Streets and Sheriffs: Searching for High Ground on Wall Street

Apr 22, 2010 8:11am

By Rick Klein There’s a street that President Obama wants you to know he’s focused on. (Hint: Its name doesn’t start with “Wall.”) Though the setting for the president’s speech Thursday is the heart of Wall Street, the stakes are such that the message must be heard well beyond it. It’s a moment the left has been waiting for — and a moment the legislation needs for it to have some oomph with the public when it passes. And the “bailout” label can’t be lost unless the president can position himself as sheriff, not savior. (Plus — with one potential rival just a few steps from the stage, the president won’t have to look far to see part of what he’s up against…) Returning to a venue he visited in March 2008, when Enron and WorldCom where the villains in question, the president’s tone on Thursday will be less scolding than edifying — laying out the stakes of this moment he knew he’d have to confront since before he became president, a White House aide says. The legislative fixes, as the president knows, are on their way to passing — with bipartisan support. But the bill’s particulars will matter around the edges — and causes can sure use champions (and villains). “It is essential that we learn the lessons of this crisis, so we don’t doom ourselves to repeat it,” the president plans to say at Cooper Union, per advance excerpts released by the White House. “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.” “Both bills [now being discussed] represent significant improvement on the flawed rules we have in place today, despite the furious efforts of industry lobbyists to shape them to their special interests. I am sure that many of those lobbyists work for some of you. 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.” Treasury Secretary Tim Geithner, on “Good Morning America” Thursday, predicts bipartisan support, despite opposition from financial institutions: “There's enormous resistance, still, across the U.S. financial community and by large institutions around the world to what we're trying to work through.” Geithner, on “too big to fail”: “Our view is that we need to make sure that you're limiting how big they can get and how risky that they can get,” he told ABC’s George Stephanopoulos. “But if, in the future, if they mess up and they take themselves to the edge of the cliff again, then we want to make sure we can put 'em out of existence, dismember them, break them up safely without the American taxpayer having to bail them out again.” On the setting: “With the city's most famous ex-bond trader, Mayor Bloomberg, likely sitting in the front row, Obama is expected to argue that the only way to save Wall Street — and the broader U.S. economy — is to reform Wall Street,” Ken Bazinet and David Saltonstall write in the New York Daily News. “But the president's tone is expected to be more firm than fiery – hopefully leaving no doubt in the minds of Wall Street's titans that Obama is not about to retreat.” Eyes on 2012, within eyeshot of the president, just maybe? “With President Obama set to visit New York to push for passing financial reform, the billionaire mayor, who got his start on Wall Street in the 1960s and is considered a national expert on financial matters, argues that too much regulation could endanger the economy as much as others say it would protect it,” per the AP. “The bashing of Wall Street is something that should worry everybody,” Mayor Bloomberg declared last week.” Momentum: “President Barack Obama will take aim at ‘risky decisions’ made on Wall Street in a speech today in New York intended to build momentum for legislation to overhaul U.S. financial regulations,” Bloomberg News’ Roger Runningen and Edwin Chen write. “While Mr. Obama could not have known how bad things would get, then [on the campaign trail] as now he saw a muscular role for government in enforcing regulations in the public’s interest, while weighing them against the industry’s interests so both would benefit,” Jackie Calmes writes in The New York Times. On the timing: “The administration's goal is to have reforms in place before the fall, when the second anniversary of the economic collapse rolls around,” ABC’s Karen Travers and Matthew Jaffe report. “Critics of the Obama administration said it may be difficult for the president to continue to fire rhetorical volleys at Wall Street, given the campaign money he has received from the very industry he's now pointing the finger at.” Your bracketers … “President Obama's 'TARP Forever' Act.” “President Obama talks a big game when it comes to Wall Street, but his newest job-killing initiative would provide the nation's largest financial firms with permanent bailouts ordered and overseen by unelected federal bureaucrats,” House Minority Leader John Boehner, R-Ohio, writes in an op-ed in Investors Business Daily. “Under his proposal, the largest Wall Street firms would become eligible for special treatment, including taxpayer-funded resources unavailable to smaller financial firms. These include exclusive access to a pre-existing bailout fund, a Treasury-backed line of credit and a government guarantee for any debt.” House Minority Whip Eric Cantor, R-Va.: “As the President goes to New York tomorrow, I know all of us are going to looking to see whether he can tone down the hyperbole, stop the populous rhetoric and start advocating smart policy recommendations.” Where the rhetoric matters … The president “is now starting to reposition the administration to be the champion of Main Street and the individual,” Kathleen Hall Jamieson, of the Annenberg School of Communication at the University of Pennsylvania, tells USA Today’s Mimi Hall and Richard Wolf. The AP’s David Espo: “If there's any election-year support in the Senate for future bailouts of the big banks on Wall Street, it isn't immediately apparent. Instead, President Barack Obama and his Democratic allies compete daily with Republicans for the title of opponent in chief, and six months before midterm elections the fate of legislation to regulate the financial industry remains clouded.” Context: “As President Obama heads to New York City on Thursday to press for a major overhaul of financial rules, he faces stiff opposition by Wall Street to the toughest proposed regulatory crackdown since the Great Depression,” the Los Angeles Times’ Jim Puzzanghera writes. Unless: “Key members of both parties said Wednesday that they are close to agreeing on the main elements of a bill to overhaul the nation's financial regulations, raising the prospect that the Senate could begin formal discussion of the landmark legislation early next week,” The Washington Post’s Brady Dennis and Paul Kane report. Crack in the wall … “Sen. Charles Grassley became the first Republican to support a piece of the Wall Street reform bill,” per ABC’s Z. Byron Wolf. “He [voted] in the Agriculture Committee [Wednesday] to report out the derivatives piece, which would regulate credit default swaps and force big banks out of the default swap business.” “Grassley’s vote hinted at a party moving steadily toward compromise on financial regulatory reform,” Politico’s Carrie Budoff Brown and Eamon Javers reports. But Karl Rove sees Democrats “playing with fire”: “If Democrats get financial regulation right, there's a chance the economy could be strong enough by 2012 to give Mr. Obama a good shot at winning a second term. But if Democrats get financial regulation wrong and the economy is stumbling come 2012, Americans are not going to reward the man who gifted them four straight anemic years. If that's the case, no amount of whining, spinning or adroit use of teleprompters will save Mr. Obama from voter wrath,” Rove writes in his Wall Street Journal column. E.J. Dionne sees Obama the fighter: “No one doubts the Democrats are in a deep electoral hole. But Obama has now joined the battle with a strategy to transform the election from a referendum on his own party into a contest with a Republican Party the public doesn't much like, either. [Sen. Barbara] Boxer's fate, but also the fate of a lot of other Democrats, hangs on its success.” Off-message, at least on this day… “President Barack Obama suggested Wednesday that a new value-added tax on Americans is still on the table, seeming to show more openness to the idea than his aides have expressed in recent days,” per the AP’s Chuck Babington. “Before deciding what revenue options are best for dealing with the deficit and the economy, Obama said in an interview with CNBC, ‘I want to get a better picture of what our options are.’ ” Then there’s Goldman Sachs: “President Barack Obama won't return about $1 million that employees of Goldman Sachs Group Inc. donated to his 2008 presidential campaign, according to a spokesman for the Democratic National Committee,” Brody Mullins and Jean Spencer report in The Wall Street Journal. McClatchy’s Greg Gordon: “While Goldman Sachs' lawyers negotiated with the Securities and Exchange Commission over potentially explosive civil fraud charges, Goldman's chief executive visited the White House at least four times.” Not the last of these: “Sen. Blanche Lincoln, under fire for keeping a $4,500 contribution from Goldman Sachs’s political action committee, has canceled a fundraising lunch with Goldman executives that was scheduled for Monday and would have netted many times that amount for the Arkansas senator’s reelection campaign,” Politico’s Kenneth P. Vogel and Jake Sherman report. On timing … “Categorically, we found out about it on CNBC,” President Obama told CNBC’s John Harwood, of last Friday’s SEC action against Goldman Sachs. “The SEC is an entirely independent agency that we have no day-to-day control over. And they have never discussed with us anything with respect to the charge that would be brought. So this notion that somehow there would be any attempt to interfere with an independent agency is completely false.” SEC Chairman Mary Schapiro: “The SEC is an independent law enforcement agency. … We do not coordinate our enforcement actions with the White House, Congress or political committees. We do not time our cases around political events or the legislative calendar.” Staying put? “White House Budget Director Peter Orszag was poised to become the first member of Barack Obama’s Cabinet to leave, as early as this summer. Then came an appeal from the president insisting that he reconsider,” Bloomberg’s Julianna Goldman and Hans Nichols report. “Orszag will make his decision soon, according to a person familiar with the matter, Bloomberg BusinessWeek will report in its April 26 issue. The 41-year-old budget director had been signaling to White House officials that he didn’t plan to remain for the next budget cycle.” Did someone say something about playing with fire? Vice President Joe Biden is also in New York Thursday, sitting down with the ladies of “The View,” 11 am ET on ABC.  How about these plays? “You might think that no sensible Republican with presidential ambitions would wander into a blood feud within the party. This year, you would be wrong,” Karen Tumulty reports for The Washington Post (and welcome!). “The likely contenders for the 2012 GOP nomination have been sprinkling their marquee-worthy endorsements in an unusually large number of bitter primary contests across the country.” Risking the wrath of the blogosphere … Politico’s Jonathan Martin and Ben Smith on “The tea party's exaggerated importance”: “The tea party ‘movement’ … has little organizational structure to speak of. True tea party candidates — as opposed to establishment figures like former Florida House Speaker Marco Rubio who have gladly adopted the label — have failed to make a dent so far in Republican primaries.” Your health care financial fallout: “House Democrats who switched their votes to help pass the new health care law saw their political contributions rise this year, a USA TODAY analysis of new campaign-finance reports show,” Fredreka Schouten reports. “They also outraised their Republican challengers during the first three months of the year — as they picked up financial support from fellow Democrats, health care interests, labor groups and others.” SCOTUS huddling: “Besides speaking to several potential nominees, President Obama is reviewing their legal writings, their speeches and their briefs, among any number of other considerations, as he weighs his decision,” ABC’s Jake Tapper, Ariane de Vogue and Karen Travers report. “The main things Obama is looking for are fidelity to the law and the Constitution, he told CNBC, adding that he is looking for ‘somebody who has the kind of life experience so they understand how their decisions are impacting ordinary people.’ ” New name: “A White House aide confirms that Ann Claire Williams — a US Circuit Judge for the U.S. Court of Appeals for the Seventh Circuit — is on President Obama’s proverbial short list of possible Supreme Court nominees,” Jake Tapper reports. Looking ahead — intriguingly: “While most of the 10 candidates do not have much chance of being selected this time out, advisers said one reason to look at so many was to have a stable of potential nominees ready in case another seat becomes vacant sooner than expected,” Peter Baker reports in The New York Times. “The White House is preparing for the situation that President George W. Bush faced in 2005 when he suddenly had two seats to fill at once after Justice Sandra Day O’Connor retired and Chief Justice William H. Rehnquist died.” More fun for Michael Steele: “Barely 6 1/2 months before the midterm elections, an internal investigation by the Republican National Committee has revealed that the organization is beset with questionable financial management and oversight and is spending more money courting top-dollar donors than it raises,” the Washington Times’ Ralph Z. Hallow reports. In Florida — the credit card scandal is touching close to Gov. Charlie Crist, too: “The ousted party chairman [Jim Greer] charged nearly $500,000 to his American Express card to eat well and live well: spa treatments, flowers, flights, fine hotels and pricey restaurants. In a month ending in March 2008, he dropped $41,421.31 in Las Vegas, Washington and Beverly Hills, according to billing statements obtained Wednesday by the St. Petersburg Times and Miami Herald,” Adam C. Smith, Beth Reinhard, Marc Caputo and John Frank report. “Gov. Charlie Crist never had a credit card, but he's not free from the controversy. FBI agents have asked about the Crist campaign, said Republican fundraiser Al Hoffman. … It was no secret Greer was aggressively promoting Crist's campaign, but it could be a violation of federal election law subject to civil penalties for the state party to pay for a federal candidate's expenses.”
The Kicker: “All men are dogs, the way I look at it.” — Las Vegas retiree Robert Donald, the only person to donate money to Sen. John Ensign’s, R-Nev., reelection campaign in this year’s first quarter. (He sent two checks of $25 each, TPM Muckraker reports.)  “My job tonight is to be like the Iceland volcano … blow a lot of smoke and keep everyone from leaving when they want to.” — Sen. Claire McCaskill, D-Mo., funny at the Washington Press Club Foundation's Annual Congressional Dinner.
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