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Sunday, January 23, 2011

Is Obama Wall Street’s New Best Friend?

Is President Obama Wall Street’s best friend? CNBC seems to think so.

In the column “Talking Numbers” posted on Yahoo Finance (“Why Obama May be Wall Street’s New Best Friend”, 01-18-10), CNBC pundits postulate that President Obama has swiftly moved into bed with Wall Street financiers and corporate moguls. They opine:

Candidate Obama was an anti-tax cut, pro-regulation, anti-big business populist ready to take on Wall Street and any fat-cat CEO who stood in his way. President Obama? A bit of a different story.

The president's tack to the middle began with a trickle last year when he made some key concessions on health care policy and financial reform.

But since the November election, after which he famously described his Democratic Party's defeat as a "shellacking" at the hands of reformist Republicans, the move has become even more pronounced.

The post-campaign president has hired Wall Street insider William Daley as his chief of staff in an apparent means to ingratiate himself with the leaders of corporate America, struck a high-profile bargain on tax cuts, and now has put burdensome job-killing regulations on the table.

While it remains to be seen how sincere the president's conversion is, it's been a winning ticket for investors so far.

Like Paul on the road to Damascus, President Obama has been struck with the recognition that economic recovery must come from obeisance to the corporate agenda. Or at least that’s the way that Wall Street sees it. CNBC writers smugly cite Wall Street colleagues to bolster their claim:

"It's amazing how far he has moved off his campaign promises to the left, and moved over to the center-right," says Gary Hager, president of Integrated Wealth Management in Edison, N.J. "The White House is definitely going to be more accommodative of Wall Street, because they see the absolute big enchilada on the ground is unemployment. The only real way to tackle unemployment is to get banks lending and companies hiring."

Some may find it puzzling that banks and companies have had two years of bailouts and loans followed by soaring productivity and exploding profits and have yet to lend or hire, yet Obama is said to believe that more warmth and fuzzy “accommodation” will produce results. Is this really what is going on?

Perhaps the truth is suggested by a few other slippery quotes from the posting:

After all, the president barely hid his contempt for Wall Street during the campaign even as many of its workers were pumping money into his campaign coffers. Employees of Goldman Sachs (NYSE:GS - News), for instance, contributed nearly $1 billion[sic] to the Obama campaign. (my italics)


"He had a come-to-Jesus meeting with some major leaders in this country, most of them running big corporations. I think he came out of there impressed that he needed to take a different view toward business," says Rob Lutts, CIO and president of Cabot Money Management in Salem, Mass. "If you analyze his speeches, it was always 'us and them.' What he didn't realize was those are the people who are going to create the jobs, create the environment so he can get re-elected." (my italics)

Would it be cynic to suggest that the cozy relation that Obama is fostering with Wall Street and corporate executives has more to do with his re-election effort than economic policy?

Would it be mean-spirited to suggest that Obama has started his 2012 fund-raising campaign in earnest?

I’m afraid that is my view. In any case, Obama’s embrace of the interests of monopoly capital is now more than the suspicion raised by hard-lefties and fellow Marxists that called him out two years ago as another –albeit softer and slipperier – bourgeois candidate. As hard as it is to swallow by those once intoxicated with Obama-mania, the truth is now out in the open: On Monday, President Obama offered his contrition to the temple of Wall Street, The Wall Street Journal with an op-ed piece pledging a campaign of de-regulation for US corporations. Yes, de-regulation of those formerly lured by previous de-regulation into catastrophic speculative ventures – a jail break for financial criminals with deep pockets for potential campaign contributions.

Obama’s new-found love fest with business interests should not come as a shock. It is hardly a betrayal to those who studied his early career, his campaign, and the first two years of his Administration – a history of friendliness to power and means, occasionally masked with vague, highly rhetorical homage to popular causes seductive to voters.

With Obama’s public hug from Wall Street, two dangers arise. Some may now be inclined to turn towards cynicism, walking away from struggles that they thought Obama would lead. They may fail to draw the lessons of bourgeois politics, repeated since the beginnings of the Republic: change emanates and succeeds only through independent, popular pressure.

Others may repeat the failed strategy of the past and argue once again that Obama, despite his shortcomings, is still better than Palin, Romney, or whatever candidate the Republicans offer. While this will undoubtedly be true, it consistently leaves working people with a smaller piece of the pie. Decades of preferring death by a thousand cuts over a brutal coup de grace hardly seems worthy of a democracy.

It is neither a time to despair nor a time to retreat, but a time to fight. But this time, our fight must not invest all in the “hope” and “change” promised by a media-savvy politician hand-picked by a corrupted, corporate-owned political party. It won’t be an easy step for many.

Zoltan Zigedy

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