Policy Pivot on Banks Followed Months of Wrangling

[Jennicut]

Policy Pivot on Banks Followed Months of Wrangling
Former Fed Chairman Volcker, With Backing From Biden and Axelrod, Helped Shape Obama's Tougher Stance on Banks:

For nearly a year, President Barack Obama's economic team resisted measures to restrict the size and activities of the biggest U.S. banks. Two days after Democrats suffered a devastating election loss in Massachusetts, the White House rolled out a proposal to do just that.

The policy's evolution took months, according to congressional and administration officials. Prompted by the cajoling of former Federal Reserve Chairman Paul Volcker and other respected voices, dissenters in the administration—notably Treasury Secretary Timothy Geithner and White House economics chief Lawrence Summers—gradually dropped their opposition.

On Jan. 13, Messrs. Geithner and Summers locked down the final regulatory proposals into a memo to the president that they said was unanimous.
http://online.wsj.com/article/SB10001424052748704423204575017543560874692.html?mod=WSJ_Markets_MIDDLETopNews

Interesting tidbits:

According to Senate officials, the president had an ally beyond Mr. Volcker. One of Mr. Obama's top political advisers, David Axelrod, was also pressing to get tougher on the big banks. In addition, Vice President Joe Biden emerged as a key Volcker ally.

"Biden and Volcker are old friends," said Austan Goolsbee, a member of the White House's Council of Economic Advisers. The vice president "became a leading advocate."

And this:

Treasury officials feared headlines would blare that Mr. Geithner had backed breaking up the banks. But the president continued to endure criticism, in particular from his left, that he was coddling Wall Street. In talks with his financial team, Mr. Obama started letting his frustration show, asking why he was on the wrong side of the "too big to fail" debate.



Volcker has some big time allies in the WH and I hope the President gets it now. He has to be on correct side of the too big to fail debate to save his Presidency.

[gateley]

1. Again, I applaud Obama for listening to the voices of reason. Although this

probably took too long (a year!) he finally made the right decision.

[Jennicut]

2. He made a mistake listening to Geithner.

I think he has finally realized that. I bet Geithner does not last another year.

[gateley]

3. I initially thought Geithner wasn't even at the announcement, but I just

saw another pic showing he was. It got my hopes up that he was back at the WH packing his bags, but I guess not. If he's gone in a year, I'll be happy. If it's sooner than that, I'll be downright giddy.

I hope Obama sees quick results from this decision, and a rise in his support, and continues to listen to others.

[gateley]

4. Whoa -- I just re-read this:

"Treasury officials feared headlines would blare that Mr. Geithner had backed breaking up the banks."

Why would they fear that headline? Do they want Wall Street to feel secure with their "representatives" in the WH? :grr:

And, a hats-off to Alelrod, too!

[PatSeg]

5. K&R

[FrenchieCat]

6. K&R!

[elleng]

7. GREAT Good news!

How 'right' we've been!

:-)

[ibegurpard]

8. More of this please

:thumbsup:

[burning rain]

9. Good time for the WH to roll out this new policy.

He can talk populist to "the folks," and claim at one and the same time he can't pass anything because Democrats only have 59 votes in the Senate. "The folks" are mollified; the bankers are happy; it's a win-win.

[Impedimentus]

10. A few more tongue lashings and the big banks will be ...

... cowering in the corner of the room, frightened to death that their bonuses will only go up by 50% next year.

As for the tens of thousands of middle class and poor American families that are losing their homes,their jobs, going into bankruptcy, dying because they don't have health insurance, seeing their world fall apart, well, times are tough.

[impik]

11. The president should go back listening to his instincts

His instincts proved right again and again during the campaign and should go back listen to them. There's no reason that he'll find himself in this situation:

"In talks with his financial team, Mr. Obama started letting his frustration show, asking why he was on the wrong side of the "too big to fail" debate".