Does Obama Really Work For Wall Street?

[SlowDownFast]

Does Obama Really Work For Wall Street?

Henry Blodget|Apr. 10, 2009

So far, we've laid the Obama administration's decision to keep propping up failed banks at Tim Geithner's feet. Geithner's boss, meanwhile, has so far avoided blame. We wonder how long that will last.

* First, it was the administration's ongoing insistence (via Geithner) that this is a liquidity crisis, not a credit crisis--the Wall Street view.
* Then it was the failure to do anything more than express "anger" at the AIG bonuses.
* Then it was Geithner's plan to, yet again, bail out banks at taxpayer expense.
* Then it was the administration's decision to force GM into bankruptcy, fire its CEO, and hit its bondholders--setting up a bizarre double-standard with Wall Street.
* Then it was a "stress test" for banks in which the baseline scenario has already been eclipsed by the deterioration of the economy--once again slamming the administration's credibility
* Then it was the revelation that Larry Summers made $5+ million from Wall Street last year, which added to the perception that he, Geithner, Rahm Emmanuel, etc. are reluctant to bite the hands that feed them.
* Now it is the leaked announcement that "all banks have passed the stress test!", combined with a refusal to share the results of that stress test on a bank-by-bank basis.

Obama has never explained why he's acting so out of character here, so we have to speculate. The charitable explanation is that Tim Geithner is paralyzed by fear of triggering another post-Lehman credit meltdown and has convinced Obama that that's what will happen if the government holds banks and their bondholders accountable or just comes clean about the shape that banks are in.

As we've said, we disagree with this No one is arguing for the sort of uncontrolled bankruptcy that Lehman went through. And the seizure, restructuring, and sale of a few major institutions should not be unmanageable, especially if the bondholders are required to pick up the tab.

The more disturbing explanation, meanwhile, is that the Obama administration really is in Wall Street's hip pocket. Jonathan Weil at Bloomberg thinks there's a chance this is the case. And Obama certainly isn't doing anything to discourage this.

By maintaining a double-standard and refusing to address the elephant in the room, Obama is risking his credibility and his reputation for telling it like it is. This behavior, both toward the banks and toward Americans, is a disturbing echo of the Bush administration. It's time for Obama to address it head on.

http://www.businessinsider.com/henry-blodget-is-obama-in-wall-streets-pocket-2009-4

[stillcool]

1. Yes. He works for American Business Interests...

and the American people...of course business comes first. Nothing personal..it's just business. I think I learned in Grade School that the purpose of government is to balance the needs of society with the needs of business. I guess that was a different time and place, and it no longer is the case.

[reggie the dog]

14. I think they brainwashed you in grade school

caring about business first is what the right wing does here in France. The left, even the mainstream left, cares about people first as does the centrist Movement Démocratique. Let the Republicans worry about business and the rich first. The Democrats need to start putting the American people ahead of business.

[stillcool]

18. Really? What happens to a society..

that has no economy, where businesses can not survive? Well, we're seeing that now. No balance for a very long time.

[reggie the dog]

26. see, even in a system in which the social services are gutted

because taxes have been slashed businesses cannot survive. Here in France we have our welfare state to make sure that everyone is looked after and we have a regulated market economy. Life is livable and business is, in general, profitable.

[babylonsister]

2. Does Blodget? Not anymore, according to this...

http://www.nytimes.com/2009/04/12/business/media/12media.html?ref=business

snip//

So far during this financial crisis, the cathartic moment has been Jon Stewart’s deft evisceration of Jim Cramer, on “The Daily Show” last month. But again, followers of the financial press could only roll their eyes. Critics have been hammering Mr. Cramer ever since he unveiled his Ozzy Osbourne routine on “Mad Money” a little over four years ago.

In January 2006, the New York Times columnist Joe Nocera put it bluntly in an interview with NPR: “The people who are watching this and following the advice are fools.”

A year or so later, Henry Blodget, the former analyst who was banned from the securities industry after privately criticizing stocks he extolled in public — but has reinvented himself as a financial journalist — pointed out that Mr. Cramer’s portfolio was losing money even in a fabulous bull market. That’s what made smart financial folks snigger when Mr. Stewart stared at Mr. Cramer from across his desk and shouted, “You knew!”

[Uzybone]

3. nice find

anyone who criticizes Obama suddenly has credibility amongst some.

[blondeatlast]

5. Very interesting. I always wonder about the source of such hyperbolic headlines.

I smelled a rat with this OP, now I know why.

[ProSense]

7. Ah,

the sweet smell of hypocrisy.

[INdemo]

4. He found out just how powerful the banks and Wall St are

The reason for the appointments of Geithner and Summers..They are Wall St. insiders.
When he deals with the health care issues he will find that insurance companies and drug companies are also too powerful to allow any real reform so the health care reform issue is just talk and thats as far as it will go.

[stillcool]

6. What do you think about the single-payer..

bills that are now in Congress?

[reggie the dog]

15. the idea tha the companies are more powerful than the American people is a myth

Obama has the entire US military at his disposal as well as the FBI CIA the IRS and many other federal agencies. The USA needs to tell big business to fuck off, as they did in the thirties.

[blondeatlast]

8. Specious source, I refer you to links in post #2. nt

[SlowDownFast]

9. Here's a different article (different author) with a similar perspective:

Obama Stakes His Fortunes on Failed Banksters: Jonathan Weil

Commentary by Jonathan Weil

April 9 (Bloomberg) -- Now that we have a rough idea how President Barack Obama and his lieutenants plan to prop up insolvent financial institutions using taxpayers’ money, we’re left with a more difficult question: Why?

Why doesn’t the Obama administration force insolvent banks and insurance companies to come clean about their losses first? It’s the “why” that’s so vexing. The who, what, when, and how are mere details, by comparison.

More than anyone else’s, it should be in Obama’s political self-interest to accelerate the worst of the financial crisis and get as much of the inevitable pain behind us as quickly as possible. Every day he waits is one less day he will have between the time we hit rock bottom and the next election. And yet, Obama and his minions are doing all they can to delay the reckoning, which only will make it worse.

When publicly owned companies change management, often the smartest thing a new chief executive officer can do is clear the decks and take a “big bath” charge to earnings. In other words, the company writes off all its worthless assets and reports huge losses, pushing every conceivable drop of red ink into the past. The new CEO gets to blame his predecessor’s dumb mistakes. The company gets a fresh start with the investing public.

Obama could have taken the same approach with the banks the moment he took office, while he still had standing to blame the financial crisis on George W. Bush’s administration, stupid regulators, and corrupt lawmakers -- that is, everyone but himself.

read more:
http://www.bloomberg.com/apps/news?pid=20601039&sid=aNMQDysdnKRc&refer=columnist_weil

[blondeatlast]

10. Yeah, from Bloomberg. No agenda there. Sorry; in this case, I'll go with the

Gray Lady.

[SlowDownFast]

12. So now Bloomberg has it out for Obama?

What is this Bloomberg "agenda" you speak of?

You mean just because they are a financial news network that they automatically have no credibility?

Put down the Kool Aid.

[blondeatlast]

13. All I said is that I prefer to get my news from the Gray Lady.

And yes, I think Bloomberg would love to discredit Obama. Your opinion may differ.

[reggie the dog]

16. Bloomberg is a centrist Republican

Obama is a centrist Democrat, there is not a hell of a lot of difference between the two. Why would Bloomberg have it out for Obama anyway?

[TheKentuckian]

11. Duh...He's the President of The United States of America...aka The CEO of PaxAmericana Corp

I like having one that is at least partially also answerable and responsive to the people as well.

[reggie the dog]

17. The American left is farther to the right than the French right

[leftofthedial]

19. if "owned by" = "works for"

then yes.

[Tierra_y_Libertad]

20. "It's just business." Vito Corleone

[jpak]

21. Yes - and he's the Antichrist too

WTF

[geek tragedy]

22. Blodget was banned from Wall Street for being unethical.

Think about that.

[Kip Humphrey]

23. Someone needs to show me the history of Obama being bought and paid for by anyone.

In following and watching Obama since his Harvard days, I haven't seen this. Is this some kind of instant subjugation, put money in the vending machine and out pops "hip pocket Obama"? Are people so compromised in their own integrity that they can't imagine someone who has demonstrated a consistently high level of personal integrity over years and years retaining that integrity for more than 20 minutes as president? Get a grip, people!

I don't agree with Obama's approach to the current banking crisis because I don't want the business plans and business models of the likes of Goldman Sachs, JP Morgan, AIG, and Bank of America to be salvaged with the possibility (nay, probability) of regaining viability in our future. These paragons of bandit capitalism need to be dissolved, dissolved in an orderly way that protects the general populous and general economy to the extent possible, but dissolved nonetheless.

That is my disagreement with Obama, not an indication of Obama's lack of integrity.

One final gripe, while I have your attention: I am really quite tired of people from both sides of the political spectrum issuing condemnations of Obama, his actions and inactions, while neglecting to provide well thought out alternative plans for moving to a different state or conclusion. There seems to be a severe paucity of CONSTRUCTIVE criticism both here on DU and from the Reich wing. Griping and complaining is certainly everyone's right but, for me, its quite tiring.

I suggest we DUers examine ourselves in this light and consider developing a constructive dialog centered on moving from where we are to where we want to be. We want out of Afghanistan? OK, HOW do we accomplish it with positive outcomes? We want to stop bailing out the banks? OK, HOW do we salvage our economy, peoples' life savings, pensions, etc., and develop a new economic paradigm (and WHAT exactly is that paradigm?)? We want an end to globalization, corporatism, etc., etc., etc.. What are the alternatives and how are they accomplished? These are the questions that need to be comprehensively addressed and set forth, and I would like to see DU play a constructive role in such dialog. I think you get the point.

Thanks for paying attention.

[TBF]

24. OK, here is your info:

http://www.opensecrets.org/pres08/contrib.php?cycle=2008&cid=N00009638

Goldman Sachs #2 in campaign contributions.

[Name removed]

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