Obama changes tone towards Wall Street

posted at 10:55 am on February 10, 2010 by Ed Morrissey

My, how times have changed.  When Obama held soaring approval ratings, he liked to rail against fat-cat Wall Street executives, inciting class warfare by calling their compensation “obscene,” accusing firms of “the height of irresponsibility” and designating their bonuses as “shameful.”  Last spring, Obama warned banking-industry leaders that he was all that stood between them and the pitchforks, a not-at-all subtle demand for them to start playing ball with his intent to impose heavy regulatory burdens on their business.  Now, Jake Tapper notices that Obama has a different take on Wall Street in his interview with Bloomberg today:

Asked about the $17 million bonus given to Jamie Dimon, the CEO of JPMorgan Chase & Co., and the $9 million bonuses going to Lloyd Blankfein, CEO of the Goldman Sachs Group Inc. CEO, the president said, “I know both those guys; they are very savvy businessmen. I, like most of the American people, don’t begrudge people success or wealth. That is part of the free-market system.”

“I do think that the compensation packages that we’ve seen over the last decade at least have not matched up always to performance,” the president said — a rather serene response relative to some of his previous language on the matter.

The seeming shift in tone comes at a time that Wall Street executives have been relaying to the White House that the president needs to be more encouraging of their efforts if he expects them to be part of the solution in terms of job growth. Several business executives have told the administration that attacking businesses so vociferously doesn’t exactly help create a positive business climate.

But what about bonuses now?

In the half-hour interview with Julianna Goldman and Mike Tackett, the president expressed approval for the fact that the Dimon and Blankfein bonuses were paid in stock, thus requiring “proven performance over a certain period of time as opposed to quarterly earnings.” The president called that a “fairer way of measuring CEO success and ultimately will make the performance of American businesses better.”

It was just a few weeks ago that Obama called multi-million dollar bonuses at TARP-recipient financial institutions “obscene.”  Four months ago, he set his Pay Czar onto the task of clawing back bonuses from these same firms.  What changed?  Wall Street woke up.  Just two days ago, the New York Times reported that Obama and the Democrats had managed to make financial leaders — who had become big donors to Obama and the Democratic Party — into Republicans in one short year.

Tapper wasn’t the only one to notice this flip-flop from the President whose expiration dates have become legend.  Times columnist Nicholas Krystof tweeted his disapproval this morning:

Ouch: Obama says he doesn’t begrudge $17 m bonus on Wall St, quasi-defends bonuses. I begrudge ‘em.

Obama made the mistake of acting like a bull in a Wall Street china shop during a bear market, deliberately inflaming class warfare and making clear the Democratic antipathy towards wealth and success.  In doing so, he alienated the very people who funded his rise to power (who deserved the Captain Louis Renault award they got two days ago for doing so), pushing them by default into the ranks of his political opponents.  With his approval ratings plunging across the board now, he can’t afford to lose his campaign ATM on Wall Street.

But this path has danger for him as well, at which Kristof’s tweet hints.  Obama’s money came from Wall Street, but his energy came from the hard Left, who saw him as America’s first class-warrior President since perhaps FDR, or ever.  If he abandons that effort now, Obama and Democrats can expect a lot less energy from the Left and less money from a disillusioned Wall Street who saw him more as a pragmatist before the election.  He could get a few of the Wall Street defectors back on board with a new embrace, but he’ll lose the people who made him a political phenomenon.


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P.S. It is OK if you have to google “Horatius” P-Stool. I don’t think he was ever featured in a Marvel comic book.

A Balrog of Morgoth on February 10, 2010 at 12:01 PM

Small businesses aren’t hiring because they’re trying to protect what small profits they still are making. If you’re barely keeping in the black, its not a good time to go out and hire!

Dark-Star on February 10, 2010 at 11:55 AM

When Obama said it, he also declared that these business people were being greedy. Caring more about their profits than the needs of workers.

MarkTheGreat on February 10, 2010 at 12:04 PM

When Obama said it, he also declared that these business people were being greedy. Caring more about their profits than the needs of workers.

MarkTheGreat on February 10, 2010 at 12:04 PM

If the entire economy weren’t in danger of collapse, he just might have another stopped-clock moment.

But the national situation at hand is utterly lost on Obama.

Dark-Star on February 10, 2010 at 12:08 PM

“The expectation in Washington is that ‘We can kick you around, and you are still going to give us money,’ ” said a top official at a major Wall Street firm, speaking on the condition of anonymity for fear of alienating the White House. “We are not going to play that game anymore.”

J_Crater on February 10, 2010 at 12:16 PM

3 faces to every issue and no moral compass. Douche.

Flyboy on February 10, 2010 at 12:17 PM

I agree with your intent but “commissions” doesn’t really fit either since the monetary amount isn’t directly tied to the profit. I like the idea of simply referring to these payouts as part of the executives “negotiated compensation” and leave it at that. It is of no business of government to question how a company pays its employees.

highhopes on February 10, 2010 at 11:20 AM

A commission and a profit are 2 different things. Dagget is dead on.

Are you suggesting only a commission could be paid if there is a profit? If so – say goodbye to a sales force, revenue – and salary to the other good folks at a company…

Odie1941 on February 10, 2010 at 12:17 PM

Obama is stuck between a rock and a hard place.

On one hand, he needs to placate his base, the anti-corporate “progressives” outside of Washington DC. On the other hand, he needs the inside-the-beltway progressives who recognize reality — that the progressive movement has always been a form of corporatism.

Anti-corporate progressivism has always been nothing but a conceit of middle class, wannabee elites. It is useful to rally the troops, raise money, and get out the vote, but it never has had anything to do with actual governance. In fact, belief in anti-corporatism is a rock-solid way to separate real insiders from those who only think they matter… if you believe its real, you are being used. You are a stooge.

In addition. I think Obama wants to re-inflate the financial sector bubble that popped last year… he needs the money and jobs desperately.

stevieray on February 10, 2010 at 12:23 PM

But this path has danger for him as well, at which Kristof’s tweet hints. Obama’s money came from Wall Street, but his energy came from the hard Left, who saw him as America’s first class-warrior President since perhaps FDR, or ever. If he abandons that effort now, Obama and Democrats can expect a lot less energy from the Left and less money from a disillusioned Wall Street who saw him more as a pragmatist before the election. He could get a few of the Wall Street defectors back on board with a new embrace, but he’ll lose the people who made him a political phenomenon.

Bingo – a move in one direction alienates the other group and vice versa. Check!

His entire 2008 campaign strategy was based on a lie, mutually exclusive promises sold to mutually exclusive groups. He did it by supporting one group in public, another in private. It was always going to crumble once both sides started asking questions, only to stumble upon each other (“What are you doing here? What are you doing here??”).

Obama’s only hope was going to be to bedazzle the riff-raff with razzle-dazzle and build a whole new base of support from the grateful (or captive) masses, at which time he could dump one of his groups and keep the other — preferably the lefties, for sentimental reasons, but either one in a pinch. Unfortunately for him that was always more of an “aspirational” idea and not likely to pan out, though perhaps there was a wing and a prayer at some point that the Hopenchange magic might actually work.

Without it, though, he was fated to a ping-ponging expedition between two mutually opposed groups, which from the outside looks like some odd bipolar disorder but is really a weak chess game with no other moves to play.

RD on February 10, 2010 at 12:27 PM

Small businesses aren’t hiring because they’re trying to protect what small profits they still are making. If you’re barely keeping in the black, its not a good time to go out and hire!

Dark-Star on February 10, 2010 at 11:55 AM

Just had a LONNNGGG talk with a small business ownere here in Denver (over many Whiskeys)…

He has his folks working overtime, because he has some extra work, but can’t hire anyone new because of the drastic increase in Unempoyment “insurance” tax that he is about to have to pay…

Then add in the instability created by the Healthcare bill debacle, where he cannot PLAN any of his finances for the next year or so…

He is actualy turning down work, rather than highering, bec ause he does not know if the Government is going to make bringing on new folks counterproductive to the bottom line of his business.

Small business cannot work without a stable system, and the system is VERY unstable due to the current admins policies.

Romeo13 on February 10, 2010 at 12:27 PM

In fact, belief in anti-corporatism is a rock-solid way to separate real insiders from those who only think they matter… if you believe its real, you are being used. You are a stooge.

Too true! I can’t name an anti-corporatist politician who didn’t sell his/her supporters up the river sooner or later, and usually sooner.

Money talks, and lots of money talks very loudly.

Dark-Star on February 10, 2010 at 12:28 PM

Small business cannot work without a stable system, and the system is VERY unstable due to the current admins policies.

Romeo13 on February 10, 2010 at 12:27 PM

No argument there. By their very nature, small businesses are less able to absorb economic fluctuations.

Me and my girlfriend were discussing trying to set up our own restaurant not that long ago…but the situation has become completely hopeless for entrepreneurs. You might as well try to build a house in a bowl of Jell-O.

Dark-Star on February 10, 2010 at 12:35 PM

Bingo – a move in one direction alienates the other group and vice versa. Check!

Checkmate!!

elclynn on February 10, 2010 at 12:41 PM

stevieray on February 10, 2010 at 12:23 PM

Great comment and I agree except on one point: I’m willing to imagine that if Obama had managed to pull off a change in national psyche, one that was tolerant of an effort to put the government in charge of the means of production, that he’d flip on the Wall Street community in a heartbeat and change reality to suit those aspirations.

So I guess I’m not convinced Obama believes Wall Street and the business community as we recognize them today are unchangeable or indispensable fixtures of reality. (He may however be willing to live with them if he’s got no other option.)

RD on February 10, 2010 at 12:42 PM

So when do we get to discuss your performance, F-ckwit??

CurtZHP on February 10, 2010 at 12:48 PM

Obama, the placating profligate.

scalleywag on February 10, 2010 at 12:49 PM

RD on February 10, 2010 at 12:42 PM

Agree though that the business community is indispensable, and ought to be! :)

Checkmate!!
elclynn on February 10, 2010 at 12:41 PM

Checkenmate? ;)

RD on February 10, 2010 at 12:50 PM

Ever get the feeling that Obama and the Dems are really falling outside the political OODA loop? It would be nice if the Reps were able to take advantage of this, but it doesn’t even seem they know what OODA means…

karl9000 on February 10, 2010 at 1:05 PM

Barack Any Way the Wind Blows Obama.

profitsbeard on February 10, 2010 at 1:08 PM

Checkenmate? ;)

RD on February 10, 2010 at 12:50 PM

That too, :)

elclynn on February 10, 2010 at 1:10 PM

Blankfein and Dimon are both Jewish-
Just saying. BTW, is calling them savvy businessmen a racial remark?

gonnjos on February 10, 2010 at 1:12 PM

Small business, like mine, think the O has crippled thinking when it comes to the economy. Is Franklin Raines still advising him on economic policy? Anyone know?

elclynn on February 10, 2010 at 1:14 PM

“I do think that the compensation packages that we’ve seen over the last decade at least have not matched up always to performance,” the president said

What’s the Indonesian imbecile talking about? Sports draft picks who ended up not performing, but still got tens of millions of dollars for running around like a child? Maybe The Precedent is talking about someone occupying the Oval Office, collecting a check in exchange for doing damage to this nation – measured in the trillions of dollars, if not just fatal damage? Or, maybe The Precedent is just talking about a SCOTUS justice who coolects a check for empathizing instead of exercising a sober judicial temperment constrained by the law?

In the end, we all know that The Precedent, as usual, has no idea what he’s talking about.

neurosculptor on February 10, 2010 at 1:25 PM

Obama tells his audience what he thinks they want to hear, regardless of who that audience is and what their politics are. That’s the mark of a narcissist who can’t bear to be unloved. The scary part is, I think he actually believes that what he says is true, even if it contradicts what he’s told other audiences. The man is, I think, a pathological liar.

NNtrancer on February 10, 2010 at 1:40 PM

We used to call what’s happening off camera…a “kickback.”

mankai on February 10, 2010 at 1:42 PM

“Outrageously Outraged Savvy”

BobMbx on February 10, 2010 at 2:03 PM

it exposes that his rehtoric is for sale. I almost prefer he continue spewing his true beliefs and go down with the ship. Just like I would like to have a (R) candidate explain conservative view unappoligeticly.

lwssdd on February 10, 2010 at 2:11 PM

The more important point is, is Bloomberg right? Is this a shift in tone (or substance) towards compensation for Wall Street executives? Not really.

If he had said, “You know, it’s really none of the Federal government’s business how much or how little money these guys make — or in what form — provided there’s no fraud involved,” then that would be a shift in both tone and substance.

Like you, I’m not holding my breath.

JDPerren on February 10, 2010 at 2:35 PM

The Precedent of change continues to demonstrate the only change he’ll consider is what’s best for his political interests and not the country’s.
Still have the audacity to hope he’ll put your interests first?

chickasaw42 on February 10, 2010 at 4:19 PM

Lord Barry is well on the way to becoming the greatest FAIL in POTUS history. An “unprecedented” “historic” FAIL!

ronsfi on February 10, 2010 at 4:34 PM

So when do we get to discuss your performance, F-ckwit??

CurtZHP on February 10, 2010 at 12:48 PM

Hey, that’s my word for him! Don’t steal it lol ;)

Barry Soetoro is first and foremost a political whore who will say anything to ensure that the coffers are full and the approval ratings are up.

Sad thing is, he makes Slick Willy look like an honest man…almost.

Wanderlust on February 10, 2010 at 5:11 PM

What I don’t understand is why Wall Street and the big banks were/are in the pockets of the Dems (contrary to the general public’s perception). Can anyone explain?

onlineanalyst on February 10, 2010 at 8:00 PM

Obama would deny he ever made the previous comments or they were misunderstood or taken out of context.

albill on February 10, 2010 at 11:08 AM

And the Gibbs the Golden-Tongue will explain what ObaMao meant.

onlineanalyst on February 10, 2010 at 8:14 PM

work with these people all the time. Meeting here, meeting there, input here, input there—results? Zilch, nada, jack and squat. They are impressed by process, not by products.

ted c on February 10, 2010 at 11:34 AM

I also know this type well. You forgot that very generous credit is given for intent, no matter what the outcome. Even the most malignent product of process is chalked up as a success if the intent is deemed praiseworthy.

Obama is attempting to do some of this by staking a claim that his intent to seize one-sixth of the economy was well-intentioned but that the process just wasn’t given a fair chance due to those partisan Republicans out there disputing the wonderful bills crafted by House and Senate Democrats.

highhopes on February 10, 2010 at 11:43 AM

Exactly. And this whole skewed emphasis on process over product goes back to the destructive education philosophy of the last twenty years or so. More energy was focused on building “esteem” by emphasizing process. It didn’t matter if the student had the wrong answer in math or science or a shabbily illogical written essay, the assessment evaluated the process, not the final product.

Thus, we have adults in the work force who try to skate by with “I tried” or “It’s just your opinion.” (They don’t know the difference between fact and opinion either. They don’t understand that a well-buttressed in fact opinion is better than what they feel is right.)

Words mean nothing objective to people trained in this manner. The truth is relative.

ObaMao is a case in point of this philosophy, and judging by Michelle ObaMao’s senior thesis, so is she.

onlineanalyst on February 10, 2010 at 8:37 PM

In addition. I think Obama wants to re-inflate the financial sector bubble that popped last year… he needs the money and jobs desperately.

stevieray on February 10, 2010 at 12:23 PM

For sure. That’s why the caps on Fannie and Freddie were lifted on Christmas Eve when no one was paying attention. The housing bubble and financial will re-inflate simultaneously.

onlineanalyst on February 10, 2010 at 8:50 PM

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