New Names, Same Old Enemies

Paul Krugman’s latest column links to a New York Magazine cover article by John Heilemann provocatively titled “Obama Is From Mars, Wall Street Is From Venus: Psychoanalyzing one of America’s most dysfunctional relationships”. As might be expected from Mark Halperin’s writing partner, it’s not hard to spot Heilemann’s best sources — I had not previously been given to understand that Timothy Geithner, for example, is not only President Obama’s “man crush”, but also a highly skilled political operative and practically a secular saint. Heilemann’s discussion of the sausage-making behind the Financial Reform Act does paint a vivid picture of our Wall Street masters as a bunch of WATBs:

… On May 20, the Senate passed its bill to reregulate Wall Street by a vote of 59-39, complete with a (watery) version of the Volcker Rule. The story of the legislation’s passage can be told in a number of ways: a tale of conflict or compromise, triumph or capitulation. But on any reading, that story is only the climactic chapter in a larger narrative: how the masters of the money game fell out of love with—and into a state of bitter, seething, hysterical fury toward—Obama.
__
The speed and severity of the swing from enchantment to enmity would be difficult to overstate. When Obama was sworn into office, Democrats on Wall Street rejoiced at the ascension of a president in whom they saw many qualities to admire: brains, composure, bi-partisan instincts, an aversion to class-based combat. And many Wall Street Republicans—after witnessing the horror show that constituted John McCain’s response to the financial crisis—quietly admitted relief that the other guy had prevailed.
__
Today, it’s hard to find anyone on Wall Street who doesn’t speak of Obama as if he were an unholy hybrid of Bernie Sanders and Eldridge Cleaver. One night not long ago, over dinner with ten executives in the finance industry, I heard the president described as “hostile to business,” “anti-wealth,” and “anti-capitalism”; as a “redistributionist,” a “vilifier,” and a “thug.”…
[…]
__
As summer turned to fall, Goldman, JPMorgan, and the rest began furiously lobbying against the White House’s financial-reform bill as it moved through the House, and in particular against Obama’s proposal for a new consumer-protection agency. (In the first three quarters of the year, the industry spent $344 million on its efforts to soften the legislation.) Dimon, despite his frequent invitations to the White House, began complaining about a lack of access. “If you don’t want us to lobby, give us a seat at the table” became his mantra, punctuated with complaints about the paucity of people inside the administration with a Wall Street background. In September, he and Blankfein were conspicuous no-shows when Obama delivered a major speech on financial reform at Federal Hall—an absence interpreted by the industry and the White House as a signal of their growing displeasure.
__
Considering the lengths to which the administration had just gone to rescue Wall Street from collapse, all this behavior might strike a (rational) person as ungrateful and even churlish. One explanation for it revolves around the industry’s endemic twin defects: short-termitis and amnesia. “Wall Street is focused on the next five minutes or the last five minutes,” says Roger Altman, a deputy Treasury secretary under Clinton and now chairman of the boutique investment bank Evercore Partners. “At the end of Obama’s speech at Federal Hall, he said that this community must remember the debt it owes to the taxpayers. But I’m not sure most of Wall Street does remember.”
__
Another, not inconsistent, theory is that the money changers aren’t merely forgetful but mildly deluded. “They’ve created a narrative where irrational actions by a few people plus the nature of government intervention forced them to do things inconsistent with their free-market philosophy and regular way of handling their business,” offers a Democratic financier. “So, yes, they took the TARP money, but only because they had to. None of them are sitting there saying to themselves, ‘You know, I was responsible for this crisis. Therefore, I’m really grateful to the government that it stepped in.’ This is not the narrative they have in their heads.”
__
But one of the city’s most successful hedge-fund hotshots offers a different surmise: “The majority of Wall Street thinks, ‘Hey, you lent us money. We did a trade. We paid you back. When you had me down, you could have crushed me, you could have done whatever you wanted. You didn’t do it! So stop your bitching and stop telling me I owe you, because I already paid you everything! The fact that I’m making money now is because I’m smarter than you!’ I think that’s where you’ve got this massive disconnect. In simple human terms, the government is saying, ‘I saved your life, and all you did was thank me once. You should be calling me every day… ’ The guy who saved the life expects more. And the guy whose life is saved says, ‘I already thanked you!’ ”
__
Obama could be forgiven for expecting greater reciprocity from the bankers—something more than the equivalent of a Hallmark card and a box of penny candy. He had, after all, done more than saved their lives directly by continuing the bailout policies formulated by Paulson and Geithner. He and his team could credibly claim to have kept the world economy from falling off a cliff. Yet with the unemployment rate still near double digits, Obama had (and still has) received scant credit from the public for what was arguably his signal accomplishment. At the same time, the one thing that almost every slice of the electorate would have applauded wildly—the sight of the president landing a few haymakers on Wall Street’s collective jaw—was an opportunity that the president had largely forsworn…

I think Mr. Krugman has the best advice for dealing with the Wall Street WATBs he labels “The Old Enemies”

… So where does that leave the president and his party? Mr. Obama wanted to transcend partisanship. Instead, however, he finds himself very much in the position Franklin Roosevelt described in a famous 1936 speech, struggling with “the old enemies of peace — business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.”
__
And that’s not necessarily a bad thing. Roosevelt turned corporate opposition into a badge of honor: “I welcome their hatred,” he declared. It’s time for President Obama to find his inner F.D.R., and do the same.

40 replies
  1. 1
    bob h says:

    What Obama should have done is insist on no bonuses whatsoever within firms that were rescued by the government. He should have had the AG go to court to break the contracts.

  2. 2
    Napoleon says:

    What a bunch of assholes. For the first time in my life, if our government lined up a specific group of people (bankers) and shot them, I would not be totally upset about it. Those people are a cancer on this country.

  3. 3

    Wow. A bunch of people who “work” long hours whining because they got big bonuses and can safely assume they will rich for the rest of their lives because people who take a shower AFTER work instead of first thing in the morning bailed them. Hoocoodanode.

    I am personally in favor of holding a bi-weekly lottery to randomly select these ungrateful rat-bastards and start hanging from the lamp posts that line Wall Street. Put it on pay-per-view and the government would probably generate enough cash to fund a pretty decent infrastructure rebuilding program. Win-win-win.

  4. 4
    mclaren says:

    What incredible delusion among Democrats.

    Obama now has a long history of breaking every promise he ever made. And liberals expect Obama to somehow change?

    News flash: Obama isn’t going to change. We can now predict what Obama will do with meticulous accuracy — listen to what Obama promises he will do, and recognize that he will do exactly the opposite.

    Obama is currently swearing that “Wall Street needs to change,” therefore we can predict with perfect accuracy that Obama will work hard to make sure that Wall Street maintains its status quo.

    Obama has reportedly told General Petraeus “I don’t want to be visiting Walter Reed for another eight years” to comfort horribly wounded soldiers mutilated in Afghanistan. Therefore we can predict with perfect accuracy that Obama will deploy more troops and build more bases, and many more Americans will be fighting and dying pointlessly in Afghanistan eight years from now.

    Obama is reportedly angry at the oil companies and talking about changing deep water drilling laws. Therefore we can predict with perfect accuracy that Obama will move heaven and earth to make sure that all American oil companies can drill in the deepest possible water with zero regulation and zero safety requirements.

    See how simple it is?

    Take whatever Obama says and turn it around to the exact opposite. That’s what he’ll do.

    How long will it take for liberals to realize this basic fact?

    The big problem is that sane voters have no choice. They can either vote for completely unhinged fools like Rand Paul and Sarah Palin, or they can vote for a proven liar who does the exact opposite of everything he promises…and Obama knows this.

    Obama knows that while he may have betrayed every promise he ever made, at least he’s sane and not a completely clueless idiot. So the 73% of the electorate who still live in reality have no choice but to vote for him.

    This is a very bad situation. It’s what happens when one political party goes completely insane.

  5. 5
    kay says:

    and in particular against Obama’s proposal for a new consumer-protection agency.

    Interesting that this was the line in the sand for them. This is what scared them most.

    Not “complicated trades”, not exotic instruments, not what we have been told repeatedly is just two savvy actors on both sides wheeling and dealing, but ripping off ordinary retail consumers.

  6. 6
    Starfish says:

    @kay: If someone proposed that some of the trades in the more exotic products be on a regulated exchange rather than rip offs, I am sure that would upset them as well.

  7. 7
    c u n d gulag says:

    And to think I’m against capitol punishment. And I am. Except for economic criminals. The solution:
    Draw and quarter Dimon on Wall Street – he deserves going first.
    Televise the event.
    Then have a lottery of Execs for the next person to get what they deserve.
    Rinse and repeat – until they agree to give back bonuses and submit to an 80% tax. My guess is it will be either when they disembowel Dimon with a rusty, dull hacksaw, or when they tie Dimon to the 4 horses.
    We’ll even show them some mercy – something they never did for us. If they beg us to have an 80% tax, we won’t kill them for justice.

    Seriously, taxes for all, and jail for those who deserve it.

  8. 8
    Nick says:

    @mclaren: Someone left the gates open on Jane Hamsher’s farm.

  9. 9
    kay says:

    @Starfish:

    I feel as if the complexity of the instruments they created clouded this basic truth: they couldn’t have done it without offering a first mortgage to anyone with a pulse, and all of those seconds mortgages (sorry! I meant HOME EQUITY LOANS, to use the the proper deceptive marketing term) and relentlessly pushing tons and tons of high-interest credit card debt onto regular people.
    That’s where most of the money they were playing with came from. Unsophisticated actors. Ordinary people.

  10. 10
    Tyro says:

    I heard the president described as “hostile to business

    He was described that way by _finance_ executives. What would any of them know about running a business?

  11. 11
    Quiddity says:

    Well, that’s Obama for you.

    This in a Financial Times essay by historian Simon Schama on the pending (?) social upheavals that may come as a result of the economic reversal we’re experiencing:

    … you know the [economic] truth needs help from the Presidential Communicator-in-Chief. He is back on the stump, but as with the case for healthcare reform, his efforts are belated and cramped by misplaced obligations of civility.

  12. 12
    Craig Pennington says:

    In simple human terms, the government is saying, ‘I saved your life, and all you did was thank me once. You should be calling me every day… ’ The guy who saved the life expects more. And the guy whose life is saved says, ‘I already thanked you!’ ”

    It’s not about ‘thanks’ asshole. It’s about 2 things. (1) The fucking assholes who made possible the risk-hiding harmed the global economy (and the harm has not been corrected — the US is still near 10% unemployment.) The people who did that need their asses regulated. And (2) I don’t want the government to have to come back and have to save your pampered asses again! That’s not asking for a thank-you, that’s telling you to fucking grow up! Grow the fuck up, assholes.

    /rant

  13. 13
    Dr. Squid says:

    Wall Street:

    You people are lucky you haven’t been hanging from light poles. But keep it up. There’s still time.

  14. 14
    kay says:

    @Quiddity:

    Maybe, but it’s not the same time. I really like Paul Krugman, but this comparison of FDR’s bully pulpit and Obama’s is ludicrous.
    FDR didn’t have an absolute 24/7 barrage of near-constant marketing by various corporate and business entities to counter.
    It’s way, way, too easy. It would be great if it were a matter of tough speeches and a weekly radio address. It’s more difficult than that. Obama’s is one voice (admittedly powerful and big) up against an absolute onslaught of outright advertising and advertising masquerading as “news”.
    I think the FDR comparison is lazy, like the constant Katrina/9-11 comparisons. It’s too far from the truth to be at all helpful, other than as a throw-away political line.

  15. 15
    kay says:

    @Quiddity:

    Paul Krugman knows why there hasn’t been wide-spread social unrest as a result of high unemployment, in the US. It’s because FDR’s safety net was in place for Obama’s Great Depression.
    Completely ignoring unemployment insurance and food stamps and need-based housing subsidies isn’t “reality-based” thinking. FDR had a bully pulpit. He also had a very committed and interested mass of people who were starving and homeless. That tends to focus attention.

  16. 16
    aimai says:

    @kay:

    Correct, Hoover opened fire on the Bonus Marchers–FDR dealt with them too but wisely sent Eleanor to serve them coffee. The point is that the obvious corrolary today doesn’t exist. We don’t have any Bonus Marchers, enraged college students, angry homeowners out there picketing on the mall. Obama faces faked up teabaggers screaming “don’t tax the rich to save me and my family from destruction!” The populist push is a little different, this time.

    aimai

  17. 17
    Jay C says:

    Today, it’s hard to find anyone on Wall Street who doesn’t speak of Obama as if he were an unholy hybrid of Bernie Sanders and Eldridge Cleaver. One night not long ago, over dinner with ten executives in the finance industry, I heard the president described as “hostile to business,” “anti-wealth,” and “anti-capitalism”; as a “redistributionist,” a “vilifier,” and a “thug.”…

    Wow – one MORE shred of lingering “buyer’s remorse” over voting for Barack Obama — GONE!!

    Know a man by his enemies……

  18. 18
    Mike Kay says:

    Today, it’s hard to find anyone on Wall Street who doesn’t speak of Obama as if he were an unholy hybrid of Bernie Sanders and Eldridge Cleaver. One night not long ago, over dinner with ten executives in the finance industry, I heard the president described as “hostile to business,” “anti-wealth,” and “anti-capitalism”; as a “redistributionist,” a “vilifier,” and a “thug.”…

    LOL!

    On one hand the hippies on the poutosphere call Obama a corporatist, on the other hand the banksters hate Obama, calling him a consumerist. Oh, who to believe. Who to believe.

  19. 19
    Mike Kay says:

    @Jay C:

    Know a man by his enemies……

    Well said.

    But who did you originally support?

    In my estimation, the people in the blogosphere who never liked obama do so because he’s not a populist, or atleast he never adopted the red-meat populist rhetoric exemplified by the fake john Edwards (ie http://www.alternet.org/economy/67917/).

  20. 20
    chopper says:

    @kay:

    FDR didn’t have an absolute 24/7 barrage of near-constant marketing by various corporate and business entities to counter.

    yeah he did. shit, a bunch of rich businessmen got together and attempted a coup FFS.

  21. 21
    kay says:

    @aimai:

    It’s weird, because I think FDR would be pleased with how his social safety net performed.
    But that’s the very thing standing in the way of real, mass public outrage.
    The bankers win again, right? We’re essentially subsidizing their latest excess, and insulating them, by feeding people.

  22. 22
    WereBear says:

    @kay: Yes, but I, for one, can’t be Robespierre, feeding the blade with innocents and rationalizing the Greatest Good for the Greatest Number.

    I wonder, though, if that effect has not lingered, and created a France which has been agitated, through the years, into what is now a really comfy country, by all accounts, and one which still reveres art and intellectual accomplishments and really great coffee.

  23. 23
    kay says:

    @WereBear:

    Me neither. Still, the situation with food stamps gets a little complicated. A lot of low income workers are eligible, and have been eligible. They’re more eligible now, of course, because they’re unemployed, but they weren’t really making it on the wages they were getting prior to the Great Crash.
    Great, they’re working and they need the assistance, good so far.
    Except: in a very real sense, we’re subsidizing low wages. We’re feeding a low wage workforce. There’s no social unrest, because, although those workers are not “feeding their families” (they can’t really afford to), are not “making it” on the wages they’re paid, the feds pick up the difference, in food stamps. It absolutely benefits the families, but who else does it benefit? The businesses who rely on low wage workers, right?

  24. 24
    liberal says:

    @Mike Kay:

    On one hand the hippies on the poutosphere call Obama a corporatist, on the other hand the banksters hate Obama, calling him a consumerist. Oh, who to believe. Who to believe.

    Yeah, that’s a real hard one. /snark

  25. 25
    liberal says:

    @Mike Kay:
    Blow it out your ass. I supported Obama originally, gave him big $ in the primaries, and felt even before I gave him money he was too far to the right. He was the best of a mediocre field.

  26. 26
    Jim, Once says:

    @kay:

    Except: in a very real sense, we’re subsidizing low wages. We’re feeding a low wage workforce. There’s no social unrest, because, although those workers are not “feeding their families” (they can’t really afford to), are not “making it” on the wages they’re paid, the feds pick up the difference, in food stamps. It absolutely benefits the families, but who else does it benefit? The businesses who rely on low wage workers, right?

    Exactly. And I do not understand why these businesses can’t see it for what it really is – by far the greater economic benefit is for them than for the people receiving food stamps, et al.

    Slightly OT, but speaking of benefits – our son, who is IT director for a small public school district, recently applied for and received S-CHIP coverage for his children. It isn’t just the unemployed and minimum wage workers who are struggling – a startling number of the educated, employed middle class is finding it needs the kind of assistance they never thought they’d have to accept.

  27. 27
    sparky says:

    @mclaren:

    The big problem is that sane voters have no choice. They can either vote for completely unhinged fools like Rand Paul and Sarah Palin, or they can vote for a proven liar who does the exact opposite of everything he promises…and Obama knows this.
    Obama knows that while he may have betrayed every promise he ever made, at least he’s sane and not a completely clueless idiot. So the 73% of the electorate who still live in reality have no choice but to vote for him.

    basically yes, though it’s not exactly fair to say every promise. but most of them, and certainly most of the inferences he wanted people to draw from them. interesting to discover that “change” = more of the same but with different rhetoric.

    i suppose it’s to be expected that after 50 years of vilification there’s no organized (or even loud) noise on the left, except in blogostan. and it is odd that so many people believe themselves compelled to defend Obama, whatever he does.

  28. 28
    El Cid says:

    I don’t think too many people in FDR’s time were under 24/7 attack, but, then, almost no one received 24/7 news.

    However, he did have a section of the corporate community, embodied by the National Association of Manufacturers and right wing media and anti-labor and anti-Red groups (Liberty) screaming on every media available, their newspapers, their magazines, their local chapters, even the new radio stations popping up around the country, at how Roosevelt’s policies would lead to Commyoonism, the state takeover of capitalism, race-mixing, and the like.

    Much of this changed later in the New Deal, for the NAM in 1936, after the “failure” of the National Recovery Act and the pressure of other gigantic private corporations and super-rich individuals & families sensibly grasping their likely rough futures if the state didn’t come to the aid of so many hurt workers in the name of capitalist stability.

    (I say “failure” because, like FDR’s “court packing” attempt at changing the Supreme Court, after the “failure”, both industry and the Supreme Court were much, much less defiant of the administration, so, “failed” or not, the efforts were coincidentally followed by a more tamed the opposition.)

  29. 29
    kay says:

    @Jim, Once:

    Slightly OT, but speaking of benefits – our son, who is IT director for a small public school district, recently applied for and received S-CHIP coverage for his children.

    I’m actually glad to hear that, because I was really involved with trying to get S-CHIP passed at the local level. I see the effects all the time in the course of my work, because those are the families I deal with. People just want their kids covered. They themselves will roll the dice, but they want their kids covered.
    Too, there was this general feeling among much more committed and informed “health care activists” than me that S-CHIP would eventually lead to single payer, or some kind of sanity in health care, which, of course, was why the Right fought like hell to kill it.
    The idea was that middle class people would conclude that this “gubmint-run” health care was a pretty good thing, and wonder why they didn’t have it. For a long time I was in the camp that thought the best way to reform the whole system was piece-meal: just keep adding people to single-payer.
    Ya know, like no one would notice Our Grand Plan, and by the time they did, everyone would have single payer, and no one would want to go back to the old way.
    A stealth health care reform deal :)
    A critical mass, convinced.
    I’m still not convinced it wouldn’t have worked, but it takes a lot of patience and commitment. You have to think in decades.

  30. 30
    kay says:

    @Jim, Once:

    Exactly. And I do not understand why these businesses can’t see it for what it really is – by far the greater economic benefit is for them than for the people receiving food stamps, et al

    I think businesses do see it. There’s a family budget. If food costs for low wage workers are subsidized by a federal program, and they are, wages can remain low, the food is still being purchased, so there’s no loss to that sector, and that frees up the family funds of law wage workers for other consumer purchases.
    Keeping the great wheel of “free markets” greased :)
    Money moves around, right?

  31. 31
    WereBear says:

    @Jim, Once: And I do not understand why these businesses can’t see it for what it really is – by far the greater economic benefit is for them than for the people receiving food stamps, et al.

    But you are not factoring in the buck naked greed involved. They don’t want more profits; they want all profits. They don’t want spend to make; they want to make without spending.

  32. 32
    Jim, Once says:

    @WereBear:

    But you are not factoring in the buck naked greed involved. They don’t want more profits; they want all profits.

    (Slaps forehead.) Duh. Of course. I’m such an idiot sometimes (most times).

  33. 33
    Mike Kay says:

    @liberal: so why didn’t you support edwards or kuchnich if you thought obama was too far right?

  34. 34
    Mike Kay says:

    sox

  35. 35
    Jim, Once says:

    @kay:

    I’m actually glad to hear that, because I was really involved with trying to get S-CHIP passed at the local level.

    Well done, kay. It’s a godsend for our son and his family. Interesting about the “stealth” program aspect. I don’t think something like that is needed, though, to eventually convince even my right wing in-laws. Once HCA (?) kicks in, it’s going to quickly be looked at as Medicare and Social Security are now, by the vast majority of the public..

  36. 36

    @mclaren

    Shorter mclaren.

    If you want a picture of the future, imagine Obama’s boot stamping on a human face— forever. …

  37. 37
    D.R. Marvel says:

    Obama should “find his inner FDR”?

    Really, Prof. Krugman…I may never stop laughing…

  38. 38
    Quiddity says:

    @kay: I think one key difference between FDR’s situation and Obama’s is one of timing. The financial collapse ran for 3 years under Hoover before FDR took office, so the bad guys were already known by the public. But the collapse happened very late in Bush’s term, blurring the sense of who was responsible. Still, I think Obama could have done better in terms of verbally spanking Wall Street.

  39. 39
    jefft452 says:

    “I, for one, can’t be Robespierre, feeding the blade with innocents and rationalizing the Greatest Good for the Greatest Number”

    What “innocents”?
    and dont say Lavoisier, he was a god damed tax farmer

  40. 40
    handy says:

    @jefft452:

    Citoyen Louis Capet, n’est-ce pas?

Comments are closed.