Obama Can't Be Trusted on Wall St. Reform -- Here's How to Forge a Finance Bill That Doesn't Suck
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Let’s pretend that, sometime in 2002, thousands of cars started exploding. In our pretend world, oil refineries added a new chemical to gasoline that was supposed to make it burn more slowly but in fact caused horrific explosions.
And let’s say that in response to these explosions, then-President George W. Bush angrily lashed out at the “pollutifying” oil companies and demanded that the government “intensifize its scrutinimany” of Big Oil.
This populist tirade would come despite the fact that Bush had received millions of dollars from the oil and gas industries and that Bush himself began his post-alcoholism career as a Texas oil man. While it’s possible that some poor suckers would take Bush’s newfound distaste for the oil industry seriously, I think the vast majority of reactions would range from laughing to guffawing to ROFLing to OMGWTFLMAOing.
Sadly, America faces a similar situation today with President Barack Obama’s relationship with Wall Street. Put simply, when Obama smiles and tells us in his hopiest, changiest voice that he really, really wants to rein in Wall Street and make banking safer for Main Street, we should not believe him.
Why? Well, let’s start with the most obvious reason Obama does not deserve our trust: campaign contributions. Look at the insane amount of cash that employees of the major financial institutions forked over to Obama during his 2008 presidential campaign. Citigroup employees donated over $700,000; JP Morgan employees donated $695,000; and Morgan Stanley employees donated over $500,000. Employees of Goldman Sachs, the vampire squid itself, donated a whopping $995,000 to the Obama campaign in 2008, making the squid’s employees the second-largest contributor to Obama’s campaign.
As if that weren’t enough, consider the people he’s surrounded himself with. Former President Clinton recently acknowledged that he received “the wrong advice” about regulating derivatives from former Treasury Secretary Larry Summers in the late ‘90s. That would be the same Larry Summers who recently pooh-poohed the idea of breaking up our oligarchic megabanks since doing so would allegedly “hurt the competitiveness of the United States.” For those of you not paying attention, Summers currently serves as... the director of the White House’s National Economic Council! Before taking the job, Summers raked in $5.2 million working part-time for the D.E. Shaw hedge fund.
Meanwhile, current Treasury Secretary Timothy Geithner is a protégé of Bob Rubin, whom Clinton says also gave him bad advice on derivatives regulation. Geithner, you may recall, was the financial genius who came up with a cunning plan last year to provide private investors with government guarantees in exchange for buying worthless mortgage-related assets from the biggest banks. Goldman Sachs’ “Timberwolf” CDO may indeed have been a shitty deal, but you can bet there are lots like it that are now potential liabilities for U.S. taxpayers thanks to Geithner’s handiwork.
And finally, consider the general Obama approach to governance. During the 2008 presidential campaign, Obama promised to use the magical powers of both hope and change to help people put aside their ideologies and govern in a civil, bipartisan fashion. Obama has kept this promise, in a manner of speaking. But instead of bringing people from all walks of life together to work cooperatively, Obama has governed by bringing together every special interest in Washington and handing them all important favors in exchange for holding their fire on his initiatives. Consider the recent health care fight in which the Obama administration ditched a public insurance option to appease insurance companies and then worked to undermine a drug reimportation amendment to appease the pharmaceutical lobby, among other things. Letting Big Pharma continue gouging consumers? Yes we can!