Wall Street Weekly | 10/23/2009 12:30 pm
Brittle Obama Thrashes Wall Street: All Form, No Substance, by Liz Peek
What do we need right now? Soothing and encouraging leadership …
Image: Pete Souza/WhiteHouse.gov
Bears, Bulls, Chickens and Pigs: wOw’s Wall Street Weekly with Liz Peek (Week of 10/19)
Editor’s Note: Liz Peek is a financial columnist.Green shoots – economic or otherwise – need tender loving care to become young saplings. For the fragile sprouts that appeared last spring to bloom into a full-blown recovery, we need capital, demand and encouragement. While we have made some progress on funding and consumption, we are woefully lacking positive leadership. Instead, we have an administration that sows discord on every front, prompting Lamar Alexander – that most mild-mannered of senators – to liken President Obama to Richard Nixon, and not in a good way.
The Paulson-Geithner-Bernanke tag team did an admirable job fending off the collapse of the capital markets that loomed a year ago. (Remember when Treasury yields turned negative?) Sound companies are able to raise money and the steep yield curve promises a slow but steady recovery of banking profitability. The stock market has staged a convincing rally off the March lows with corporate profits beating the most pessimistic forecasts forged during last spring’s meltdown. Businesses, faced with an unprecedented slide in demand, slashed inventories and headcounts, effectively protecting their bottom line.
This is where we stand, and it is shaky ground. An enduring upturn in consumer confidence (which surprisingly slipped in October) and spending remains elusive. While business confidence is on the rise in Germany, France, China and elsewhere, expectations in the United States are wavering. Private equity managers tell me that only 30% or so of their companies are seeing any top-line growth, which is consistent with still-depressed consumer spending. Most are comfortable that the economy will grow at around 3% in the fourth quarter, as businesses stop running down inventories. Next year, though, growth may again falter if Americans can’t find jobs.
Unemployment is a threat not only to renewed spending, but to our country’s stability. Americans are angry – angry at Wall Street, angry at China, angry at Congress and anyone else thought responsible for the millions of jobs and homes lost. The most recent tally puts some 26 million people looking for full-time work, unemployment among teens is 26%, and among African American teens it’s 41%. How long before all that anger erupts?
We need soothing and encouraging leadership. Instead, we have an administration that has proven itself thin-skinned and vindictive, reminding many (including Mr. Alexander) of the paranoia of Richard Nixon. The attacks on insurers, on the Chamber of Commerce, on Fox News, on drug companies, on greedy bankers, on the poor schlub at the CBO whose estimates set back health-care legislation – on anyone and everyone who opposes Obama’s policies – are shocking and unsettling. Where is Obama the campaigner, who promised to bring the country together?
The administration has decided that it is politically expedient to fan the populist rage against Wall Street. To score points with Main Street, they have proposed to slash bankers’ pay, rather than undertake more meaningful but less splashy measures. Pay Czar Ken Feinberg’s draconian cuts in compensation for workers at the seven largest TARP recipients make for good headlines, but are of questionable value. Does anyone really think that preventing Bank of America from paying its top people competitively will strengthen the firm’s prospects? Instead of weathering the outcry that would have greeted paying Andrew Hall an agreed-upon bonus of $100 million, the administration pressed Citicorp to sell the extremely profitable trading operation that Hall worked for. Does lopping off a stellar unit benefit taxpayers, who now own 34% of Citigroup? Feinberg knows better; word on the Street is that Rahm Emanuel is directing this play, and it’s all about politics. Unfortunately, taxpayers will be the losers.
Read more about: Andrew Hall, Barack Obama, Business, Credit Suisse, Economy, Finance, Ken Feinberg, Ken Lewis, Lamar Alexander, Liz Peek, Morgan Stanley, News, Politics, Rahm Emanuel, Richard Nixon, Wall Street Weekly























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At a certain point, a president must own a presidency. For George W. Bush that point came eight months in, when 9/11 happened. From that point on, the presidency—all his decisions, all the credit and blame for them—was his. The American people didn’t hold him responsible for what led up to 9/11, but they held him responsible for everything after it. This is part of the reason the image of him standing on the rubble of the twin towers, bullhorn in hand, on Sept.14, 2001, became an iconic one. It said: I’m owning it.
Mr. Bush surely knew from the moment he put the bullhorn down that he would be judged on everything that followed. And he has been. Early on, the American people rallied to his support, but Americans are practical people. They will support a leader when there is trouble, but there’s an unspoken demand, or rather bargain: We’re behind you, now fix this, it’s yours.
President Obama, in office a month longer than Bush was when 9/11 hit, now owns his presidency. Does he know it? He too stands on rubble, figuratively speaking—a collapsed economy, high and growing unemployment, two wars. Everyone knows what he’s standing on. You can almost see the smoke rising around him. He’s got a bullhorn in his hand every day.
It’s his now. He gets the credit and the blame. How do we know this? The American people are telling him. You can see it in the polls. That’s what his falling poll numbers are about. "It’s been almost a year, you own this. Fix it."
The president doesn’t seem to like this moment. Who would? He and his men and women have returned to referring to what they "inherited." And what they inherited was, truly, terrible: again, a severe economic crisis and two wars. But their recent return to this theme is unbecoming. Worse, it is politically unpersuasive. It sounds defensive, like a dodge.
The president said last week, at a San Francisco fund-raiser, that he’s busy with a "mop," "cleaning up somebody else’s mess," and he doesn’t enjoy "somebody sitting back and saying, ‘You’re not holding the mop the right way.’" Later, in New Orleans, he groused that reporters are always asking "Why haven’t you solved world hunger yet?" His surrogates and aides, in appearances and talk shows, have taken to remembering, sometimes at great length, the dire straits we were in when the presidency began.
This is not a sign of confidence. Nor were the president’s comments to a New York fund-raiser this week. Democrats, he said to the Democratic audience, are "an opinionated bunch." They always have a lot of thoughts and views. Republicans, on the other hand—"the other side"—aren’t really big on independent thinking. "They just kinda sometimes do what they’re told. Democrats, ya’ll thinkin’ for yourselves." It is never a good sign when the president gets folksy, dropping his g’s, because he is by nature not a folksy g-dropper but a coolly calibrating intellectual who is always trying to guess, as most politicians do, what normal people think. When Mr. Obama gets folksy he isn’t narrowing his distance from his audience but underlining it. He shouldn’t do this.
But the statement that Republicans just do what they’re told was like his famous explanation of unhappy voters are people who "cling to guns or religion." (What comes over him at fund-raisers?) Both statements speaks of a political misjudgement of his opponents and his situation.They show a misdiagnosis of the opposition that is politically tin-eared. Politicians looking to win don’t patronize those they’re trying to win over.
But the point on the We Inherited a Terrible Situation and It’s Not Our Fault argument is, again, that it is worse than unbecoming. It is unpersuasive.
How do we know this? Through the polls. In all of the major surveys, the president’s popularity has gone down the past few months. A Gallup Daily Tracking Poll out this week reported Mr. Obama’s job approval dropped nine points during the third quarter of this year, that is between July 1 and Sept. 30, when it fell from 62% to 53%. It was the biggest such drop Gallup has ever measured for an elected president during the same period of his term. A Fox News poll out Thursday showed support for the president’s policies falling below 50% for the first time. Ominously for him, independents are peeling off. In 2006 and 2008 independents looked like Democrat. They were angry and frustrated by the wars, they sought to rebuke the Bush White House. Now those independents look like Republicans. They worry about joblessness, debts and deficits.
The White House sees the falling support. Thus the reminder: We faced an insuperable challenge, we’re mopping up somebody else’s mess.
The Democratic Party too sees the falling support, and is misunderstanding it. The great question they debated last week was whether the president is tough enough: Does he come across as too weak? It is true, as the cliché has it, that it’s helpful for a president to be both revered and feared. But this president is not weak, that’s not his problem. He willed himself into the presidency with an adroit reading of the lay of the land, brought together and dominated all the constituent pieces of victory, showed and shows impressive self-discipline, seems in general to stick to a course once he’s chosen it, though arguably especially when he’s wrong. His decision to let Congress write a health-care bill may yield at least the appearance of victory. And if Mr. Obama isn’t twisting arms like LBJ, and then giving just an extra little jerk to snap the rotator cuff just for fun, the case can be made that day by day he’s moving the Democrats of Congress in the historic direction he desires. All his adult life he’s played the long game, which takes patience and skill.
The problem isn’t his personality, it’s his policies. His problem isn’t what George W. Bush left but what he himself has done. It is a problem of political judgement, of putting forward bills that were deeply flawed or off-point. Bailouts, the stimulus package, cap-and-trade; turning to health care at the exact moment in history when his countrymen were turning their concerns to the economy, joblessness, debt and deficits—all of these reflect a misreading of the political terrain. They are matters of political judgment, not personality. (Republicans would best heed this as they gear up for 2010: Don’t hit him, hit his policies. That’s where the break with the people is occurring.)
The result of all this is flagging public support, a drop in the polls, and independents peeling off.
In this atmosphere, with these dynamics, Mr. Obama’s excuse-begging and defensiveness won’t work.
Everyone knows he was handed horror. They want him to fix it.
At some point, you own your presidency. At some point it’s your rubble. At some point the American people tell you it’s yours. The polls now, with the presidential approval numbers going down and the disapproval numbers going up: That’s the American people telling him.
http://online.wsj.com/article/SB10001424052748704224004574489530713762884.html
Callie — I love reading Peggy Noonan! And, I have come to respect the articles in the Wall Street Journal. And, I agree, this is an awesome post.
If gold stars were given out tonight - Peggy and Liz - hurrah!
Glenda - glad to see you back.
Just heard some disturbing news. Apparently this administration is extending its salary control into even financial institutions which did NOT take any bailout funds. Now that’s scary!
Apparently they’ve decided to set up their own criteria, and have businesses pay what the government deems proper.
This is not America. This is already communist China.
When you pray, don’t forget your country.
Phyllis…..I was just thinking that perhaps I need my glasses changed. I didn’t read the same numbers related to Obama’s disapproval numbers as stated in this thread. The 10-21-09 approval rating numbers I read indicate the overall numbers went up to 57% of those who still continue to support his general positions. Sure there may be segments within the numbers which are lower, but the overall is what counts. I think some might be pulling out the lower numbers without documenting this is one section of what makes up the total approval poll numbers.
Relative to the economy and the lack of improvement… I sure know that when my bank account goes down, it takes me quite a while to build up the numbers. If some people have ideas that will make the economy magically get better in a short period of time I hope they tell the administration their thoughts…and, I wonder if the same people have magic ways of fixing/building up my bank account in a matter of a few short months.
I loved that Obama’s appearance on David Letterman drew the largest audience in 4 years. As President Obama eluded to, you can’t please everyone on all things all the time. Just like a marriage….ups and downs every step of the way.
A couple of days ago while watching the television, the newscaster indicated only 20% of republicans still claim to be republicans which is a 26 year low according to some other web sites commenting on this 20% figure. That is just astounding. From reading the posts, I thought the number would be more like 50 or 60% would claim to be republicans.
Thanks for doing such great posts.
It was also noted by another newscaster that 20% of Republicans still claim to be Republicans, however, there are many of those that professed to be Republicans who now call themselves Conservatives. And, that the Conservative numbers were growing. To me, THAT is astounding. He also was reporting that the Independents who voted for Obama were pulling away and were also leaning toward a more conservative bend.
I want to commend all of the ladies on here who bend to the right - whether it be Republican, Independent or Conservative, I salute you on your posts. It is encouraging to see that there are so many on this thread who truly think as I do.
And to Liz Peek — just keep these wonderful articles coming!
About your bank account, Rainbow…when it goes down do you work at fixing it by an immediate spending spree? Maybe spending more than your whole family has for years?
Not likely, and that’s been the response to our national debt and budget deficits from Washington.
You’re right that there’s no magic in rebuilding your bank account. Just plain ol’ belt-tightening and careful living. And that’s all we’re asking the administration and the Congress to do.
So far they’re not listening.
Obama vs. The President He Said He’d Be
By Tom Bevan
During the campaign Barack Obama vowed he would be a different kind of leader who would move America beyond the "smallness of our politics." That inspired promise was not an insignificant part of why he was elected last November.
In his inaugural address Obama told us that "the time has come to set aside childish things." He promised to bring "an end to the petty grievances and false promises, the recriminations and worn out dogmas, that for far too long have strangled our politics."
Not only has President Obama failed to live up to those promises so far, it appears that on more than a number of occasions he’s made a conscious decision to break them.
In the first nine months in office President Obama and/or members of his administration have accused doctors of performing unnecessary medical procedures for profit; demonized bond holders as "speculators;" produced a report suggesting military veterans are prone to becoming right wing extremists; attacked insurance companies and threatened them with legislative retribution; ridiculed talk show hosts and political commentators by name from the White House podium; dismissed and demeaned protesters and town hall attendees as either unauthentic or fringe characters; maligned a white police officer for arresting a black man without knowing the facts of the case; launched an orchestrated campaign to marginalize the country’s biggest pro-business group; and publicly declared war on a news organization
Twice in the last week, perhaps carried away by the campaign atmosphere, President Obama ramped up the use of the kind of partisan rhetoric that will drive Americans further apart; once in San Francisco at a DNC fundraiser and once last night at a rally for Jon Corzine.
As a result of this strategy, President Obama’s approval rating has fallen consistently since taking office while Americans’ disapproval of the way he’s handled his job has more than doubled and is now at an all time high of 44 percent. On Wednesday Gallup reported that the 9-point drop in Obama’s approval rating between July and September was the third most precipitous decline in Presidential history and the worst since 1953.
Americans understand it’s not easy governing a country as divided as ours. It takes hard work to find common ground in a system that’s been increasingly polarized, and it takes political courage for a President to buck the interests of the base of his party when necessary. More than anything else, achieving real bipartisanship requires a good faith effort led by the President that genuinely seeks compromise with the opposition without demonizing, dismissing, or demeaning them.
In fact, that’s exactly how then candidate Obama described his vision of "genuine bipartisanship" in his book, The Audacity of Hope. Obama wrote on page 131:
Genuine bipartisanship, though, assumes an honest process of give-and-take, and that the quality of the compromise is measured by how well it serves some agreed-upon goal, whether better schools or lower deficits. This in turn assumes that the majority will be constrained - by an exacting press corps and ultimately an informed electorate - to negotiate in good faith. If these conditions do not hold - if nobody outside Washington is really paying attention to the substance of the bill, if the true costs of the tax cut are buried in phony accounting and understated by a trillion dollars or so - the majority party can begin every negotiation by asking for 100 percent of what it wants, go on to concede 10 percent, and then accuse any member of the minority party who fails to support this "compromise" of being "obstructionist."
Though Obama wrote that as a member of the minority and a critique of past policies, it sounds eerily familiar to what’s going on in Washington right now.
Hundreds of billions of dollars in Medicare savings are promised - savings that we’re told cannot occur without voting for a total overhaul of the health care system. Hundreds of billions more have been offloaded in a budget gimmick to make the bill appear less costly than it really is so it will comply with the President’s promise not to add a dime to the federal deficit. Substantive measures proposed by the opposition that would seem to be common sense to include in a "comprehensive" effort - like medical malpractice reform - have been given short shrift.
Lastly, promises of transparency have fallen by the wayside. The reform the President promised would be fully open to the public is now being written by a tiny cadre behind closed doors on Capitol Hill, and Democrats in Congress are resisting a rules change that would allow the bill to be posted online 72 hours before a vote so the public might have a chance to see exactly what it is their elected representatives are voting on.
Voters expect politicians to say one thing and do another. But Obama took the public’s cynicism and turned it to his advantage by vowing he would be a different kind of leader. So far, however, he is falling well short of his promises, using tactics and rhetoric not only drive Americans apart but hurt him politically. It’s time for Obama start acting like the President he told us he’d be.
http://www.realclearpolitics.com/articles/2009/10/23/obama_vs_the_presid…
S.J. Morgan - well said.
The fourth paragraph, beginning In the first nine months … is heartbreaking. Those of who voted for John McCain and Sarah Palin did maintain some hope that Obama could, and would, keep to his promise to end the political bickering and gamesmanship in the Capitol. He is failing fast…. faster than even George Bush who at least made some legislative accomplishments during his first months in office. He personally reached out to Senator Kennedy. Obama reaches out to nobody except the Speaker and Senator Reid, who can barely tolerate each other, and who from the first days in the majority refused to include the Republican minority in major decisions for the country. Obama is already a sad President and soon will be sad and lonely President when he finally (and probably too late) accepts his responsibility as Commander-in-Chief and answers his General’s appeal for more troops. He will then lose much of his support from the far LEFT … the home where Obama is most comfortable.