President Obama jetted into New York Thursday to address the assembled worthies of Wall Street.
In the summer of 2008, as candidate Obama was seeking to distinguish himself from Republican John McCain, the Democratic nominee for president noted rising unemployment and foreclosure rates and griped that: “It was not an accident or a normal part of the business cycle that led us to this situation. There were some irresponsible decisions that were made on Wall Street and in Washington.”
Framing out a Wall Street versus Main Street populism, Obama declared: “This is an emergency we feel not only when reading the Wall Street Journal, but when we travel across Ohio and Michigan, New Mexico, no matter where you meet people day after day who are one foreclosure, one illness, one pink slip away from economic disaster.”
When the scope of the emergency became apparent, after Wall Street speculators crashed the economy, Obama declared in September of 2008: “We cannot only have a plan for Wall Street. We must also help Main Street.”
The Main-Street-not-Wall-Street theme became central to Obama’s successful campaign. Indeed, there is a good case to be made that his ability to make the distinction is what elected him.
When McCain defended the Bush administration policy of slashing taxes for corporations — and crafting trade policies that actually encouraged the off-shoring of U.S. jobs — Obama ridiculed the formerly maverick Republican as an errand boy for the bankers and speculators.
Seizing on McCain’s reference to putting government at the service of big banks and big corporations as “simple fundamental economics,” Obama declared just days before the election: “My opponent may call that ‘fundamental economics,’ but we know that’s just another name for the Wall Street first, Main Street last.”
So, now, Obama is president.
What does he say?
Appealing to the Wall Streeters to help him advance a tepid reform plan, Obama struck a cautious tone that bore no resemblance to Franklin Delano Roosevelt’s Depression-era declaration that “Government by organized money is just as dangerous as Government by organized mob.”
Rather, Obama went out of his way to erase the lines of distinction between organized money on Wall Street and hurting Americans on Main Street.
“Ultimately, there is no dividing line between Main Street and Wall Street,” the president suggested in his speech at New York’s Cooper Union. “We rise or we fall together as one nation. So I urge you to join me — to join those who are seeking to pass these commonsense reforms. And I urge you to do so not only because it is in the interests of your industry, but because it is in the interests of our country.”
Obama wasn’t elected to coddle Wall Street.
He was elected to whip Wall Street into shape.
There’s not a real middleground here. Wall Street does not intersect Main Street.
The problem with the conciliatory rhetoric the president was spouting Thursday is that it denies the reality that Wall Street celebrates when Main Street stumbles. If there has been one economic constant across the past two decades (since the victory of the free-trade absolutists who backed the North American Free Trade Agreement and the extension of permanent most-favored-nation trading status to China) is has been this: The stock price for a corporation does not rise when the CEO announced that he is hiring; it rises when he announced that the company is shutting U.S. factories and laying off U.S. workers.
Wall Street bets against Main Street.
Wall Street champions corporations that open factories in foreign lands, not along the Main Streets of American cities.
Wall Street rewards banks that refuse credit to Main Street businesses, homeowners and small farmers.
This is not some theory. It is the fundamental economic reality of our times.
Indeed, as Vermont Senator Bernie Sanders explains: “We have got to make it crystal clear to Wall Street that the era of wild speculation and greed is over. We need a Wall Street which invests in the job creating productive economy, and not one that continues the unregulated gambling activities which have been so devastating to the middle class of our country.”
To suggest that the interests of Wall Street and Main Street are complimentary is absurd.
Candidate Barack Obama was right. If Main Street is going to thrive, Wall Street is going to have to change — fundamentally and permanently.
It’s like Bernie Sanders says: “With rampant unemployment and when small- and medium-size businesses are unable to obtain affordable credit, it is insane that our largest financial institutions continue to trade trillions in esoteric financial instruments which makes Wall Street the largest gambling casino in the world.”
The message Obama should have taken to Wall Street is the one that elected candidate Obama.
It is the message that Senator Sanders continues to deliver when he says, as Obama should have on Thursday, that: “Disgust at Wall Street is profound. The American people want us to change in a very profound way how Wall Street functions, and Congress must deliver.”