New Orleans On the front page of the papers today there is more drumbeating about the President having yet another meeting with the nation’s top bankers to jawbone them to finally start making loans to small businesses and homeowners. At this point it is hard to even call this jawboning. It’s more like gumming them. This seems to have now become a semi-annual charade that Obama and the bankers have in order to put on a show for the American people that they are all “trying” to do something, while they don’t really do jack about any of these problems.
The Obama Administration’s doctrine around banks seems to be “speak softly and carry no stick.” All of which is bizarre. The U.S. Government bailed these boys out for billions, but now they act like they don’t know our name.
Note to U.S. Citizens: next time let’s just federalize the banks until the crisis is over for all of us and not just for them!
I have to believe that part of the problem here rests squarely with Treasury Secretary Timothy Geithner. I don’t know how to say this subtly, but the big Wall Street banks obviously think Tim is their bitch. They managed to take him for all we were worth when he was at the NY Federal Reserve, and now that he has the big job, they clearly believe he is their cousin and they are taking every pitch he throws with a smile. It is hard for me to believe that they have any fear of anything that he might threaten, since they know full well that his career and future is inextricably tied to theirs. They survive, and then he survives. They go down; he goes down.
The President had all of the leverage in the world over these banks, but can’t get a deal. Furthermore, if I have to read one more time that he is on the phone all of the time chitchatting and asking for advice from Chase CEO Jamie Dimon, I’m going to puke. We don’t need the President of the United States on Dimon’s Facebook fan page, we need him taking a stick to these guys and getting them to do right.
Paul Krugman, the Nobel economist and Times columnist, makes the point that we aren’t learning from the financial crises that we need more regulation and laments the weak soup of the Frank bill for “reform,” and the fact that 27 Democrats ran from that along with all of the Republicans. I didn’t read him say how strong the Administration has gone to the mat for the bill on either side of Congress. I know they didn’t fight to include the Community Reinvestment Act under these new protections. I wonder if they are pulling any weight here, especially since everything we read indicates that they are allowing a turf fight between the Federal Reserve, FDIC, and everyone else.
On Sportscenter or one of those shows that I’ve found myself watching in order to enjoy the Saints season, they razz some great players with a series they call “Come on!” Seems like we should all be saying to the President and his piddling around with the banks: “Come on!”