When Treasury Secretary Timothy F. Geithner and White House adviser Valerie Jarrett hosted a private dinner with the leaders of six banks to discuss financial regulation on Jan. 20, the bankers soon changed the subject. The president needed to stop demonizing Wall Street, they told Jarrett, according to three people familiar with the meeting.
What the executives, including Brian Moynihan, the chief executive officer of Bank of America Corp., and Robert Kelly, the chief executive of Bank of New York Mellon Corp., didn’t know was that President Barack Obama, who had proposed a new tax on the biggest banks six days earlier, was about to strike again.
After leaving the meeting around 9 p.m., the executives learned that Obama would ask Congress the next day to ban commercial banks from running proprietary trading operations, owning hedge funds, and rapidly increasing market share. In his remarks, Obama indicated his willingness to go to the mat with the industry: “So if these folks want a fight, it’s a fight I’m ready to have.”
Industry officials said they were stunned. “We did not know it was coming, that’s for sure,” said Scott Talbott, a lobbyist for the Financial Services Roundtable, which represents large banks and insurance companies and whose chairman, Richard Davis, the CEO of U.S. Bancorp, also attended the dinner.
In his SOTU speech, Barack Obama barely mentioned the war in Afghanistan, explicitly referring to it in only three sentences near the end of the speech. However, Obama offered plenty of class warfare against the wealthy. He repeatedly castigated banks and Wall Street for creating the financial collapse, even managing to blame them for the housing bubble that Congress created through Fannie Mae and Freddie Mac between 1998-2007, and which Congress continues through FHA to this day.
If this comes as a surprise to anyone, let alone Wall Street leaders, then they simply haven’t been paying attention. Obama’s previous career before politics was a community organizer, one of a distinctly leftward tilt. When he told Joe the Plumber that he wanted to “spread the wealth,” where did they think he would find it? Instead of thinking like a chessmaster a few moves forward into the future, Wall Street played checkers with their political donations instead — or perhaps Chutes and Ladders — and financed a class-warfare master into the White House.
You know what this moment requires, don’t you? Too bad we don’t have a Victor Lazlo to slap some sense into these people.