Wall Street Wants a Refund
February 10, 2010Robert Scheer is the editor of Truthdig, where this article originally appeared. His latest book is The Pornography of Power: How Defense Hawks Hijacked 9/11 and Weakened America (Twelve).
"Buyer's remorse" is the way Sen. John Cornyn, the Senate Republicans' fundraiser, gleefully refers to Wall Street moguls' current disenchantment with the U.S. president they thought they had bought. They didn't like it when Barack Obama, after a year of throwing trillions of American taxpayer dollars into the bailout sinkhole, dared remark that he had hoped there might be some return for ordinary folks trying to save their jobs and homes. Not just huge bonuses for the folks the president dared refer to as "fat cats."
"That's it!" the moguls declared, and promptly shifted their political donations from Democrats to Republicans. Among the unglued was Jamie Dimon, who, as The New York Times put it, "is a friend of President Obama's from Chicago, a frequent White House guest and a big Democratic donor." Dimon, who just gave himself a $17 million bonus for last year's work--after his bank was bailed out by taxpayers--is the chief executive of JPMorgan Chase. As the Times observed: "If the Democratic Party has a stronghold on Wall Street it is JPMorgan Chase. ... But this year Chase's political action committee is sending the Democrats a pointed message. ... [I]t has rebuffed solicitations from the national Democratic House and Senate campaign committees. Instead it gave $30,000 to their Republican counterparts." Chump change, given the hundreds of millions that Wall Street doles out to buy legislation, but a warning shot nonetheless.
Dimon had lunch with the president last month to tell him he doesn't like this talk of forcing banks like Chase to decide whether they are working for federal insured depositors or are high rollers in the Wall Street investment casino. Joining Dimon and the president was Robert Wolf, chief of the U.S. division of the Swiss-owned bank UBS. Wolf, who plays golf and watches fireworks with the president, was appointed by Obama to the Presidential Economic Recovery Advisory Board, headed by former Fed Chair Paul Volcker. Wolf was upset when Obama recently endorsed Volcker's proposal for restoring the spirit of the Glass-Steagall Act by separating investment from commercial banking, as it was for six decades of financial stability before that sensible restraint was reversed during the Clinton years.
How sensitive they are about words! It's not as if those "fat cats" are about to lose their jobs or homes or be saddled with legislation they don't want. There isn't the slightest possibility of serious financial reform now that Obama has wasted his filibuster-proof majority in the Senate by flummoxing heath care while ignoring banking reform. He has no more money to throw at the banks, so why should their lobbyists cooperate on financial reform legislation any more than the health insurance companies did on their issues?
All he has left are verbal arrows, and surely $145 billion in banking bonuses for devastating the U.S. economy supports Obama's all-too-rare rhetorical jabs at a rapacious Wall Street. How else to counter Sarah Palin and the tea-baggers who blast the big government bailouts as if they represent an Obama invention rather than a creation of the last Republican White House? Since Bill Clinton's presidency the only difference in the two parties' programs is over who best serves Wall Street and hence deserves to be more handsomely rewarded with campaign funding.
Take the mask off the Obama candidacy and there was always a deeply disturbing reality that his massive Internet-driven grass-roots contributor base concealed. Obama was the first major-party presidential candidate since Richard Nixon to base his campaign fundraising exclusively on private rather than public funds. But the appearance of all those coins flowing in from the common folk denied the harsh reality that his campaign contributions established him as the darling of Wall Street financiers--the very folks whose interests he served so faithfully during his first year in office as he endorsed, and indeed expanded, the Bush bailout.
While his base was distracted with a never very bold health care proposal, designed to mollify the insurance companies while providing at least the appearance of universal health care, Obama ceded the genuinely populist cause in the midst of a banking meltdown by coddling Wall Street. It was only a year into his administration, at a point when the banks had obviously failed to deliver on a promise to aid distressed homeowners and increase lending, that Obama in direct response to adverse poll results once again sounded the populist notes of the early months of his primary campaign.
And for that too-little-too-late response to the catastrophic economic crisis they caused, Wall Street titans will now take Obama to the woodshed to teach him and the Democrats a lesson about who's really in control.