I find it odd, but it seems to me that a great deal of President Obama's biggest critics come from his own side of the aisle.
springs to mind right off the bat (full disclosure: I'm a big Bill Maher fan - much to my wife's chagrin), but there are many others like him on the Left who think Obama and the Dems have done a lousy job with the opportunity they've had since his 2008 victory.
Now that we're at the post-mortem stage of last Tuesday's Republican rout, one liberal professor from UT Austin (Jeffrey Chiang's alma mater!) suggests that Obama's cozy ties with Wall Street were at fault and insists, "Obama must break his devil's pact with the banks in order to succeed." The good professor isn't wrong.
While I consider the bulk of Galbraith's piece to be leftist hand-wringing over the abject rejection of the Democratic Party by the voters last week, he makes some good points. One thing he and I agree on is that Obama's failure to rein in the banks when they were against the ropes was a critical error that cost our economy any real hope of a fast recovery and probably cost Obama re-election.
But one cannot defend the actions of Team Obama on taking office. Law, policy and politics all pointed in one direction: turn the systemically dangerous banks over to Sheila Bair and the Federal Deposit Insurance Corporation. Insure the depositors, replace the management, fire the lobbyists, audit the books, prosecute the frauds, and restructure and downsize the institutions. The financial system would have been cleaned up. And the big bankers would have been beaten as a political force.
I realize this is a banking forum and a lot of you probably think that the way the banks were dealt with was just hunky-dory. After all, we got back to huge bonuses just a year later, right? But over the long term - a concept Wall Street is incredibly myopic about - these actions have brought about at least a generation of hatred and mistrust of Wall Street that wasn't previously there among the American population.
Americans used to look at Wall Street and think about the possibilities: starting a business, growing funds for retirement, funding innovation, etc... Now people look at Wall Street and feel like they need protection from it. While Jimmy Cayne and Dick Fuld lost their jobs when their firms went under (and walked with hundreds of millions), and John Thain and Ken Lewis were shown the door, not a single one of the principal architects of the crisis has fallen on his sword. Not a single one has even apologized.
Obama's association with the big banks and their lobbyists (Goldman Sachs was his single largest campaign donor) has come back to haunt him and his party, because the American people are at least smart enough to see that the banks got what they paid for. It'll be interesting to see if this new class of GOP victors, who largely disavowed any association with the big banks, are willing to put their money where their mouths are.
Voters are angry because they feel Obama is concerned with X, Y, and Z while they're concerned with A, B, and C. They just feel as if he doesn't care. And that extends to the Wall Street situation as well as everything from the 9/11 mosque controversy to the BP oil spill to the show trial of KSM here in New York. The Dems are wondering why they got wrecked? Because they had their chance and they blew it.
I agree with left-wing anger with obama. It's huge and growing. Some of the smarter left-wingers are even (occasionally) suspicious that he was ever even against Wall street favors and entitlement. In theory a guy would have to be extremely pro-WS to appoint Geithner and Summers, secretly lobbying against HR 4142 ("too big to fail bill") and move Warren to a bullshit position when she tries to make real change. Looking past the anti-WS rhetoric in Obama speeches, there are numerous little pro-WS actions that speak for themselves. One thing is for sure though, Wall Street no longer supports Obama whether he helped or not.
He has no clear message or results. Now both the left and the right are downright suspicious of him for often conflicting reasons.
Seigniorage,
I can't tell if you're being intentionally ironic or not, but Barack Obama has never done a single thing that ran counter to Wall Street's interests. Shitcanning Austan Goolsbee as soon as he was elected (he's back now, thankfully) in favor of Wall Street shills, relegating Liz Warren to what amounts to an advisory role in the consumer protection agency, and watering down the financial reform bill to the point where it institutionalized "Too Big To Fail" - I'm not sure the Street would have been more satisfied if Dick Fuld were President.
Do you really think there is anyone on the Left (or the Right, for that matter) who still thinks that he was ever against Wall Street? And the notion that the Street no longer supports him is par for the course. That's kinda the point of prostitution. They do what you pay them for and then they leave.
What is everybody so surprised about?
Obama's entire White House is comprised of Clinton's cronies.
The Clinton administration bowed down to Wall Street more than any in the last 80+ years.
Funny how all he did was say the word "change" and people bought it contrary to clear cut evidence.
In regards to the article's author, a broken clock is right twice a day. I'm glad you addressed Galbraith as a liberal professor, because the last thing that guy is, is an economist.
I couldn't agree more Edmundo. Obama's rhetoric which constantly panders to populist pressures just makes it worse.
agree presidents should do what ever the fuck they want, fuck the people who elected them and pay their checks
Well, the people elected a representative, not someone who would follow their every whim. The people are mercurial and a good president listens to them, but doesn't follow every one of their changing desires.
"But one cannot defend the actions of Team Obama on taking office. Law, policy and politics all pointed in one direction: turn the systemically dangerous banks over to Sheila Bair and the Federal Deposit Insurance Corporation. Insure the depositors, replace the management, fire the lobbyists, audit the books, prosecute the frauds, and restructure and downsize the institutions. The financial system would have been cleaned up. And the big bankers would have been beaten as a political force."
This is really a great sentiment. Part of the reason I remain so bearish is that I really think that the system does need to collapse in order for us to move on from this whole episode. It kind of happened in 2008, but as this quote mentioned, we didn't go in for the kill. The same people (bar a few congressman voted out last week and the CEO's mentioned above) still run the system. The Fed is run by the same people. The banks are run by the same people. The banks still have the bad loans on the books, just marked-to-fantasy.
I usually enjoy Dennis Gartman's market commentary but I hate when he complains about how un-American it is to walk away from a mortgage. I don't blame anyone that does this. The banking system is only different in that it is propped up (even more) by the government than it was before (thank you Fannie and Freddie!).
The whole decade is an interesting study in the failures of hedonism, both on the part of the bankers and the population as a whole. Short term pleasure was our first concern. The big house, the fancy cars, the front office, new handbags, ipods and flatscreens, an ecstacy induced orgy of cheap credit and consumer goods.
The system needs to crash because the lesson has not been learned. QE 2 won't work. 2011 looks butt ugly.
Well to be honest I wasn't that savvy. That may lower your opinion of me, but I'll be honest. I think a significant portion of the left believed in his hard-stance against wall street all the way until 2010. I suppose that's the hallmark of a great politician. He let the scrutiny fall on geithner and summers and made continuous pleas for bipartisan consensus mixed with some very angry rhetoric against wall street. Strangely enough, wall street, seemingly smart and aware, believed in his rhetoric and ignored such gifts as the mildness of the financial reform bill. I know many smart wall street professionals who genuinely STILL believe he is an anti-WS radical leftist. (of course there can be a big disconnect between the "common" professional and the bigwigs) I think stuff like his 60 minutes quote of not going into office to help a "bunch of fat-cat bankers", Axelrod yelling at GS, and a well-timed introduction of the Volcker Rule really resonated with people an anti-WS stance.
The reality: past the political posturing, I think you are ultimately right. It's like usual. GS was a major backer of the Obama campagin from the start and it along with the rest of WS have their tentacles all over the white house. I think in some ways he wants to give into populist demand, not just as a political move, but because he GENUINELY thinks its right. In "The Promise" Alter claims that Obama told a close whitehouse adviser that the the angriest he ever got in his term was when Blankfein told him that GS will never be in any danger of collapse. He has and probibly will support WS, but very begrudgingly. I don't think all that rhetoric is pure acting. Unfortunately he already killed the Kaufman amendment and now has few gifts left to give. So he may not get WS support for 2012 anyway. It's really sad politically speaking. What do you think about this. Considering how many concessions Obama gave WS, why are they still against him? And will they support him in the future?
Haha squirtlez. What I'm saying is that he panders to populist pressures in word but to Wall Street in action.
Veritatis quo eaque aliquid et sunt. Aut sit id illo doloribus tenetur.
Laboriosam doloribus illo aperiam culpa aut qui. Aut similique impedit voluptatibus animi ut. Temporibus id qui vitae ut quisquam. Ullam aut ex vel eveniet non commodi ipsum sunt. Ratione molestiae nemo voluptatibus consequuntur ut voluptatum.
Beatae voluptates corrupti sed corporis dolore atque dolores blanditiis. Impedit at sint quisquam voluptatem at autem aut.
Nihil laborum est voluptatem delectus quis. Nisi architecto hic deleniti quas. Omnis eaque a consectetur corrupti dicta amet et aut. Sed perferendis debitis dignissimos explicabo nam quas ut.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...