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President in New York Today Castigating Wall Street in “Populist” Strategy

April 22, 2010

As some of you know, the President is in town today firing missiles at Wall Street, in keeping with his new-found populist strategy of attacking big business to distract from big government. This was the report from the Wall Street Journal:

President Barack Obama returned to Manhattan’s Cooper Union college on Thursday, two years after a campaign speech that laid out his vision for Wall Street, to castigate a financial industry that he said has too often forgotten the ordinary Americans who have suffered from its reckless irresponsibility.

The speech comes at a pivotal moment in Senate negotiations over a sweeping measure to re-regulate the financial industry. After trading barbed accusations, senators from both parties now say they are near a deal that would preserve the framework of Mr. Obama’s plan. By appearing just two miles from Wall Street, Mr. Obama hopes to raise the political pressure and seal the deal.

“A free market was never meant to be a free license to take whatever you can get, however you can get it,” Mr. Obama said. “That is what happened too often in the years leading up to the crisis. Some on Wall Street forgot that behind every dollar traded or leveraged, there is a family looking to buy a house, pay for an education, open a business, or save for retirement. What happens here has real consequences across our country.”

As he has done several times in the year-long debate, the president implored industry executives to call back the lobbyists engaged in “furious efforts” to thwart or water down his legislation.

“I am sure that many of those lobbyists work for some of you,” he said. “But I am here today because I want to urge you to join us, instead of fighting us in this effort. I am here because I believe that these reforms are, in the end, not only in the best interest of our country, but in the best interest of our financial sector.”

For the first time recently, Mr. Obama didn’t threaten to veto the bill if it didn’t come up to his standards, a marked change in tone. He made that threat during his State of the Union address and again as recently as a few days ago. That suggests the White House feels the long process of securing the overhaul is close to completion.

White House press secretary Robert Gibbs declared the administration “on the precipice of taking some genuinely historic steps.”

Although differences remain about how to regulate Wall Street, the populist rhetoric that infected the debate has cooled. Senate Banking Committee Chairman Christopher Dodd (D., Conn.) has been locked in negotiations with Sen. Richard Shelby (R., Ala.) over a potential compromise, which some believe could come within days.

In his speech, Mr. Obama dodged discussing elements of the bill that may change, including the power of state regulators over national banks and certain provisions designed to beef up the powers of company shareholders that Republicans strongly oppose.

He also acknowledged that certain companies could be exempt from legislation that would redraw the market for derivatives. Some companies, such as agricultural concerns and airlines, use derivatives to hedge their exposure to constantly changing prices of commodities like oil.

Investors, however, trade them as pure speculative bets, something the administration wants to restrict. By making that distinction clear, the president could win over support from senators worried about the breadth of the planned restrictions.

“The only people who ought to fear this kind of oversight and transparency are those whose conduct will fail its scrutiny,” Mr. Obama said.

The crowd at the Great Hall of Cooper Union, filled with students and supporters, was receptive. Much of the front three rows were reserved for Wall Street executives whose responses were considerably more subdued. Their hands remained in their laps when the president spoke of his bank fee to recover the remaining bailout funds and his plea to call off the industry lobbyists seeking to shape the bills.

J.P. Morgan Chase & Co. CEO Jamie Dimon, a longtime Democratic supporter who has grown frustrated with Washington, wasn’t in attendance. The bank’s chief risk officer Barry Zubrow was there instead. Goldman Sachs Group Inc.’s two top executives, Lloyd Blankfein and Gary Cohn, were present. The firm was charged last week with fraud by the Securities and Exchange Commission for its role in selling mortgage-related investments. Other big financial firms represented included Barclays, Morgan Stanley and Credit Suisse.

The legislation would grant the federal government the power to seize teetering financial giants and dismantle them the same way the Federal Deposit Insurance Corporation now can seize failing banks. It would create a new financial consumer regulator, would boost the strength and budget of the Securities and Exchange Commission and would impose new transparency rules on the trading of derivatives, the complex financial instruments that helped bankrupt Lehman Brothers and nearly wipe out American International Group and Merrill Lynch.

Mr. Obama is treating his return to Cooper Union as something of a triumphal homecoming, with a touch of “I told you so” in the speech. Two years ago, he called on Congress to give the Federal Reserve more supervisory power over the biggest financial institutions and to demand tougher new capital and liquidity requirements.

Pending legislation largely follows that demand. Congress appears ready to meet his request, now two years old, for a new financial consumer regulator. His calls for stronger, international accounting standards and financial stability requirements have been taken up by the Group of 20 nations, although talks are proceeding haltingly.

His 2008 suggestion of streamlining the hodgepodge of “overlapping and competing regulatory agencies” has been abandoned. But he is dwelling more on the warnings he issued in that first Cooper Union address.

“I take no satisfaction in noting that my comments have largely been borne out by the events that followed,” he said. “But I repeat what I said then because it is essential that we learn the lessons of this crisis, so we don’t doom ourselves to repeat it. And make no mistake: That is exactly what will happen if we allow this moment to pass—an outcome that is unacceptable to me and to the American people.”

“One of the most significant contributors to this recession was a financial crisis as dire as any we’ve known in generations,” Mr. Obama said in the highly anticipated speech at Coopers.

He told the crowd that America must learn from the mistakes of the economic crises and enact legislation to help prevent it from happening again.

Mr. Obama’s push for financial reform has intensified in recent weeks and he has lashed out at Republicans for meeting with Wall Street lobbyists. In his speech said legislative proposals in Congress would help restructure the rules that allowed Wall Street to take risky bets that Americans ended up paying for.

He said he wouldn’t accept compromises that would weaken the bill, particularly in the area of derivatives, complex financial instruments that played a role in the economic crisis.

Mr. Obama said that financial reforms must set limits on the size of risks that banks can take, and include provisions that would make it easier for a failing institution to unwind before taxpayers would be affected. He also said he believed in a free market.

“But a free market was never meant to be a free license to take whatever you can get, however you can get it,” he said. “That is what happened too often in the years leading up to the crisis.”

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2 Comments
  1. Obamarama permalink
    April 23, 2010 8:42 pm

    Obama’s Next Speech on his Comprehensive Populist Strategy
    (delivered some time in the near future on a date of some historic significance with a backdrop of over one hundred American flags):

    The president will open by delivering several heart-rending, gut-wrenching human interest stories (many or most of which will be debunked by Hannity, Beck and Rush in about a week to ten days)…..then into the meat of the Obama speech.

    —We asked and you agreed to let us run the medical payments industry; and when that begins to fail which it very well might, we can implement plans to take it over medical care completely, so don’t worry about any of that.

    —We’ve been urging you to let us run the energy and automotive industries in the name of the environment; we’re about ready to do that now. And I have been assured that varios science groups have come up with some kind of scientific data to back that up. But if they should fail, or the data is again debunked, don’t be too concerned, we can surely take those industries over completely anyway, with little or no dislocation in the short run. And in the long run substantial savings and efficiencies to benefit everyone. Our goal is one free environmentally friendly car for every man, woman and child in America, excluding all of the 27 immigrants who remained illegal after the passage of our immigration reforms (any new amnesty will include one of the new cars, we’ll keep 27 in reserve).

    —Now, we’re telling everybody to let us have control over all investing and finance, from simple housing mortgages all the way through complex investment tools and vehicles that have not been environmentaly friendly, excuse me that should have been in the last paragraph—no, no, it works here just as well. And if as some naysayers predict, each part of our banking, investing and insurance industries begin to fail, we have smart guys in Washington and I assure you, they can pick them up, fix them up and make then good workable governmental entities one by one. It’ll be orderly and most of you won’t even notice, I promise you that.

    —Did I miss anything?
    [from the crowd…..”Education!”…. some one else “Entertainment”!…… ]
    No, we’ve had all that for a long time, now. For the most part, they do a good job for us all. Nonetheless, union demands that we double the total number of teachers in America within a year is unrealistic, but phased-in increases of 25-50-and-75 percent over three years is both doable and the right thing to do. We have to support a national program that eventually will provide one teacher per student and one administrator per teacher. We have waited on this too long.

    The people are tired of all the stealing. As Bill Clinton might say all the way from the out-house to the White House. Remember, you don’t want some ruthless plutocrat plundering everything, you don’t want some international banker taking a cut of everything that’s been plundered. Once the government has everything, there will be nothing left to steal; you can take that to our bank. There will be a program to reimburse all plutocrats and international investors dollar for dollar so that they are not unfairly victimized by these changes.

    Once everything is one form or another of government service, then the goevernment will have to provide everything, and do it without profits to some needless and heedless third party investor, but we will make partners of any necessary and heedful third party investors.

    Once these simple reforms have been put into place, we’ll have reached an ideal andgoal that the Soviets, Fascists, Nazis and Western Socialist all attempted, but had come up short. We’ll succeed where they failed because this time it will all be done in the name of good old fashioned American Populism — like Mark Twain’s or Will Rogers’ or Norman Rockwell’s or [fill in the populist of your choice from any era or locale]. I don’t know who said it, but it’s true, “We’ll have to destroy capitalism in order to save it.” And we can do that, trust me.

    Obama would then repeat these points in greater or lesser detail for about an hour or even longer than that if their is a Q&A.

    Various pundits and observers would only complain that the speech was a little long and too technical for the public to really understand.

    Obama’s popularity will drop to about 25% and the MSM will say that it’s only a racial thing; a NY Times/CBS poll will show that item by item the public strongly supports the president’s program. That result will be cited to negate a Rasmussen poll that shows the whole program was favored by only 11% and that 59% “Strongly Opposed”. WND will report that a majority of their bloggers hoped for a “Seven Days In May” scenario, WND will also report that the 37,428th military officer refused to take deployment orders from somebody who wasn’t, according to various tests, an “NBC”. The Pentagon will follow that report with announcements indicating that the deployment orders to about 37,428 military officers had been rescinded.

  2. President Quoted Warning Us About Free Speech in America permalink
    May 1, 2010 7:14 pm

    Posted today by Pamela Gellar on her blog, “ATLAS SHRUGS”:

    ANN ARBOR, Mich. – In a blunt caution to political friend and foe, President Barack Obama said Saturday that partisan rants and name-calling under the guise of legitimate discourse pose a serious danger to America’s democracy, and may incite ‘extreme elements’ to violence.
    Her piece, which largely quoted Obama, also contained a YouTube clip from the AP feed of a portion of his speech at Ann Arbor.

    After receiving an honorary doctor of laws degree at the University of Michigan, President Obama said, the following:

    “What troubles me is when I hear people say that all of government is inherently bad,…when our government is spoken of as some menacing, threatening foreign entity, it ignores the fact that in our democracy, government is us.”

    According to Gellar, Obama directly urged both sides in the political debate to tone it down, saying, “Throwing around phrases like ‘socialists’ and ‘Soviet-style takeover,’ ‘fascists’ and ‘right-wing nut’ — that may grab headlines, but it also “closes the door to the possibility of compromise. It undermines democratic deliberation…. At its worst, it can send signals to the most extreme elements of our society that perhaps violence is a justifiable response.”

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