Charles Gasperino, in the New York Post, describes how a large portion of the New York financial industry’s senior management fell for Barack Obama’s tone of moderation and failed to look at the democrat candidate’s actual political record. They’re sorry now, experiencing the Obama Administration’s economic naïveté and unrelenting commitment to leftwing radicalism.
In the depths of the financial crisis last year, people like Morgan Stanley’s John Mack, BlackRock’s Larry Fink, Greg Fleming (then of Merrill Lynch), JP Morgan’s Jamie Dimon and Goldman Sachs’ Lloyd Blankfein were telling everyone that candidate Barack Obama was a “moderate,” and moderation was what this country needed.
What a difference a year makes. They won’t admit it in public—but in private conversations, the top guys on Wall Street are feeling burned.
The guy who seemed like such a steady voice—vowing to curb runaway spending and restoring order to the banking system and the economy as a whole—is instead so driven to achieve his big-government policy goals that he and his policy people are ignoring their own economic advisers on the severe economic costs that his agenda will cause.
I’m told that Treasury Secretary Tim Geithner and chief economic adviser Lawrence Summers have both complained to senior Wall Street execs that they have almost no say in major policy decisions. Obama economic counselor Paul Volcker, the former Fed chairman, is barely consulted at all on just about anything—not even issues involving the banking system, of which he is among the world’s leading authorities.
At most, the economic people and their staffs get asked to do cost analyses of Obama’s initiatives for the White House political people—who then ignore their advice.
It’s almost the opposite approach, the Wall Street crowd complains, from the last Democratic president, Bill Clinton, whose main first-term achievement—deficit reduction—was crafted by his chief economic adviser, Robert Rubin.
Like Obama, Clinton and Rubin promised to raise taxes on the “rich,” and they did. But Clinton didn’t raise taxes to embark on a wild-eyed redistribution of wealth and massive programs. In the early Clinton years, Rubin convinced the president that he needed to avoid the grim consequences of runaway spending—and after the Republicans took Congress in ‘94, it was no longer an option.
Of course, the Clinton tax hikes came at a cost—before the tech boom ignited the economy in 1995, growth was mediocre at best. But government spending remained under control, and lower interest rates followed, as did an economic recovery.
Obama, according to Wall Street people who regularly deal with his economic and budget officials, is acting as if he has a blank check to do what he wants, while ignoring the longterm costs of his policies.
As one CEO of a major financial firm told me: “The economic guys say that when they explain the costs of programs, the policy guys simply thank them for their time and then ignore what they say.”
In other words, the economic people feel that they have almost no say in this administration’s policy decisions.
