‘We Inherited a Mess’

One of the first family's closest friends from Chicago, Valerie Jarrett came to Washington largely to keep them grounded. She spoke with NEWSWEEK's Lally Weymouth last week at the magazine's fifth annual New York Women & Leadership Q&A forum. Excerpts:

Weymouth: During the last year President Obama's popularity has sunk.
Jarrett: Let's face it, we inherited a mess. If you think about it, a year ago, [America] was losing 700,000 jobs a month. We were in the midst of a financial-institution meltdown. The global economy was literally on the brink of disaster. And now we're no longer losing 700,000 jobs a month. We've stabilized the financial institutions. [But] the economy isn't where we want it to be, because we still have a 9.7 percent unemployment rate. In that kind of economic climate, taking on the bold initiatives that the president took on, it's no wonder that people are feeling very anxious and angry and uncertain.

In retrospect, do you think it was a mistake for the president in his first year to try to pass a health-care bill instead of focusing on job creation?
I think we did focus on the economy. The fact that the economy is a lot more stable today than it was a year ago is a result of [that]. Of course, we've made a lot of mistakes. There's nobody harder on the president than the president. But I think you also have to understand that there was a political calculus in the Republican Party that the best way to regain popularity was to be the party that said no to everything.

You must be worrying about the midterms.
The midterm elections are a long way off. We can't afford to focus on the day-to-day polls. If you think that we should second-guess [the president's] decision to do fundamentally big things, there are plenty of other people who would have been that kind of president. That's not the kind of president he wants to be.

President Clinton's first year in office was not a huge success, but he changed course and moved to the center. Are you saying this president will not change course?
What I'm saying is that I guess I disagree with describing him as being off-center. I think part of why he was so popular and won the election is because he did hit a mid[dle] course. If you look at the policies that he has promoted, they are right in that fairway. Kind of implicit in your question was that the president should change to reflect the realities of Washington. Part of what we are still intent on doing is changing Washington. And that doesn't necessarily happen in one year.

[White House Social Secretary] Desirée Rogers is leaving shortly. Will others in the White House also be leaving?
I think the president [is] more interested in hearing new and fresh ideas than shaking up the White House.

There is a view among some that the president believes in redistribution—taking from the rich to give to the poor. Is this true or a bum rap?
Of course it's a bum rap. Government is there to foster the kind of environment where businesses can create long-term, sustainable, healthy industries that can grow. They need to do that within a framework of rules that will keep the excesses and the abuses that happened a year and a half ago from ever happening again. The intent isn't to penalize Wall Street in any way. It's to make sure that everybody's playing by rules that don't allow for a catastrophe that ripples not just through Wall Street but down to Main Street. And that's good for business.

Wouldn't you agree there's been a lot of [anti–Wall Street rhetoric]?
What the president has said is that there's a huge disconnect between the compensation practices on Wall Street and what's going on on Main Street. [The banks] need to understand that and be mindful of it. We have to figure out quickly how to get the financial regulatory reform in place that we need. As soon as we do that, it'll be a lot easier for everybody.

You were born in Iran.
I was born in Iran. It was a very different country then than it is now. But I think what I learned, and actually what President Obama and I talked about at our first dinner—he having spent a good portion of his childhood in Indonesia—is that it gives you a different perspective to have lived outside of the United States. It teaches you a huge appreciation for our country. But it also teaches you this global perspective that helps inform decisions throughout life's pathway.

Now you're going with the president to Indonesia?
I am. He is looking forward to going back. It's the largest Muslim population in the world. [The trip] gives him the opportunity to continue the dialogue he started in Cairo several months ago.