Obama vs. Wall Street

“There was no cheering section” at President Obama’s speech to Wall Street Monday, said Andrew Ross Sorkin in The New York Times. The gathered “top echelon” of Wall Street bankers met the speech with “grimacing” faces and one round of applause. The best you can say is that the executives were “politely supportive” of Obama’s main points—the need for reform, new federal authority to wind down “too big to fail” banks, and a “systemic regulator.”

The big, important part of Obama’s speech, said Felix Salmon in Reuters, was his promise that “any future bailouts will have to be repaid—if not by the company being bailed out, then by its competitors.” That puts the entire financial industry on the hook and gives it strong incentive to act as the “eyes and ears” of a systemic-risk regulator. Maybe nothing comes of it, but at least “Barack Obama is (mostly) fighting on the side of the angels.”

Appealing to Wall Street’s “better angels” is “shockingly naïve,” said Arianna Huffington in The Huffington Post, when financial lobbyists are working overtime to gut any real reform. Obama said all the right things in his “heartfelt, well-intentioned” speech, but he’s “utterly misreading the opponents of reform,” and the opponents are winning.

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Reform legislation is certainly progressing slowly, said James Surowiecki in The New Yorker, but “there are a couple of reasons to not give up just yet.” The public still wants “meaningful reform” a year after the post–Lehman Brothers crisis, and at least the House will probably give it to them this year. It will be a hard fight for reform supporters, but “deciding in advance that we’re doomed to fail” would be a self-fulfilling mistake.