At some point in 2009, a power shift occurred in US politics. Big financial institutions went from needing Washington’s help in avoiding an abyss to Washington seeking their help for economic recovery and job creation.�
This whipsaw of power was on display for all to see Monday when President Obama talked with 12 top bank executives at the White House.�
Just the day before he called them the “fat cats” of Wall Street and reminded the bankers of taxpayer largess in saving their institutions in 2008-09. But then he pleaded with them to speed up lending to small businesses and to support proposed regulations aimed at preventing another financial meltdown.
This sort of hard bargaining with an organized interest group usually goes on behind closed doors in Washington. Just look at all the benefits quietly thrown at lobbies for doctors, pharmaceutical firms, AARP, and others to win support for Mr. Obama’s healthcare proposals.�
After 10 months in office, the president now sees K Street as a two-way street when he wants – or doesn’t want – something from powerful lobbies.
That’s why it is telling to see Obama’s tug-of-war with Wall Street playing out in public, most notably in Congress where lobbyists are swarming over financial-industry reform legislation that has passed the House and awaits action in the Senate.
On Sunday, Lawrence Summers, the director of Obama’s National Economic Council, labeled the industry’s effort to “gut” reform as “a bit rich” after it took a taxpayer bailout. Obama then declared he will not let the banks “thwart reforms.”