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Fat cats and kabuki
President Obama has invited a dozen bank executives to the White House today for a little chat. He intends to scold and implore them, but the bankers know what’s coming, and they’re not buying it.
Here’s what the president said in a 60 Minutes interview last night:
“I did not run for office to be helping out a bunch of fat cat bankers on Wall Street. They’re still puzzled why it is that people are mad at the banks. Well, let’s see, you guys are drawing down $10 [million], $20 million bonuses after America went through the worst economic year that it’s gone through in — in decades, and you guys caused the problem. And we’ve got 10% unemployment.”
Obama’s expected to push banks to lend more money, but the bankers plan to resist. From AP:
“He can say what he wants, but we’re not going to go back to the kind of lending that put us in this mess,” said a person who is helping prepare executives for the meeting…
One industry official said Obama is viewed as trying to paint the debate as either “You’re with us or you’re against us.” The industry official said bankers did not view it that simply.
“We want him to know we have the same goals, but disagree about how to get there,” the official said.
For example, bankers don’t like the new consumer agency being proposed. Apparently, they’re going to offer the president some alternatives. What, I don’t know.
This is a frustrating tug of war. The government seems to want the country to go back to over-consuming, at least in the short term, to get the economy back on track. The banks are acting like financial prudes, an over-reaction to their reckless behavior of recent memory.
In the end, the meeting is probably just kabuki. From USA Today:
The meeting is nothing more than “political theater,” said Virginia-based banking consultant Bert Ely…
High unemployment is creating a political problem for Obama’s team and “they’re trying to make political points whenever they can,” Ely said.
Meanwhile, Citigroup announced its plan for getting out of TARP. Current shareholders get diluted, as I mentioned on Friday. These guys better know what they’re doing leaving TARP. There is no next time?
Watch the 60 Minutes piece here: