When Barack Obama took office, it was almost embarrassing to watch so many otherwise intelligent people rejoice at the notion that he could somehow do good and remain closely allied with the corrupt Wall Street banks that had wrecked the economy during the Bush era.
Most people know better now, but what’s amazing is that this president, with a re-election fight ahead, remains as obsequious in his dealings with the Wall Street crooks as he was when he appointed Wall Street alums Larry Summers as director of the National Economic Council and Timothy Geithner as Secretary of the Treasury.
As this point, the idea of Obama reforming Wall Street has been reduced to a joke, even to Robert Reich:
Next week President Obama travels to Wall Street where he’ll demand – in light of the Street’s continuing antics since the bailout, as well as its role in watering-down the Volcker rule – that the Glass-Steagall Act be resurrected and big banks be broken up.
I’m kidding. But it would be a smart move – politically and economically.
Politically smart because Mitt Romney is almost sure to be the Republican nominee, and Romney is the poster child for the pump-and-dump mentality that’s infected the financial industry and continues to jeopardize the American economy. Romney was CEO of Bain & Company – a private-equity fund that bought up companies, fired employees to save money and boost performance, and then resold the firms at a nice markups.
Economically it would be smart for Obama to go after the Street right now because the Street’s lobbying muscle has reduced the Dodd-Frank financial reform law to a pale reflection of its former self. Dodd-Frank is rife with so many loopholes and exemptions that the largest Wall Street banks – larger by far than they were before the bailout – are back to many of their old tricks…
I doubt the President will be condemning the Street’s antics, or calling for a resurrection of Glass-Steagall and a breakup of the biggest banks. Democrats are still too dependent on the Street’s campaign money. That’s too bad. You don’t have to be an occupier of Wall Street to conclude the Street is still out of control…
And you don’t have to be a professor at Berkeley to suspect voters aren’t going to see a dime’s worth of difference between Obama’s and Romney’s attitudes toward the banks that are drastically undermining living standards for 99 percent of Americans.