Louis Proyect
Mon, 30 Aug 2010 06:16:54 -0700
http://www.huffingtonpost.com/david-bromwich/wall-streets-obama-invest_b_470234.html Wall Street's Obama Investment
by David Bromwich
Professor of Literature at Yale
A remarkable passage of John Heilemann and Mark Halperin's Game
Change has not drawn the attention it deserves. Near the end of
the book, the authors discuss a series of conversations in
September-October 2008 -- just after the demise of Lehman Brothers
-- between Barack Obama and the financial counselors of the Bush
administration: Bernanke, Paulson, and others. The talks were
initiated by Obama. Once the contact was there, he did not let go.
Here is the relevant paragraph of Game Change (pp. 380-81):
Obama was talking regularly with Fed chair Ben Bernanke and
daily, sometimes more often, with Paulson. The treasury secretary
was astonished by the candidate's level of engagement. On one
occasion, Obama kept his plane on the tarmac for a half hour after
the final event of his day, with a long flight ahead of him, so he
could finish a conversation with Paulson. On another, Obama called
Paulson late at night at home and spent two hours discussing the
intricate details of regulatory reform. As much as the
substantiveness of the discussions struck Paulson, so did their
sobriety and maturity. I'll be there publicly for you at any time,
Obama told him. I'm going to be president, and I don't want to
inherit a financial system that's collapsed.
Obama has been true to his word. He has been there for them
publicly at any time. He has supported their story of the collapse
(a story without villains, and almost without actors) and accepted
their recommendations on the proper limits of the remedy.
The phone call with Paulson on the tarmac is only an incident, of
course; but it leads directly to the climax of Game Change: the
bipartisan White House summit called by John McCain -- an
emergency meeting on the economy, at which McCain's dismal
performance marked the end of his hopes for victory in November.
Heilemann and Halperin strengthen the lights and shadows by
remarking a contrast between McCain's apathetic demeanor and the
perfect command exhibited on this occasion by Barack Obama. He had
prepared in an obvious way, arranging with Democratic lawmakers to
speak for the party -- something McCain neglected to do with
Republicans. But we now know that Obama did more than perform
well; he took over the meeting. It was he who eventually said (as
if from the chair): "Can I hear from Senator McCain?"
Obama's self-possession and exquisite timing -- not consistent
traits of his political character -- had a traceable source. He
had been schooled for anything that might come at the White House
by his conversations with Bernanke, Paulson and the rest. As for
President Bush, his attitude toward McCain appears to have been a
mixture of bafflement and irritation; it seems likely, on the
evidence offered by Heilemann and Halperin, that he wanted Obama
to be his successor. But that is another and perhaps a smaller story.
One explanation of the Obama-Paulson talks is suggested by Thomas
Ferguson's "investment theory of party competition." Indeed, that
theory unassisted will account for much of what we have seen in
the new president's fiscal and economic policies. Big money tends
to buy the winning candidate, and the buyers get what they paid
for. The banks and the investment houses convincingly supported
Obama over McCain, and in the process spent more money than has
ever gone to a single candidate. It is only because the
Republicans are covetous of taking Wall Street back from Obama
that they have stayed clear of the usual target of populism, the
conduct and mores of Wall Street itself.
There can be no doubt that Obama believed the story Paulson
recounted to him. But he also wanted Paulson to know that he
believed it: that was the meaning of the follow-up calls. How then
could he have refused Paulson's probable idea -- seconded by
Lawrence Summers -- of the only person qualified to succeed him as
secretary of the treasury?
Once Obama had shown his nerve at that White House meeting and
measured the upshot by the size of the victory in November, it was
natural for him to feel gratitude toward those who had done so
much and so recently to make it possible. And yet -- this is the
insight afforded by Heilemann and Halperin -- long before the
reasons for gratitude were apparent, the reforming candidate who
spoke with such passion against inequality had bestowed on the
great houses of Wall Street his implicit trust and reliance.
And how did they see him? Above all, as a less unstable character
than McCain. That was the common view; and what student of human
nature will deny its truth? Yet in the weeks before the election,
Barack Obama took care to supply his powerful supporters with
additional assurance.
The influence of money is seldom a matter of money alone. When
Obama first spoke to Paulson in the depth of the crisis of 2008,
something besides talk was passing between them. Such pacts, which
begin in confidence, are sealed by affection. The new president in
2009, when he looked back on the averted catastrophe and asked for
a second trillion to put in the pipeline, may have looked more
coolly at the role the bankers played; he may even have thought as
Housman did of an army of mercenaries:
They stood, and earth's foundations stay;
What God abandoned, these defended,
And saved the sum of things for pay.
But not all his thoughts are likely have been so unsentimental.
The connection between a politician and the financial interests
that secure him are deeper than mere utility or selfish purpose.
When Obama says of Lloyd Blankfein and Jamie Dimon, "I know both
those guys; they are very savvy businessmen" -- with artless pride
in the fact that he moves in their circles -- we are a long way
from John Kennedy during the steel crisis of 1962, after U.S.
Steel announced an across-the-board price increase: "My father
always told me that all businessmen were sons-of-bitches, but I
never believed it till now." No, Barack Obama would never say such
a thing because he would never think such a thing. It is not that
he is in their pocket. They are in his heart.
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