There is a somewhat odd — and overtly political — article in the FT by former US labor secretary and current professor of public policy at the Berkeley Robert Reich.
I say somewhat odd because it is titled “ Why Obama must take on Wall Street.” There was a financial crisis? Something must be done about it? You don’t say!
Its ironic this was published just before the (belated) first public meeting of the Financial Crisis Inquiry Commission headed by Phil Angelides.
Here’s the FT:
A larger explanation, I am afraid, is the grip Wall Street has over the American political process. The Street is where the money is and money buys campaign commercials on television. Wall Street firms and executives have been uniquely generous to both parties, emerging as one of the largest benefactors of the Democrats. Between November 2008 and November 2009, Wall Street doled out $42m to lawmakers, mostly to members of the House and Senate banking committees and House and Senate leaders. In the first three quarters of 2009, the industry spent $344m on lobbying – making the Street one of the major powerhouses in the nation’s capital.
Money is powerful. Talk is cheap. Mr Obama recently called the top bankers “fat cats”, and the bankers insisted they were shocked – shocked! – to learn how intransigent their lobbyists had been in opposing financial reform. The bankers even claimed a “disconnect” between their intentions and their lobbyists’ actions. This was all for the cameras, of course.
But the widening gulf between Wall Street and Main Street – a big bail-out for the former, unemployment checks for the latter; high profits and giant bonuses for the former, job and wage losses for the latter; buoyant expectations of the former, deep anxiety and cynicism by the latter; ever fancier estates for denizens of the former; mortgage foreclosures for the rest – is dangerous.
The unstated subtext is the bigger querstion: Why was nothing done about this during the first year of the Obama Presidency?
Why Obama must take on Wall Street
FT, January 12 2010