FT Reveals Orszag Resigns Over Inability To Persuade Summers And Obama Keynesianism Leads To Suffering

Tyler Durden's picture

As we speculated previously, the sudden and unprecedented departure of Peter Orszag, the day prior to the US Budget's formalization (which incidentally never happened as now the US will likely not have a 2010 budget at all, for fear of disclosing to most Americans just how broke the country is ahead of mid-terms) was due to Orszag's disagreement with the administration's, and particularly Larry Summer's, inability to fathom that reckless spending is a recipe for bankruptcy. As the FT reports: "Peter Orszag, Barack Obama’s budget director, resigned this week partly in frustration over his lack of success in persuading the Obama administration to tackle the fiscal deficit more aggressively, according to sources inside and outside the White House." And so, as any remaining voices of reason realize they are dealing with a group of deranged Keynesians, soon there will be nobody left in the administration who dares to oppose the destructive course upon which this country has so resolutely embarked, which ends in one of two ways: debt repudiation, or war. And with the only remaining economic "advisers" being the trio of Summers, Romer and Geithner, you know America will somehow hit both of these mutually exclusive targets.

More from FT:

Mr Orszag, whose publicly stated reasons for leaving were that he was exhausted after years in high pressure jobs and also that he wanted to plan for his wedding in September, is seen as the guardian of fiscal conservatism within the White House.

Other members of Mr Obama’s economic team, notably Lawrence Summers, the head of the National Economic Council, have placed more emphasis on the need for continued short-term spending increases to counteract what increasingly looks like an anaemic economic recovery in the US.

Although Mr Orszag agrees with the need to push short-term spending, particularly in the Senate, which again this week failed to pass a measure extending insurance to the unemployed, the budget director has become increasingly frustrated with the administration’s caution on longer-term fiscal restraint.

Mr Orszag, whom Mr Obama has dubbed a “propeller-head” because of his brilliant facility with projections and spreadsheets, has tried but failed to convince his colleagues to “step up the action”, according to one insider.

In particular, he has collided with the political team, led by Rahm Emanuel, Mr Obama’s chief of staff, over Mr Obama’s 2008 election pledge not to raise taxes on any households earning less than $250,000 a year – a category that covers more than 98 per cent of Americans.

Economists say that would put all the fiscal emphasis on draconian – and highly unrealistic – spending cuts, or else pushing the marginal tax rates on the very rich to confiscatory levels. “Peter feels strongly that this is a pledge that has to be broken if the President is to take a lead on America’s fiscal crisis,” says an administration official not authorised to speak on the matter.

And after Barney Franks's disastrous appearance earlier on, where the market did a shot and an uptick for every lie uttered, we can safely say that this bankrupt country truly deserves all of its elected individuals.

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MarketTruth's picture

Makes no sense to hold a job in America.Free welfare, food stamps, virtually housing, fre medical...


Now look at them yo-yo's
That's the way you do it...
Money for nothin' and your chicks for free
i.knoknot's picture

are the free chicks in the new financial reg bill? couldn't find 'em in the health-care version ...

(knopfler still rocks)

Arius's picture

thats probably true of any people...the discovery is that americans are no exception despite all...

litoralkey's picture

You see you've got your 4 basic food groups,cornnuts-meat group, sweettarts-fruit group, Abba Zabba'a-vegatable group, milk duds-dairy group.


The continental United States has enough natural gas, oil production, and agricultural production that there will never be a prolonged food shortage unless there is societal breakdown.


There will never be societal breakdown as long as the agricutlural products get to the mouths of the masses.

Anything less than a energy, transportation and agricultural sector nation wide strike will not alter this reality.

(outside of meteor strikes and other Acts of God)


Under that paradigm, before enlightment you chopped wood and carried water.

After this enlightment, you chopped wood and carried water.


American Fatalism as a philosophy is a lack of focus to survive and produce another generation able to thrive.  No matter what the regime diktats opress.

Pondmaster's picture

Geithner and Summers - Up this weekend

Watch word ! Huh ? FOOD SECURITY ? What does that mean ? Incursions into rich arable land countries as has been done with oil ? You bet !

The president heads to Toronto this week for the G-20 summit, putting the group in the headlines for the first time since September. In The Wall Street Journal, Treasury Secretary Tim Geithner and director of the National Economic Council Larry Summers lay out the administration's goals for this meeting. Priority number one, they say, is maintaining the global growth that will fuel America's and the world's economic recovery. After that come efforts toward global financial regulation, and a host of other issues, from food security to shifting away from fossil fuels. Here's the breakdown.

foofoojin's picture

your military trained? that the psychology of a snipper. I knew a good snipper. derailed trains carrying food in South/Central America during the late 80, early 90 when we didn't like the new governments. told me how he watch as an "observer" a mob tear apart their lawyers and leaders into small pieces of meat right on front of the capital buildings... When you tell a starving person that all the food and aid they need is right at  the gates. and there leaders are keeping it from them.  well, it's like you said. until then. nothing will be done.

homersimpson's picture

Somehow, enough sheep voted for the Keynesian (or was that Kenyan?) King in Nov 08.



pan-the-ist's picture

Hi Homer-

There was no way that McSame/Palin could have won in 2008.  If they had (through Divine intervention) they would have instituted the same policies (though packaged so the left would have complained.)

If Dr. Paul would have won, he would have been in the ground before he took office.

Red Neck Repugnicant's picture


Yes, we need to bring back the fiscal responsibility of a Republican White House. If we're going to spend money, it needs to go to war and bankers. 

To be honest, I'm not quite sure where Obama spends all our tax dollars.  I'm pretty sure it goes to homosexuals, illegal immigrants and couch potatoes.

I don't vote based on fiscal issues, because they're too complicated. People like Hannity, Beck and Rush are far smarter than me, so I rely on them for my information. I vote on social issues that revolve around guns, god and my highly opinionated views on various groups of people.


Jesus/Palin 2012 


hangemhigh's picture

"I don't vote based on fiscal issues, because they're too complicated. People like Hannity, Beck and Rush are far smarter than me, so I rely on them for my information. I vote on social issues that revolve around guns, god and my highly opinionated views on various groups of people."

ahh, red, a man after my own heart....god & guns..can't go wrong there. i'd add pick-up trucks, nascar and big breasted women, too. as for hannity, beck and rush, them guys, too me, they're just high profile losers with a misbegotten pedigree: an ill fated triad that overdosed on their own press clippings and media-con agitprop.

Dental Floss Tycoon's picture

Jesus couldn't win the top spot.  Palin might support him for VP to balance the ticket.

Palin/Jesus 2012

clickjaw's picture

You actually think there is a difference between BHO and Dubya, don't you? Who do you think controls old Barry? Definitely not war-mongers and banksters, right?

You're an idiot!


i.knoknot's picture

"...you know America will somehow hit both of these mutually exclusive targets."

+++ you guys rock.

centerline's picture

And now they have this to add to the budget problem...




MsCreant's picture

I have an idea on what we can do with the oil we collect in the gulf...

Lux Fiat's picture

I was thinking that the oil collected could stay local and get combined with bags of feathers - the latest political fashion statement.

WeeWilly's picture

Centerline, I've got to get me one of those cool hats!

Clayton Bigsby's picture

that's right - sue us, you fucking jumpsuit wearing midget

MsCreant's picture

To Peter Orszag:

You must do a tell all for Rolling Stone. Or right here at ZH. But somewhere. Get the real story out.

cbaba's picture

He has no story.

He has crocodile tears.

Apostate's picture

Bah! I'll second the recommendation.

Join in the backstabbing party, Orszag! They hit you first; now you hit back. 

cbaba's picture

some more details with his own words on why he dumped the greek and marrying the russian:

The attraction? “She’s a Russian Jew,” he said, “who gets up earlier than I do.”



I need more asshats's picture

Right on Ms. I couldn't agree more. My Asshat off to you.

MsCreant's picture


I am inspired.

You could start a whole ratings system (or agency) with this. I of course consider this Asshat salute an honor but you need to be bold and take it to the next level. Is it a one Asshat, two Asshat, or more? You could rate stocks, comments, whatever, in Asshats. Is it numbers of Asshats, or kinds of Asshats?

_A_  _A_  _A_  _A_  _A_

I just gave your Asshats a 5 Asshat rating.

And, this would be a reason why you need more Asshats!


Vix_Noob's picture

Get those asshats now or be priced out forever!

Hephasteus's picture

All I can say is the pentagon had better get off of wikileaks ass and back the hell down.

New_Meat's picture

Ms--he has no personal security.  Ballziest move ever--he's nay a playa', not lile McC who has all of China Post 1 and the rest to keep him and his close to good.  He can't get there, and RS won't get there.  God Bless Orzag.

- Ned

P.S. I owe you some info on "green" economics--working on it, but, y'know day job.

LoneStarHog's picture

Has anyone noticed that none of the Congresscritters have been spouting the tired ol' mantra, "We Are The Richest Country In The World!".  The last one that I can remember is that New York WHORE Schummer and that was some time ago.

Problem Is's picture

My favorite Wall Street bribe whore...
Including a personal appearance at the Lipstick Building, Bernard Madoff Securities to solicit campaign bribes...

The one and only...

Schmucky Schumer.

downwiththebanks's picture

Good ol'Death Panel Peetie O:  

It's too bad he's gone, because his austerity policies of mass starvation and privatized suffering (while the banks get free money) would have gone over swimmingly.

And with good results, no doubt, since the best thing for a capitalist depression is an intentionally accelerated program of mass unemployment and destitution among the masses of working people.

Creative destruction rocks, I suppose, if you're not among the destroyed.

The Rogue Trader's picture

This all sounds wildly Gold Bullish.....

hambone's picture

+1000...if this news that the WH will not accept part time Keynesian's and only full blooded, card carrying, take it to the nth Keynesians will do...if this can't get Gold over the top come Monday...then Goldss not worth buying cause it's either manipulated or not what folks thought it was.

Anarchist's picture

The goal is and has been to burn the house down. There will be no deviation of the Titanic from it's date with destiny. Of course a few more wars are in the works to keep the Sheep busy rooting for the "good" guys.

LoneStarHog's picture

Deranged Keynesians = The perfect example of a Pleonasm

mikla's picture

Well, so long "propeller-head".  We disagree about how smart it is to spend more in the short term (how much more is there to buy what?), but of course, it's a good thing you got out before the ceiling fell (and it will).  You've got enough to worry about with your impending nuptials.

And so, as any remaining voices of reason realize they are dealing with a group of deranged Keynesians, soon there will be nobody left in the administration who dares to oppose the destructive course upon which this country has so resolutely embarked, which ends in one of two ways: debt repudiation, or war.

Of course, "War" is merely an instrument of policy.  It's the ability to forcibly assert "Up Yours", or defend yourself from repercussions when you say "Up Yours".  So, we get debt repudiation either way:  War is merely the optional side-effect when the other side is sufficiently displeased with the default decision.

Amish Hacker's picture

+1.  The other aspect of war that bears looking at is that it's by far the most effective method ever found for transferring wealth from a large group of people to a small group of people. Follow the money.

jkruffin's picture

It is time for Obama to be impeached and his cabinet replaced, no two ways about it. 

Crab Cake's picture

It's bigger than that JK and you know it.  This is about the whole fucking American enchilada.  It's not about one criminal administration.  This is about corruption rampant at every possible level, the two party duopoly, the corporations, the ratings agencies, the Wall St bubble machine, the Fed, the IRS and property tax systems, the war on drugs, the welfare state, the accountants, the bloated beareaucracy.... need I go on?

The whole system must be impeached.  It's do over time.  No two ways about it.

RockyRacoon's picture

You are right, of course.  The President (whomever that may be) is a convenient target because he/she is the most visible.  To blame the Executive Branch is extremely nearsighted.  Proposing the removal is one thing, coming up with a replacement is another.  I've yet to see anyone put forth a suitable holder of the office.

Red Neck Repugnicant's picture

I agree.  Impeaching Obama will solve most of the problems in this country. At the very least, it will cut the funding to homosexuals and illegal immigrants.  We need to return the White House to the good-old days of financial prudence, when Bush was in office.  

Palin/Jesus/Beck 2012

Alethiometer's picture

I would think this seals the deal on another "preemptive" war against a "horrible and oppressive" regime.  Hmmm...Let's see, who's left, and in what order to attack? We have: Iran, North Korea, Pakistan...then maybe we can launch "humanitarian campaigns" into resource rich Africa...then after we plunder them we can take on China and Russia.  We still have lovely, seemingly non-ending campaigns going in Iraq and Afghanistan, so I would say we are right on target.  Miltary-Industrial Complex to the rescue! 

jkruffin's picture

North Korea? LOL  Their soccer team, as a reward for their excellent World Cup play, is being sent to work in the coal mines for KJI.  ROFLMAO  Why don't the people just kill that stupid idiot?


Clayton Bigsby's picture

Same thing as Chavez - why kill them when they can fuck their own country so badly without our help to never be able to pose a threat again?

tao400's picture

Why will this lead to a war. I don't doubt it but don't understand why.

QQQBall's picture

Dude, technically I think Pakistan is an ally?