Late last week, I heard the news about J.P. Morgan’s staggering $2 billion in losses on the same day I read Matt Taibbi’s Rolling Stone article about the death of financial reform and Nick Confessore’s New York Times Magazine piece about President Obama’s fundraising on Wall Street. After reading these two articles in conjunction with the J.P. Morgan news, I could only come to one conclusion: it’s impossible to “reform” Wall Street if the president is dependent on the financial sector to bankroll his re-election campaign. The banks can be Obama’s friend or his enemy, but right now they can’t be both.
That’s why Obama should follow the lead of Elizabeth Warren and make Wall Street accountability a centerpiece of his re-election campaign. That would mean an end to the lavish fundraisers held by the titans of high finance (like the one last night), toughening and rigorously enforcing financial reform legislation and aggressively prosecuting Wall Street malfeasance. The banks would no doubt protest even louder than usual, but the public would heartily applaud. If the money dries up, so be it.
Obama stands the best shot at getting re-elected by making the election a choice between the 99 percent and the 1 percent, with Mitt Romney as the unabashed defender of the twenty-first-century robber barons. It’s easy to forget that the 1 percent, while overwhelmingly powerful in our political system, are by nature a tiny minority of voters. Thus, Obama’s core message should be about ensuring fairness and expanding opportunity for the 99 percent. But he won’t have the credibility to make such a message stick unless he jettisons what has been the albatross around his administration’s neck—the closeness between Washington and Wall Street.
Yesterday the Obama campaign unveiled a powerful new ad attacking Romney’s vulture capitalism at Bain Capital. Yet on that same night, Obama attended a fundraiser hosted by the president of the world’s largest private equity firm, the Blackstone Group. “Obama Hits Romney on Bain as He Raises Wall Street Money,” read a Bloomberg News headline. Republican gleefully amplified the story, branding Obama as an opportunistic hypocrite. Obama can’t afford another five months of headlines like that. Only by making clear to the public which side he’s on can the president consistently and convincingly paint Romney as Wall Street’s best friend. (Romney’s top five contributors are employees of Goldman Sachs, J.P. Morgan, Bank of America, Morgan Stanley and Credit Suisse.)