Is President Obama’s Bloomberg interview his “fundamentals of the economy are strong” moment, or just a big misunderstanding? Already, his statement that he “doesn’t begrudge” Wall Street execs their megabonuses, and his comparison of big banker pay to that of Major League Baseball players (who by the way, didn’t bring the U.S. economy to its knees with their profligacy,) has prompted Paul Krugman to declare the president “clueless,” and MIT prof Simon Johnson to question whether the president even understands the difference between a free market and a bank-saddled one. The White House clearly feels the liberal criticism is undeserved, although I suspect that the Rahm Emanuel wing in the West Wing revels in criticism from the left out of a misguided belief that such attacks will help the president among independents. They put out a full transcript of the Bloomberg exchange in order to tamp down criticism, and to avoid the president looking out of step with middle America, which definitely agrees with the liberals on this one, while the president’s statement made it look like he is siding with the banks.
Personally, I think what’s going on is yet another manifestation of a fundamental problem with this presidency. President Obama is, I think by nature, a compromiser and temperature-diffuser. He likes to find consensus and avoid “drama” and conflict. Seated in the offices of Bloomberg, talking about their friends the bankers (only Maria Bartiromo loves Wall Street more,) Obama struck a friendly tone. That’s not smart politics, but it would be vintage Obama — never wanting to appear rude or unkind. It’s probably not the best trait for a president to have in these treacherous times, and the prez would probably do well to remember that politics is about defining yourself against an enemy. For Dubya, the enemy was “terrorism” — and he used that enemy to pivot himself into a position of unprecedented presidential power, cowing Congress (and from 9/11 up until those weapons of mass destruction weren’t found in Iraq, the media, too) in the process. For Obama, given what Bush left on his doorstep, the enemy the American people will rally around and against which he could easily pivot IS the banks. Everybody hates them. Nobody (but Bartiromo) trusts them. And the president would be wise to get on the right side of that populist tide. (Had he started the healthcare debate with a clear pivot against the insurance companies, they wouldn’t have so successfully mobilized mobs of oblivious town hall pawns to defend their interests.)
It’s not that Obama should irrationally attack Wall Street, or try to “bring it down” like one of those dinos in “Jurassic Park.” But saying he’s cool with big bank bonuses, even if that isn’t exactly what he was saying, (and even if he’s said the same thing before without causing controversy,) is kind of like saying “the fundamentals of the economy are strong” while Lehman was melting away.
At best, it’s bad PR. At worst, statements like the one the president made send a signal that the White House isn’t quite serious about fighting hard for financial regulatory reform — something a solid majority of Americans would rally behind. And given the president’s casual stewardship of healthcare reform, it’s really not a good sign. I wouldn’t go so far as to call the president “clueless,” and I don’t think the statement is the tornado that some others do, but it was an unforced error at a time when this White House can’t afford to mess up.
Related: David Paul Kuhn offers the president some really good advice.