still doesn't work. And then the key to management, from my perspective — this is something that I've learned in the campaign and did carry over into my presidency — is the capacity to re-evaluate what you've done, and if it's not working, to try something else, and I think having a good feedback loop, constantly asking questions and making sure that if something is not working, you empower folks and push folks to try something different is the single toughest job but most important job of the President.

In some ways, maybe the only field where I think you get an analogous situation is maybe in medicine where if a doctor has somebody who's really sick, you can go through the various protocols and you can say typically in these cases X might work, Y might work, we're going to try this medication, we might try this surgery. But the patient may not react the way you think the patient was supposed to react and then you've got to try something different.

And a lot of the big problems that I have in this office are ones in which you constantly have to re-evaluate and modify, based on best information. But again, you're working most of the time with probabilities and not with a set of clear answers.

The area during my presidency where I think my management and understanding of the presidency evolved most, and where I think we made the most mistakes, was actually less on the policy-making front and more on the communications front. I think one criticism that is absolutely legitimate about my first two years was that I was very comfortable with a technocratic approach to governance; that here are a series of problems to be solved. And the irony is, is that the reason I was in this office was because I told a story to the American people. It wasn't the specifics of my health care plan or my proposals around Afghanistan. The reason people put me in this office was they felt that I had connected our current predicaments with the broader arc of American history and where we might go as a diverse and forward-looking nation. And that narrative thread we just lost in the day-to-day problem solving that was going on.

And that wasn't because of bad execution on any particular issue. It was just — I think that I was so consumed with the problems in front of me that I didn't step back and remember what's the particular requirement of the President that nobody else can do, and what the President can do and nobody else can do is to tell a story to the American people about where we are and where we need to go.