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.