Why Obama Is (Finally) Taking on Wall Street --- Robert Reich

[kentuck]

<snip>
President Obama is now, finally, getting tough on Wall Street. Today he's giving his support to two measures critically important for making sure the Street doesn't relapse into another financial crisis: (1) separating the functions of investment banking from commercial banking (basically, resurrecting the Depression-era Glass-Steagall Act) so investment banks can't gamble with insured commercial deposits, and (2) giving regulatory authorities power to limit the size of big banks so they don't become "too big to fail," as antitrust laws do with every other capitalist entity. A few days ago the White House demanded that the biggest banks repay the $120 billion or so still owed the government from the bailout.

All good, all correct, all important. The president deserves at least two cheers. Why not three? It took him over a year to finally get here. The House has already completed its work on financial reform and may be reluctant to start over. The Senate is in disarray since Chris Dodd, chair of the Banking Committee, announced recently he wouldn't seek reelection, and is poised to compromise with Wall Street on a number of big issues. Neither chamber has shown any interest whatsoever in resurrecting Glass-Steagall or limiting the size and risk of big banks. In other words, much of the game is over.

<snip>
Larry Summers and Tim Geithner scuttled Paul Volcker's plan to separate the banks' commercial and investment functions, and didn't want to limit the size of banks or the risks they could take on. Summers and Geithner have wanted to get the banks back to profitability as soon as possible. And Democrats in Congress have had no stomach to take on Wall Street, a major source of campaign funding.

But suddenly the winds are blowing in a different direction over the Potomac. The 2010 midterms are getting closer, and the Democrats are scared. Their polls are plummeting. The upsurge in mad-as-hell populism requires that Democrats become indignant on behalf of Americans, and indignation is meaningless without a target. They can't target big government because Republicans do that one better, especially when they're out of power. So what's the alternative? Wall Street.


...more


http://www.huffingtonpost.com/robert-reich/why-obama-is-finally-taki_b_432841.html



.

[sandnsea]

1. Yesterday's announcement was planned for weeks

Way back in December when Martha was doing great. This is pure shit, and I like Robert Reich.

[kentuck]

2. "Planned for weeks"?

Do you have a link or article about that?

[Pirate Smile]

7. This stuff started in October, more action in December until it was rolled out yesterday.

It is not like it just appeared magically yesterday. They don't move that fast.

That was what the article I read stated. I'll have to look. It was either in the NYT or WSJ.

[sandnsea]

11. Of course it was

My god. Talk about revisionists.

http://www.whitehouse.gov/issues/economy/financial-reform

[Political Heretic]

12. Hey genius, none of that was about splitting commercial and investment banks.

That's what the hoopla is about today.

[sandnsea]

16. Right. Nobody in the White House discussed it until yesterday.

Whatever. And you think you're the genius.

:crazy:

[Political Heretic]

17. Actually Volker discussed it, and Giethner and Summers opposed it

And it was not part of any "reform" package being proposed by the White House until Obama change direction and rolled out Volker instead of Giethner or Summers for the FIRST TIME and backed his recommendation for the FIRST TIME

[sandnsea]

24. There has only been discussion

http://compliancex.typepad.com/compliancex/2009/12/us-senators-propose-reinstating-glass-steagall-act.html

[Political Heretic]

27. That's Congress, not the White House.

[gateley]

5. It still took too long. And even if he's right in that they pulled it out of the

hat because of the mid-terms, I'll take it.

You can't help but almost automatically assume such moves are made for political reasons. :shrug:

Again, I'm just glad it's being done at all.

[sandnsea]

8. Bullshit. Edit Link posted.

This has been planned for a long time now. I will post the articles. The only way someone would conclude it's political is if THEY WANT TO. This political pivoting bullshit came from the lefty blogs yesterday. It's just more Obama bashing crap. And if you want readership on the internet, if you're not in lockstep with some extremist group or other, you don't get any. Believe me.

ON EDIT:

http://www.whitehouse.gov/issues/economy/financial-reform

[gateley]

I'm not disagreeing with you -- WTF are you jumping down my throat for?

I was merely saying that when there's a move, it's natural for the populace to question whether the motive is political. That's all. Perhaps I should have put in caps IN GENERAL so you didn't knee jerk react and think I was bashing Obama. That's all. Jeez. :eyes;

So, to recap my intent:

1. I think this took too long - I wish it would have happened sooner.

2. One becomes jaded and has to wonder if moves are politically motivated.

3. Even IF IT HAD BEEN DECIDED as a result of Brown, I'm happy it's happening at all.

Leave me alone.

[sandnsea]

13. And then one wonders why we lose elections

When one just lets bullshit sit out there as the truth.

NO. One who pays attention to politics on a daily basis, (as someone like Robert Reich does, and as the lefty bloggers do who started this rumor), should not wonder whether financial reform that had been in the works for weeks is "political". They know better. It's a LIE. And you should care that the public is being lied to.

[Political Heretic]

15. Because people like you - edit.. I'm sorry, your the first thing I saw after not sleeping all night

I hurt, I'm exhausted, it was an awful night.

And the first thing I see is you flipping out writing angry and insulting posts for no reason.

Look, I don't see this as some point for trashing Obama, and I don't even see the OP as particularly inflammatory.

It's fairly clear, to anyone paying attention, that with the shift from trotting out Giether on economic policy - who is on the record opposing this NEW idea - and instead trotting out Volker, whos ideas have NOT previously been part of reform efforts, and whose ideas about recrating the divide between banks were rejected up until this point... that something has changed.

That's great! Yay team Obama! Woo hoo! It's the right thing to do. But we can also politically recognize that the administration realizes the need to create a narrative, to give the American people somewhere to focus their anger OTHER than the administration. It makes sense, its smart, and we should all be glad that this change or "modification" in direction has come.

It's not something to get all freaking combative about.

[still_one]

19. Yes it has, and what he announced yesterday was just part of what was being

worked on. Bloomberg had one of the Democratic representatives talking about how this had been coming together for months, and how he was really pushing it and working with Volker

Unfortunately, I can't remember his name

[gateley]

23. It's ME who always at first questions "what's the motive?" -- kind of like

"follow the money". If Reich didn't know that this has been in the works, it would be an understandable assumption.

(I don't know if he was aware of the talks/planning or not -- I didn't read the article because I don't agree with Reich on this.)

And I DO care when the public is lied to -- but I'm not sure Reich is intenionaly lying. It may just be his opinion/reaction -- and opinions are only that. The truth will out -- I believe that. So again, I'm just glad this step has been taken. And I applaud Obama for taking it.

[sandnsea]

25. Sorry I snapped at you

You're certainly entitled to approach politics any way you want, no question about that.

[gateley]

33. And I'm sorry I snapped back. I understand your point -- totally. nt

[Political Heretic]

14. They did NOT plan to support splitting commercial and investment banks.

Volker's ideas were scrapped in favor of the recommendations of Giethner and Summers. That's what's changed, and there's a reason it's changed.

[sandnsea]

18. That is not the ONLY part of the changes

And there is nothing to indicate that Obama wasn't listening to ALL the advise given all along, just like he did with Afghanistan. That's the way he operates.

[Political Heretic]

20. That's the ONLY part of the changes that is being talking about as the dramatic shift

Because it is a dramatic shift.

[TxRider]

26. They have been planning this for some time

And working for international support agreements.

Which they just got.


Tories back Obama banking crackdown

http://www.independent.co.uk/news/uk/politics/tories-back-obama-banking-crackdown-1875767.html

[Political Heretic]

29. That's just simply not true.

The specific, single issue, that if splitting commercial and investment banks - basically reinstating glass-steigall, was (and is) opposed by Tim Giethner, Larry Summers and the crew that has been spearheading economic policy for the administration.

Paul Volker has been outspoken in championing this direction for some time, but his views were rebuffed by Tim, Larry and those who were taking the lead on this.

The Obama administration was conspicuously non-committal to Congress when the Senate made noises about wanting to do this split. And sources in the administration were regularly reporting on the fact that Volker was being shut out of the direction on economy in favor of Giethner.

This is not a secret to anyone. It's not even controversial.

What's new is the shift from Giethner to Volker. For the first time, it was Paul Volker standing behind the President when he announced what Volker had been pleading for since the President took office, while Giethner was left to go on the record voicing his DISAGREEMENT with the proposal, saying he has "serious reservations" about that plan - not even willing to back his own president.

That's pretty clear indication to anyone paying attention of a SHIFT behind the scenes in the administration.

Now, we can all speculate what has prompted this shift. I think it doesn't take a rocket scientist to guess that the administration believes it needs to prove the the American people that it can bring change and get substantial things done, as well as needed to give the American people a target for their angry that isn't the White House or Democrats in Congress. Wall Street works. And we will hopefully benefit from some good much needed policy because of it.

[CreekDog]

22. Yes it was planned for weeks --but no plan for what to do if they lost one Senator's vote on HCR

which is what happened.

no plan. signature issue.

unbelievable.

so while i like the new financial stuff here, i feel it's like whistling past the graveyard.

[begin_within]

3. Well, whatever it takes, as long as they get off their asses and do something good.

[Cant trust em]

4. Whatever the reasoning is, I'm just glad that he's starting to take a tougher stance. nt

[ProgressIn2008]

6. It's up to this admin to prove that this isn't more than midterm election posturing

We'll see, not one cheer until we see. "The 2010 midterms are getting closer, and the Democrats are scared." Indeed.

[Rapanui1]

9. Obama is still on the corporacation

Obama is still on the corporacation. Talking BS does not equate that he's tough on Banks

[still_one]

21. This was started months ago with financial reforms in Congress

http://www.politico.com/news/stories/1209/30497.html

[Political Heretic]

30. "This" was not started months ago.

The White House didn't back the calls of congress to reinstate glass-stiegall, with Robert Gibbs refusing to comment when asked.

They supported other reforms being talked about and rolled out, most of them minor, a few major (that are now in doubt by the way, like the Consumer Financial Protection Agency, which Dodd is trying to drop).

Tim Giethner and Larry summers opposed splitting banks, and Volker who supported doing it was shut out of things up until this point.

The change that people are discussing is NOT suggesting that the administration never talked about any wall street reform ever until now. The change people are discussing is the fact that the administration previously publicly non-committal and privately opposed to splitting banks (when I say private, I only mean not in an official press statement, though Giethner and Summers are both on the record opposing it) is now publicly committing to restoring glass-stiegall by splitting banks....

...by the way, Tim Giethner has already given his quotes to the press saying he has "serious reservations" about the Presidents proposal. He's actually going on the record failing to back his own administration's policy. That and the fact that it was Volker, and not Giethner who was standing behind the president for the FIRST TIME is more than enough to suggest that there has been something of a sea change within the administration and a decision to turn toward even more aggressive wall street reform (that doesn't imply that they were never pushing any reform, only suggests that they have made a decision to ramp that up, not down).

[Douglas Carpenter]

10. kick and recommend - very interesting analysis!

[TxRider]

28. Tories back Obama banking crackdown, this has been in the works for a while

You don't get prearranged international announcements like this overnight.

Obama has obviously been doing some real work behind the scenes.

http://www.independent.co.uk/news/uk/politics/tories-back-obama-banking-crackdown-1875767.html

[Political Heretic]

31. "This" was not started months ago

"THIS" refers to splitting banks, an approach NOT supported by Giethner or Summers, and on which the White House would never endorse even when Congress suggested it....

I say again, the White House didn't back the calls of congress to reinstate glass-stiegall, with Robert Gibbs refusing to comment when asked. And Giethner and Summers publicly opposed it, and reports from all over near unanimously suggesting that Volker was being shut out of the process.

They supported other reforms being talked about and rolled out, most of them minor, a few major (that are now in doubt by the way, like the Consumer Financial Protection Agency, which Dodd is trying to drop).

Tim Giethner and Larry summers opposed splitting banks, and Volker who supported doing it was shut out of things up until this point.

The change that people are discussing is NOT suggesting that the administration never talked about any wall street reform ever until now. The change people are discussing is the fact that the administration previously publicly non-committal and privately opposed to splitting banks (when I say private, I only mean not in an official press statement, though Giethner and Summers are both on the record opposing it) is now publicly committing to restoring glass-stiegall by splitting banks....

...by the way, Tim Giethner has already given his quotes to the press saying he has "serious reservations" about the Presidents proposal. He's actually going on the record failing to back his own administration's policy. That and the fact that it was Volker, and not Giethner who was standing behind the president for the FIRST TIME is more than enough to suggest that there has been something of a sea change within the administration and a decision to turn toward even more aggressive wall street reform (that doesn't imply that they were never pushing any reform, only suggests that they have made a decision to ramp that up, not down).

[Political Heretic]

32. It's interesting to watch the brigade of people come into this thread with the same talking point

"this is nothing new, Obama's always been doing this."

Why even make that claim? I mean first, its untrue - splitting banks has not been part of the reform policy pushed by this administration, until now, and it represents a clear change, since Giethner and Summers were on the record opposing the idea, and Volker was being aced out of the process - until now, when its Volker and not Giethner standing behind the president, with Geithner left to go call up reporters and give his statement that he has "serious reservations" about his own administrations plan. How messed up is that?

What I don't get is why this group of "action-alert" obama supporters feel the need to come die on this hill? It's great that the administration is doing this. That's not diminished by understanding the politics behind it. What's there to argue? What's the point?

People trying to pretend like there's been not marked shift toward an even more aggressive populist stance in response to political realities "on the ground" has a really, really, really hard sell ahead of them.

[Political Heretic]

34. "SPURNING OBAMA, McCain and Cantwell propose resurrecting Glass-Steagall to break up Wall Street."

Obama administration officials have dismissed the idea that the financial sector should or can be changed in more fundamental ways than they are now proposing. You can't turn back the clock, they say, and the new requirements they plan to impose on big banks to hold more capital in reserve, put up $150 billion for a rainy-day rescue fund, and disclose more of their risky trades should be enough to keep the financial sector from imploding again. Many of these requirements, among others, are contained in two giant bills making their way through Congress—one that passed the House last week and another that will be debated in the Senate in the new year. "I think going back to Glass-Steagall would be like going back to the Walkman," says one senior Treasury official.

http://www.newsweek.com/id/226938