"How Wall Street Rolled Obama"

[Me.]

A long read

“Barack Obama was “incredulous” at what he was hearing, said one of his top economic advisers. The president had spent his first year in office overseeing the biggest government bailout of the financial industry in American history. Together with Federal Reserve chairman Ben Bernanke, he had kept Wall Street afloat on a trillion-dollar tide of taxpayer money. But the banks were barely lending, and the economy was still mired in high unemployment. And now, in December 2009, the holiday news had started to filter out of the canyons of lower Manhattan: Wall Street’s year-end bonuses would actually be larger in 2009 than they had been in 2007, the year prior to the catastrophe. “Wait, let me get this straight,” Obama said at a White House meeting that December. “These guys are reserving record bonuses because they’re profitable, and they’re profitable only because we rescued them.” It was as if nothing had changed. Even after a Depression-size crash, the banks were not altering their behavior. The president was being perceived, more and more, as a man on the wrong side of an incendiary issue.

And so, prodded forward by Vice President Joe Biden—the product of a working-class upbringing in Scranton, Pa.—the president began to consider getting tougher on Wall Street. “We kept revisiting it,” said the economic adviser (who recounted details of the meetings only on condition of anonymity). One big proposal the White House hadn’t adopted was Paul Volcker’s idea of barring commercial banks from indulging in heavy risk taking and “proprietary” trading. In Volcker’s view, America’s major banks, which enjoy federal guarantees on their deposits, had to stop putting taxpayer money at risk by acting like hedge funds. This had become a grand passion for Volcker, a living legend renowned for crushing inflation 30 years before as Fed chairman. He had long been skeptical of financial deregulation. Beyond the ATM, Volcker asked, what new banking products had really added to economic growth? Exhibit one for this argument was derivatives, trillions of dollars in “side bets” placed by Wall Street traders. “I wish somebody would give me some shred of neutral evidence about the relationship between financial innovation recently and the growth of the economy,” he barked at one conference.

Yet for most of that first year, Obama and his economic team had largely ignored Volcker, a sometime adviser. Treasury Secretary Tim Geithner and chief economic adviser Larry Summers still questioned whether Volcker’s proposals were feasible. Now Obama was pressing them—very gingerly—to reconsider. “I’m not convinced Volcker’s not right about this,” Obama said at one meeting in the Roosevelt Room. Biden, a longtime fan of Volcker’s, bluntly piped up: “I’m quite convinced Volcker is right about this!”…cont…

http://www.newsweek.com/2010/08/29/how-obama-got-rolled-by-wall-street.html

[Angry Dragon]

1. It seems from this article that Obama should listen

to different people

[ibegurpard]

2. then why aren't they gone?

He's either clueless, powerless, or stories like this are just not true.

[onethatcares]

3. how many stories have you seen that promote him?

seriously. Do you see newspaper headlines screaming, "Obama brings the banks down", or "President Obama says, Jobs for the masses, no bonuses for asses"?

No, since day one it's been the same old shit from the corporate controlled media.

If the headlines would have appeared as above, there would have been yeehawing in the streets and the fuckers would have jumped from their high buildings.

Peace

[Me.]

5. The Proof Is In The Pudding

And Wall Street seems to be the only one dining out

[Radical Activist]

4. "says a former senior career Fed official who asked to remain anonymous"

Who? A former Bush administration appointee? Someone with a grudge against Obama?

This is an oft recycled narrative but there's way too much conjecture to accept it at face value from an unnamed source who may have their own agenda.

[Enthusiast]

7. Yeah, let's find out who it is

so we can fire them! It's only a recycled narrative because it is true.

[Radical Activist]

10. It must be true because Obama won't nominate Elizabeth Warren!

Oh...wait.

I learned to be more skeptical after the reporting leading up to the Iraq war. Suit yourself if you want to keep getting duped.

[dixiegrrrrl]

6. Sounds as if the banksters are too big to jail:

" (One problem this time around, lawyers say, is that virtually everyone was complicit in the subprime-mortgage scam.)"

Great....if your mob is big enough, you do not have to worry about the law.

[Me.]

8. That's Been True For A Long Time Now

Nixon and Raygun not to mention Bush

[Name removed]

9. Deleted message

Message removed by moderator. Click here to review the message board rules.

[chill_wind]

11. Yep. Yep.

"All of these challenges required a fundamental rethinking of the U.S. and global economy. Yet those who were most aligned with the “progressive” side of the Wall Street reform issue remained, for the most part, on the outside of the administration looking in. Among them were Brooksley Born, the former chairwoman of the Commodity Futures Trading Commission, and Nobel-winning economist Joseph Stiglitz. Summers and Geithner, by contrast, had been acolytes of Bob Rubin, the former Clinton Treasury secretary who, along with then–Fed chairman Alan Greenspan, had presided over many of the key deregulatory changes in the ’90s. And they convinced Obama that the financial system they themselves had done so much to nurture was, on the whole, fine. As long as there were greater capital reserves, leverage limits, and more regulatory oversight, Wall Street could remain intact. (Summers would continue to maintain, well after the crisis, that he had never been a full-blown advocate of deregulation; Geithner did not respond to a request to comment for this article, but previously told me that he was no creature of Wall Street and was simply doing as much as he could to constrain it.)"

We've been saying that since forever.

Summers: The wrong man.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=5389801&mesg_id=5391013

But the right Gatekeeper.