Is President Obama soft on the banks? Of course!

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What follows is an abridged transcription of an interview by Cenk Uygur of the Young Turks on February 24, 2012 of Tim Dickinson, correspondent with Rolling Stone, and Ari Berman, author of “Herding Donkeys”, on the topic, “Is Obama Soft on the Banks?”

Cenk Uygur: Is Obama soft on banks? Definitely. Eric Holder, our Attorney General, said at a speech at Columbia University, that their fight back against financial fraud has been a record of success nothing less than historic.

Tim Dickinson: Most people forget that before Barack Obama took off with all those small dollar donations in 2008, in 2007 he was flocked around by a small coterie of Harvard affiliated Wall Street types, like Michael Feldmen, Jamie Rubin, the son of the former Treasury Secretary. And so in many ways he is politically indebted to Wall Street in a very real way: they ponied up a lot of money for his campaign early, they established him as a serious political threat to Hillary Clinton. And then the campaign took off.

And that history is important in helping to understand why Obama has said to the Wall Street bankers, I am the only thing standing between you and the pitchforks. Why doesn’t Obama have a pitchfork? That’s part of the answer.

Cenk Uygur: Everybody should know that Goldman Sachs was the number one donor last time around. This time around he has already raised $9 million from the financial industry.

Let me read you, Ari, a quote from Eric Holder: “We found that much of the conduct that led to the financial crisis was unethical and irresponsible.” But we also discovered that some of “this behavior—while morally reprehensible—may not necessarily have been criminal.”

Ari Berman: If you watched the very good 60 Minute Special about why the government has not prosecuted any Wall Street banks, you would come to a very different conclusion.

And Senator Dick Durbin said a while back that the banks own this place, they own Washington, and as Tim mentions, that explains why there have not been any major prosecutions of the banks. There has been very little accountability with the bailout. There has been basically a return to the culture of the pre-economic crisis on Wall Street. That’s why the mortgage settlement that was just reached has been criticized by a number of people.

So on a number of different issues the Obama administration has been weak on the banks because the banks have so much influence in Washington.

Cenk Uygur: I should be fair on Eric Holder when he said that their success has been historic. Their success has been historic: it has been a historic failure actually. They have had less financial fraud cases against the big banks than any administration in the last twenty years. That’s a fact. They have been softer on the banks than President Bush, if you can imagine that.

Tim, here is Eric Holder saying, “So let me assure you. Whenever and wherever we do uncover evidence of criminal wrongdoing, we will not hesitate to bring prosecutions.” He has a funny definition of undertake, doesn’t he?

Tim Dicksinson: A judge recently rebuked the SEC for not bringing criminal charges, or at least settling a case, with Citibank in which the bank actually had to admit some wrongdoing.

There’s something to this, that Obama is in a difficult spot, where he is desperately trying to get the economy moving again and the financial industry is, whether we like it or not, an incredible driver of this economy. So you can understand sort of it goes against his gut judgment to be fighting for Wall Street bankers but there’s something about just giving this economy chugging along his top priority rather than politically satisfying vengeance against bankers. I think that has to be accounted for.

Cenk Uygur: I hear you. But my take on that is that it’s not about political vengeance. It would have been better policy to clean out the banks. In fact, that would have helped out the economy overall. But it seems that he didn’t have the political courage to do that. It seems that they convinced him to put a political band-aid on it.

Ari Berman: If you look at the main people that he chose as his economic advisors, their main thing was propping up Wall Street, getting it back chugging again, and not really shaking it up and changing it. And that was kind of the core philosophy that was basically the standard operating procedure for the Obama administration for two years.

Really it was only when Occupy Wall Street happened, that the administration sharpened its rhetoric and started talking in broad terms about the 99%. If there hadn’t been an Occupy Wall Street movement, Obama may very well still be defending the banks in much more rigorous terms.

It’s also important to note that Wall Street money now has abandoned Obama. Romney is outraising Obama by eleven to one on Wall Street. And that has a lot of Obama administration people worried, and so they want to get back on the side, in some cases, of the bank people to raise money from Wall Street for the re-election campaign.

Tim Dickinson: Jim Messina, the campaign manager, was just on Wall Street, a week ago, telling Wall Street bankers, that we might demonize Romney but we are not demonizing you guys. There has been this outreach to rebuild those bridges. It’s a tricky dynamic because he needs that money in this unlimited arms race.

Cenk Uygur: Yeah, it’s the same point that I was going to make. He promised them, “hey, don’t worry guys, we won’t hurt you.” Believe me, we know you won’t hurt them.

Loose transcription by the Barefoot Accountant
Accountants CPA Hartford, Connecticut, LLC

About William Brighenti

William Brighenti is a Certified Public Accountant, Certified QuickBooks ProAdvisor, and Certified Business Valuation Analyst. Bill began his career in public accounting in 1979. Since then he has worked at various public accounting firms throughout Connecticut. Bill received a Master of Science in Professional Accounting degree from the University of Hartford, after attending the University of Connecticut and Central Connecticut State University for his Bachelor of Arts and Master of Arts degrees. He subsequently attended Purdue University for doctoral studies in Accounting and Quantitative Methods in Business. Bill has instructed graduate and undergraduate courses in Accounting, Auditing, and other subjects at the University of Hartford, Central Connecticut State University, Hartford State Technical College, and Purdue University. He also taught GMAT and CPA Exam Review Classes at the Stanley H. Kaplan Educational Center and at Person-Wolinsky, and is certified to teach trade-related subjects at Connecticut Vocational Technical Schools. His articles on tax and accounting have been published in several professional journals throughout the country as well as on several accounting websites. William was born and raised in New Britain, Connecticut, and served on the City's Board of Finance and Taxation as well as its City Plan Commission. In addition to the blog, Accounting and Taxes Simplified, Bill writes a blog, "The Barefoot Accountant", for the Accounting Web, a Sift Media publication.
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