Monday Showdown: Obama vs. Big Banks
It appears that history is repeating itself when it comes to “wall street fat cats” and the banking industry’s exuberant bonus structure. While main street continues to suffer and unemployment remains at an insanely high 10%, big banks and financial giants are, once again, paying out outrageous sums to their corporate leaders. This time, however, President Obama hopes to do something about it.
In a recent CBS interview (shown below) the president says “people on Wall Street still don’t get it.”
Top executives from Goldman Sachs, JPMorgan Chase, Bank of America and Wells Fargo (among others) are expected to be in attendance during today’s meeting with the President. Although some executives from the banks are claiming this is simply a P.R. stunt postured by the white house, President Obama says he didn’t run for office “to be helping out a bunch of fat-cat bankers on Wall Street.”
An article released on Yahoo News today claims, “the President has real problems only the banks can help him solve. On jobs, housing and the strength of the economy, he needs bankers to change their behavior, and there’s only so much he can do to force them. So when he sits down with the financial industry Élite on Monday, he may talk tough, but he’ll also be asking for their help.”
Why does Obama need help from the banking industry?
For the economy to get back on track, the staggering unemployment figures need to dwindle. However, in order for this to happen increased lending from banks to small businesses needs to take place. And this is one of the messages Obama hopes to articulate to banking leaders today.
“One of the main messages from this meeting is that the financial industry received extraordinary help from the government – and ultimately the taxpayer – and now the industry has an obligation to help the small-business owners,” says White House spokesperson Jen Psaki.
Will today’s meeting amount to any real change within the banking industry?
December 14th, 2009 at 10:24 am
IF they’ve payed back the TARP money then the banks can do whatever they want with their profits – that’s capitalism
December 16th, 2009 at 10:04 am
ok so wall street is right. this is just a pr move by the administration there is no way that a motivational speach by our president is going to sway bankers to change policies but if the administration does a good enough job publicizing this meeting then the “people” will get behind the message and the bankers will have to listen. It is a good move by our president i am just no sure he knows why. That said bankers want to lend just as badly as small busineses want to be lended to they just want rules in place to prevent sole proprietorships like pressure washing companies from skipping out on their 5 figure debts. FIN
December 17th, 2009 at 3:12 pm
I totally agree with President Obama. Wall Street doesn’t get it. Performance should be based on how well the company does. Their bonuses should be tied into the stock price of the company and they should be paid in stock. Most of these “fat cats” on Wall Street caused a melt down by investing in crazy investments then got outrageous bonuses even when their company was about to implode. That’s just CRAZY!