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Obama Sends Wall Streeters to “Reform School”


[ Ed. note: The following account of President Obama’s remarks on Wall Street reform yesterday are not, strictly speaking, part of Levees Not War’s usual portfolio (we do have many interests!), but then again it’s not every day that we get to personally attend a presidential address. A variant of this post appears at Daily Kos. ]

President Obama came within a few zip codes of Wall Street yesterday to speak to a gathering of prominent banking executives (including Lloyd “I’m Doing God’s Work” Blankfein of Goldman Sachs) and illustrious Empire State politicos at the fabled Great Hall of Manhattan’s Cooper Union. It was a privilege to sit in the Great Hall where over the last 150 years audiences have gathered to hear Abraham Lincoln, Frederick Douglass and other abolitionists; Susan B. Anthony and other advocates for woman suffrage; speakers for the NAACP and the American labor movement; and eight presidents including Theodore Roosevelt, Woodrow Wilson, and Bill Clinton; and another illustrious (former) congressman from Illinois: Senator Obama the presidential candidate spoke at Cooper Union on “Renewing the American Economy” in March 2008, a half year before the crash.

Among President Obama’s audience were Mayor Bloomberg, Governor Paterson, Rep. Carolyn Maloney, state attorney general Andrew Cuomo and former governor Mario Cuomo, police commissioner Raymond Kelly, the Rev. Al Sharpton, and, among the president’s advisers, Paul Volcker, Rahm Emanuel, and Valerie Jarrett. Among the Wall Street titans seated in the front rows, presumably so that they wouldn’t miss a word the President said (or so he could keep an eye on them), were top executives from Goldman Sachs, Barclays PLC, and other firms.

“Through the great banking houses of Manhattan last week ran wild-eyed alarm. Big bankers stared at one another in anger and astonishment. A bill just passed . . . would rivet upon their institutions what they considered a monstrous system . . . such a system, they felt, would not only rob them of their pride of profession but would reduce all U.S. banking to its lowest level.” Time magazine, June 1933, quoted by President Obama (to great applause)

Obama’s message was concise and focused, his tone moderate, and he sounded confident that Congress would pass the reforms, so he didn’t have to make a hard sell. His address was not confrontational, but neither was it timid. Although press accounts have said that the President was “chiding” the bankers, about the harshest thing Obama said was, “Unless your business model depends on bilking people, there is little to fear from these new rules.” Otherwise, unless anything but fawning flattery is harsh criticism, the President said nothing to antagonize the Wall Street men.

Competing with The Onion or the “Oblivious-to-Irony Review,” the New York Post’s cover showed a golden goose with a tag helpfully identifying it as “Wall Street” accompanying a front-page editorial titled “Dear Mr. President: Don’t Kill the Golden Goose: City Economy Imperiled in the Name of ‘Reform’.” The editorial bears little resemblance to the President’s actual remarks or the legislation Congress is weighing. Really, he went easy on the bankers. For a pointed counter-argument (though perhaps he doesn’t read the Post), see Paul Krugman’s column “Don’t Cry for Wall Street.”

One thing that impressed us was that President Obama’s reforms are changes that capitalists should love (you would think), for don’t business people desire stability, predictability? Isn’t that good for making budgets and projections? Doesn’t the economic system depend on consumer confidence? A phrase from the White House’s Financial Reform blog (and we’re sure chairmen Chris Dodd and Barney Frank—and FDR, for that matter—would agree) states the Democrats’ objective quite clearly:

A key test of a strong financial system is whether or not it effectively channels savings to finance future innovation. Today’s system produced waves of credit bubbles and real estate booms followed by severe financial shocks and damage. We need a financial system that is not only interested in short-term profits, but in long-term growth, entrepreneurship, and savings.

It was good that the bankers heard the audience’s standing ovation, the frequent and sustained applause, and they just may have heard our friend Citizen Reno shout out, “I love you, Mr. Volcker!” when the tall economic adviser took his seat on the front row (on the opposite side from the bankers). They heard, but did they listen?

Organizing for America is working to make sure the members of Congress hear us, and maybe the bankers will listen to the law. Maybe. Whether they do or they don’t, we’ll keep working to make sure that whatever passes from Congress to the President’s signature is not the end but a beginning of Wall Street reform and a return to prosperity that is shared by all Americans.


Obama photo courtesy of Janice Caswell

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