Obama and the Bankers
Speaking of Obama and Wall Street, here's the latest. After last night's attack on "fat cat bankers" on 60 Minutes, Obama held a White House meeting with top financial CEOs today that the Wall Street Journal said "was expected to clear the air between the president and the financial sector." Good to hear! The New York Times added this:
Mr. Obama, who has faced criticism from Democrats and Republicans alike for being too close to Wall Street, called Citigroup, Goldman Sachs and 10 other big banks to the gathering as anger over last year’s bank bailouts continued to percolate. The president will address the size of salaries and bonuses, an official said, as he seeks to impress upon bankers that they have a “special responsibility” to consumers.
“We have to get them off the sidelines and get them to play a more active role in our economic recovery,” Rahm Emanuel, the White House chief of staff, said on Sunday. “They play an essential role in helping the economy grow.”
Look: bankers are going to keep making lots of money as long as the financial sector makes a lot of money. That's just the way the business world works, and all the jawboning in the world won't change that. If Obama really wants bonuses to come down, he needs to propose regulations that will shrink the profitability of the financial industry. If he does that, bonuses will come down naturally. If he doesn't, they won't. He'll get — at most — a bit of short-term posturing designed to relieve public pressure until everyone forgets the whole thing and bankers can go back to business as usual.
So: fewer meetings and more regulations, please.