Reed Hundt - A Crisis Wasted: Barack Obama’s Defining Decisions

A Crisis Wasted

Copyright 2019 by Reed Hundt

All rights reserved. No part of this book may be used

or reproduced in any form or by any electronic or

mechanical means, including information storage and retrieval

systems, without permission in writing from the publisher.

For information, please contact RosettaBooks at

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First edition published 2019 by RosettaBooks

Cover design by Gerre Mae Barcebal

Interior design by Jay McNair

Cover photo: Charles Ommanney / Getty Images

President Barack Obama and ex-President George W. Bush
in the Capitol Building on Inauguration Day, January 20, 2009.

Library of Congress Control Number: 2018950743

ISBN -13 (print): 978-1-9481-2231-3

www.RosettaBooks.com
Printed in the United States of America

This book is dedicated to my beloved wife and three dear children.

Elizabeth Ann Katz, Adam Elias Hundt,
Nathaniel Pullan Hundt, and Sara Jordan Hundt

Timeline of Events

2003

December: Reed Hundt meets Barack Obama

2004

March 16: Obama wins a landslide victory in the Democratic primary of the U.S. Senate election in Illinois

July 27: Obama gives the keynote address at the Democratic National Convention

November 2: Obama wins a seat in the U.S. Senate, George W. Bush wins reelection over John Kerry

December: Obama assembles Senate office with eye on presidency

2005

Early 2005: Obama dines with Bob Rubin

2006

November 7: The Democratic Party wins House and Senate

December: Obama meets Al Gore

Late 2006: Experts begin to predict that the housing bubble will pop

2007

February 10: Obama announces his candidacy for the presidency in Springfield, Illinois

March: Reed Hundt and wife Betsy Katz co-host Obamas first campaign fund-raiser on the East Coast

March 24: At first healthcare forum for presidential candidates in Las Vegas, Obama embarrassed by his healthcare policy

April: Treasury Secretary Hank Paulson says that housing prices are near bottom, will soon begin to rise

June: Obama outlines liberal agenda at Knox College

Late 2007: Larry Summers identifies middle class insecurity as major theme

2008

January 16: Summers recommends timely, targeted, temporary stimulus

February 13: President Bush signs $170 billion stimulus into law

March 7: Summers warns Secretary Paulson that Fannie Mae, Freddie Mac are bankrupt

March 14: The Fed loans Bear Stearns $25 billion to arrange JPM organ purchase; Summers, Sheila Bair, and Obama criticize the bailout

March 27: Obama outlines reform proposals at Cooper Union in New York

June: Hillary Clinton concedes nomination to Barack Obama

June 26: Obama cements alliance with Clinton at the Mayflower Hotel in D.C.

Summer 2008: Obama appoints John Podesta to head transition team

July 30: Housing and Economic Recovery Act is signed into law by President Bush

August 28: Obama accepts Democratic presidential nomination in Mile-High Stadium, Denver, endorses all of the above energy policy

Late summer 2008: Secretary Paulson tries unsuccessfully to convince banks to buy Lehman; Summers and other experts begin to advise Obama on economy

September 7: U.S. government seizes Fannie Mae and Freddie Mac

September 15: Lehman files for bankruptcy

September 16: AIG insolvent; Fed loans it $85 billion

September 23: Ben Bernanke and Paulson testify in Congress about need for legislation to end financial crisis; the next day, President Bush appears on television to call for big bailout

September 25: Presidential candidates and President Bush meet in the Roosevelt Room to discuss the crisis; Sheila Bairs FDIC resolves Washington Mutual

September 29: House votes down Troubled Asset Relief Program; stock market plummets

October 3: House passes a revised TARP bill passed by the Senate two days earlier, including two tranches of $350 billion in bailout money

Early October: Obamas advisers suggest to him a stimulus of $175 billion

October 14: Bair announces FDIC s Temporary Liquidity Guarantee Program

October 17: Obama interviews Timothy Geithner for treasury secretary

October 28: Paulson uses $200 billion of allotted $350 billion from TARP to buy stock in nine big banks

November: China announces $600 billion stimulus program; Joseph Stiglitz writes in New York Times that U.S. stimulus should be more than $1 trillion spent over two years

November 2: Josh Steiner and Jack Lew stimulus proposal for $300 billion circulates in a 36-page memo on November 2nd, reduced to 11 pages and given to Obama by Jason Furman

November 4: Obama wins presidential election; Democrats hold Senate and House by big margins

November 7: President-elect Obama calls press conference in Chicago to outline his economic recovery plan

November 9: Obama announces Rahm Emanuel chief of staff

November 16: President-elect Obama interviews Geithner and Summers for treasury secretary

November 17: At Wall Street Journal conference Summers calls for a $500$700 billion stimulus

November 22: President-elect Obama outlines the stimulus in a radio address dedicated to saving or creating 2.5 million jobs

November 23: Treasury Department guarantees $300 billion of Citigroups debt

November 25: President-elect Obama announces Christy Romer as chair of Council of Economic Advisers, Summers director of National Economic Council, Geithner secretary of treasury

November 26: Obama announces Peter Orszag as head of OMB

November: Jon Favreau meets with Obama to begin work on inaugural address

December 2: At National Governors Association meeting in Philadelphia, President-elect Obama announces an economic recovery plan that would help save or create 2.5 million jobs

December 5: Obama further explains economic recovery plan, creating or saving two to three million jobs

December 5: Blair Levin advises how to spend stimulus money on broadband

Early December: Reed Hundt brings his idea for Green Recovery Investment Plan to Obama economic team

December 5: Tom Daschle announces that President-elect Obama has made health reform one of his top priorities

December 6: Bureau of Labor Statistics announces unemployment 7.1 percent in November

December 6: Summers and Furman circulate four-page memo outlining the American Economic Recovery Plan, which calls for $580 billion stimulus

December 7: Obama says stimulus is his top priority

December 9: Gore meets Obama in Chicago

December 11: Daschle is appointed both secretary of Health and Human Services and White House healthcare czar

December 12: Carol Browner announced as energy czar

December 15: Alice Rivlin, former head of CBO and OMB , predicts unemployment will continue to rise to at least 10 percent

December 16: President-elect Obamas economic advisers meet in Chicago, persuade him to adopt economic recovery plan

2009

January 8: President-elect Obama urges Congress to pass stimulus as soon as possible, warns unemployment otherwise will be in double digits

January 9: Christy Romer and Jared Bernstein report that unemployment will reach 9 percent but for stimulus, will be 7.3 percent if $800 billion stimulus passed