“They’ve created a narrative where irrational actions by a few people plus the nature of government intervention forced them to do things inconsistent with their free-market philosophy and regular way of handling their business,” offers a Democratic financier. “So, yes, they took the TARP money, but only because they had to. None of them are sitting there saying to themselves, ‘You know, I was responsible for this crisis. Therefore, I’m really grateful to the government that it stepped in.’ This is not the narrative they have in their heads.”
Interesting, gossipy piece in New York magazine about the relationship between Obama and Wall Street:
For Obama, Wall Street’s cluelessness is a source of intense frustration—“He’s like, ‘What the f*ck, you guys?’ ” says a White House official—and its ire toward him one of the cruelest paradoxes of his presidency. Rather than bowing to bailout rage or indulging the yearning for what Geithner calls “Old Testament justice,” Obama believes, justifiably, that he has taken a moderate approach to dealing with the financial system. On arriving in office, he chose to shore up the banks, not nationalize them. The regulations he has advocated aren’t punitive or radical. Despite the occasional burst of opprobrium, his stance has been one he summed up pithily at a meeting with the heads of the largest banks: “My administration is the only thing between you and the pitchforks.”
Yet now Obama stands accused by Wall Street of leading the pitchfork brigade, even as the soldiers in that battalion assail him for being in Wall Street’s pocket. Having labored to strike a delicate balance, he has managed to incur the wrath of both hoi polloi and the lords of finance. The political perils of this dynamic are obvious enough. And though the passage of regulatory reform may help assuage the anger of the masses, his relationship with Wall Street will be harder to mend—if mendable it proves to be.
[…] Though history will rightly note the role of the web in the fund-raising machine that Obama built during his campaign, in the early days Wall Street was more important, providing not just millions of dollars but start-up credibility. By Election Day, according to the Center for Responsive Politics, three of the top seven institutions in terms of bundled donations to Obama were New York megabanks: Goldman Sachs, Citigroup, and JPMorgan Chase, with UBS AG and Morgan Stanley a little further down in the top twenty.
In the course of collecting checks from the bankers, Obama began consulting several of them as informal advisers, notably Jamie Dimon, the CEO of JPMorgan Chase, and Robert Wolf, the CEO of UBS Group Americas. Over the September weekend when Lehman Brothers’ fate was decided in a marathon meeting at the New York Fed—run by Geithner, who was its president, Treasury Secretary Hank Paulson, and Fed chairman Ben Bernanke—it was Wolf who kept Obama informed, ducking out of the sessions to call the candidate on his cell phone.
I don’t want to quote too much from the very long piece (because you really should read all of it) but it’s informative and kind of fascinating, because it’s chock full o’unnamed sources stabbing each other in the throat.
Paul Krugman has already said he was misquoted.