Mr. Obama is the Lance Armstrong of presidents.
“With the rise of Obama,” the question became, “Could Washington really change?” [Mark] Leibovich writes. “No more lobbyists in the White House, or ‘politics as usual,’ or tending to the needy oracles of Beltway groupthink.” He includes many self-righteous quotes from Obama aides Dan Pfeiffer (“We did not do ‘cocktail party’ interviews”), David Plouffe (“If Politico and [Time magazine’s Mark] Halperin say we’re winning, we’re losing”) and Robert Gibbs (“We believe this isn’t about us. It’s about something bigger”).
“Obama himself vowed that his administration would steer clear of other corroding Beltway forces” of celebrity and self-dealing, he writes. Those working on Obama’s transition staff in 2008 were made to sign a “no ego, no glory” memo.
Then it became all ego and glory.
“…since the disclosures last week showing that the agency does indeed routinely collect data on the phone calls of millions of Americans, Obama administration officials have struggled to explain what now appear to have been misleading past statements. Much of the attention has been focused on testimony by James R. Clapper Jr., the director of national intelligence, to the Senate in March that the N.S.A. was not gathering data on millions of Americans.”
Before “sequestration” took effect, the Obama administration issued specific — and alarming — predictions about what it would bring. There would be one-hour waits at airport security. Four-hour waits at border crossings. Prison guards would be furloughed for 12 days. FBI agents, up to 14.
At the Pentagon, the military health program would be unable to pay its bills for service members. The mayhem would extend even into the pantries of the neediest Americans: Around the country, 600,000 low-income women and children would be denied federal food aid.
But none of those things happened.
…Sequestration did hit, on March 1. And since then, the $85 billion budget cut has caused real reductions in many federal programs that people depend on. But it has not produced what the Obama administration predicted: widespread breakdowns in crucial government services.
The administration has now lost all credibility on this issue. Mr. Obama is proving the truism that the executive branch will use any power it is given and very likely abuse it. That is one reason we have long argued that the Patriot Act, enacted in the heat of fear after the Sept. 11, 2001, attacks by members of Congress who mostly had not even read it, was reckless in its assignment of unnecessary and overbroad surveillance powers.
Technically, you don’t have to be related to an Obama adviser to get a job in this administration. But as he staffs top posts for his second term, the president is creating an incestuous arrangement. With few exceptions, loyalists and friends are being promoted, with little new blood admitted at the highest levels. The man who boasted about creating a “team of rivals” in his first term has this time been circling the wagons so tightly that people are bound to get motion sickness.
WASHINGTON — Michael Froman, a longtime White House economic aide nominated to be President Obama’s trade representative, holds close to $500,000 in the Cayman Islands and received millions of dollars to divest himself from Wall Street accounts that rely on a tax loophole the administration has sought to close.
Now you might argue this is all strange, but it’s possible. After all Columbia says he graduated. And I take my college’s word for it. Would one of the world’s greatest Ivy League institutions participate in a coverup, thereby risking their billion dollar reputation? And there is one single article written for the Columbia newspaper with Obama’s name on it. A single photo also exists of Obama in his Manhattan apartment with the man he claims was his college roommate- a Pakistani foreign student. And one single radical leftist Columbia professor who hates Israel also claims he remembers Obama.
That’s the sum total of Obama’s existence at Columbia University, Class of ’83.
…In the speech, as always, Obama came off as sober and measured. Those qualities are necessary but not sufficient for a successful presidency. That requires a chief executive skilled not only in spotting issues but also in crafting solutions and driving them to a successful conclusion — yes, even in the face of an uncooperative, even irrational opposition.
Trust means confidence. In order to be a leader, those who follow, require confidence.
Column: Mounting controversies are all about trust
Jun 10, 10:51 AM (ET)
By LIZ SIDOTI
WASHINGTON (AP) – As a candidate, Barack Obama vowed to bring a different, better kind of leadership to the dysfunctional capital. He’d make government more efficient, accountable and transparent. He’d rise above the “small-ball” nature of doing business. And he’d work with Republicans to break Washington paralysis.
You can trust me, Obama said back in 2008. And – for a while, at least – a good piece of the country did.
But with big promises often come big failures – and the potential for big hits to the one thing that can make or break a presidency: credibility.
A series of mounting controversies is exposing both the risks of political promise-making and the limits of national-level governing while undercutting the core assurance Obama made from the outset: that he and his administration would behave differently.
The latest: the government’s acknowledgement that, in a holdover from the Bush administration and with a bipartisan Congress’ approval and a secret court’s authorization, it was siphoning the phone records of millions of American citizens in a massive data-collection effort officials say was meant to protect the nation from terrorism. This came after the disclosure that the government was snooping on journalists.
Also, the IRS’ improper targeting of conservative groups for extra scrutiny as they sought tax-exempt status has spiraled into a wholesale examination of the agency, including the finding that it spent $49 million in taxpayer money on 225 employee conferences over the past three years.
At the same time, Obama’s immigration reform agenda is hardly a sure thing on Capitol Hill, and debate starting this week on the Senate floor is certain to show deep divisions over it. Gun control legislation is all but dead. And he’s barely speaking to Republicans who control the House, much less working with them on a top priority: tax reform.
Even Democrats are warning that more angst may be ahead as the government steps up its efforts to implement Obama’s extraordinarily expensive, deeply unpopular health care law.
Collectively, the issues call into question not only whether the nation’s government can be trusted but also whether the leadership itself can. All of this has Obama on the verge of losing the already waning faith of the American people. And without their confidence, it’s really difficult for presidents to get anything done – particularly those in the second term of a presidency and inching toward lame-duck status.
The ramifications stretch beyond the White House. If enough Americans lose faith in Obama, he will lack strong coattails come next fall’s congressional elections. Big losses in those races will make it harder for the Democratic presidential nominee in 2016, especially if it’s Hillary Rodham Clinton, to run as an extension of Obama’s presidency and convince the American public to give Democrats another four years.
Obama seemed to recognize this last week. He emphasized to anxious Americans that the other two branches of government were as responsible as the White House for signing off on the vast data-gathering program.
“We’ve got congressional oversight and judicial oversight,” Obama said. “And if people can’t trust not only the executive branch but also don’t trust Congress and don’t trust federal judges to make sure that we’re abiding by the Constitution, due process and rule of law, then we’re going to have some problems here.”
The government is an enormous operation, and it’s unrealistic to think it will operate smoothly all of the time. But, as the head of it, Obama faces the reality of all of his successors: The buck stops with him.
If the controversies drag on, morale across America could end up taking a huge hit, just when the mood seems to be improving along with an economic uptick. Or, Americans could end up buying Obama’s arguments that safety sometimes trumps privacy, that his administration is taking action on the IRS, and that he’s doing the best he can to forge bipartisan compromise when Republicans are obstructing progress.
Every president faces the predicament of overpromising. Often the gap can be chalked up to the difference between campaigning and governing, between rhetoric and reality. As with past presidents, people desperate to turn the page on the previous administration voted for the Obama they wanted and now are grappling with the Obama they got.
From the start of his career, Obama tried to sculpt an almost nonpartisan persona as he spoke of bridging divides and rejecting politics as usual. He attracted scores of supporters from across the ideological spectrum with his promises to behave differently. And they largely believed what he said.
Back then, he held an advantage as one of the most trusted figures in American politics.
In January 2008, Obama had an 8-point edge over Clinton as the more honest and trustworthy candidate in the Democratic primary. That grew to a 23-point advantage by April of that year, according to Washington Post-ABC News polls. Later that year, the Post-ABC poll showed Obama up 8 points on Republican nominee John McCain as the more honest candidate.
Obama held such strong marks during his first term, with the public giving the new president the benefit of the doubt. Up for re-election, he went into the 2012 campaign home stretch topping Mitt Romney by 9 points on honesty in a mid-October ABC/Post poll.
But now, that carefully honed image of trustworthiness may be changing in Americans’ eyes.
A Quinnipiac University poll conducted late last month found 49 percent of people consider Obama honest and trustworthy, a dip from the organization’s last read on the matter in September 2011 when 58 percent said the same. He also has taken a hit among independents, which used to be a source of strength for him, since his second-term controversies have emerged. Now just 40 percent say he is honest and trustworthy, down from 58 percent in September 2011.
Obama has waning opportunities to turn it around. He’s halfway through his fifth year, and with midterm elections next fall, there’s no time to waste.
If he can’t convince the American people that they can trust him, he could end up damaging the legacy he has worked so hard to control and shape – and be remembered, even by those who once supported him, as the very opposite of the different type of leader he promised to be.
Joe Scarborough Rips Obama’s Tax Rate: ‘Hypocrisy Was Mind-Boggling’ (VIDEO)
“Barack Obama has been championing raising taxes on small business owners for years and he’s paying 18% in taxes because raising those taxes don’t affect him,” Scarborough alleged. “And he talks about fairness?!”
Lawrence O’Donnell: Obama’s Tax Rate ‘In the High Twenties’; Nope! Try 18.4%
It really is amazing how liberal media members regularly make false statements on national television with total impunity.
Consider MSNBC’s Lawrence O’Donnell who twice on HBO’s Real Time Friday arrogantly claimed that the Obamas’ federal income tax rate was “in the high twenties” (video follows with transcribed lowlights and commentary):
Obamas’ falling tax rate
President Barack Obama and his wife, Michelle, paid the lowest effective tax rate since they moved into the White House by taking advantage of the most popular — and expensive — benefits in the tax code.
Tax returns released by the White House on Friday show that the Obamas paid an effective tax rate of 18.4 percent on more than $608,000 in adjusted gross income earned in 2012. Last year, their rate was 20.5 percent.
Speaking to reporters aboard Air Force One, Obama campaign spokeswoman Jen Psaki said Romney’s release confirmed “he pays a lower rate than most middle class families because of complex loopholes and tax shelters, and raised more questions that provided answers.”
“My opponent thinks it’s fair that somebody who makes $20 million a year like him pays a lower rate than a cop or a teacher who makes $50,000,” he said. “Look, I just disagree. I don’t think that’s fair.”
Once again, we can’t know exactly what percentage of Americans paid a higher effective tax rate than Romney’s 14 percent, but the top two ranges, plus a significant share of the middle group, most likely did. So probably more than half exceeded Romney’s rate, making the Obama ad accurate.
Can 44 Subtract 43 From the Equation?
By MAUREEN DOWD
Published: May 25, 2013
DALLAS — DO we dare to hope that the Bush administration is finally at an end?
After four years of bending the Constitution, the constitutional law professor now in the White House is trying to unloose the Gordian knot of W.’s martial and moral overreaches after 9/11.
Safely re-elected, President Obama at long last spoke bluntly about the Faustian deals struck by his predecessor, some of them cravenly continued by his own administration.
In a speech at the National Defense University, Obama talked about how we “compromised our basic values,” and he concluded with a slap at W.: “Our victory against terrorism won’t be measured in a surrender ceremony at a battleship or a statue being pulled to the ground.”
On the eve of the president’s speech, I was at the George W. Bush Presidential Library and Museum here, watching the film of Saddam’s statue being pulled to the ground.
It’s remarkable that Obama is trying to escape the shadow of the Bush presidency just as W. is trying to escape the shadow of the Bush presidency. Browsing the library, you wonder if these two presidents are complete opposites after all, as you see how history was shaped by an arrogant, press-averse, father-fixated, history-obsessed, strangely introverted chief executive.
Robert Draper, the author of “Dead Certain: The Presidency of George W. Bush,” perused the library with me and observed: “So 43 grew up entitled but could display a commoner’s touch, while 44 grew up hardscrabble yet developed this imperial mien. The former is defined by incuriosity, the latter by self-absorption. One is a late-blooming artist, the other a precocious writer. They can each make you kind of miss the other.”
Obama’s compelling speech on Thursday was his way of saying he didn’t want the seductive but morally dicey drone program he inherited from W. to define his own presidency. The way it had been going, one of the killer robots, hanging from the ceiling, might have made a fitting centerpiece for an Obama library.
W.’s library highlights his role in launching the Global War on Terror, an Orwellian phrase designed to conflate the sins of Osama, who was responsible for 9/11, and the sins of Saddam, who was not. That was the fatal mistake and hallmark of the Bush era. W., Dick Cheney and Donald Rumsfeld declared war on a tactic, stoked fear as a smokescreen and treated pre-emptive attacks as just.
Better late than never, Obama brought his lapidary logic and legal cautions to bear. “Neither I nor any president can promise the total defeat of terror,” he said. “We will never erase the evil that lies in the hearts of some human beings nor stamp out every danger to our open society.”
Conservatives can honk, as Senator Saxby Chambliss did, that Obama’s speech “will be viewed by terrorists as a victory.” But this president has killed more top Qaeda operatives than Bush did. While W.’s bullhorn vow after 9/11 to catch the “people who knocked these buildings down” plays every few minutes at his library, I couldn’t find any photos of Osama or acknowledgment of Bush’s failure to catch him. Obama’s library will have a wing for that feat.
You could fill an entire other library with what’s not in W.’s. Cheney and Rummy have been largely disappeared, and it is Condi Rice who narrates the 9/11 video. You won’t see the iconic “Mission Accomplished” photo, or that painful video in which W. keeps reading “The Pet Goat” to children after learning that America is under attack, or the notorious “flyover” photo of a desultory Bush jetting from Crawford to the White House and looking through the window of Air Force One at Katrina’s devastation.
Decision Points Theater — a whiny “Well, you try being the Decider” enterprise — lets you make the decisions after getting taped briefings on W.’s crises from actors playing experts. But it is rigged with so many false binary options that the visitors I voted with ended up agreeing with Bush’s patently wrong calls on Iraq and Katrina.
Mostly, aside from the word “freedom” reverberating endlessly, we see the kinder, gentler W. conjured by Laura the Librarian. The once-shielded twins are ubiquitous, as is Barney. (An interactive game lets you help Barney find his ball.)
The big display on W.’s stellar record on AIDS in Africa features a letter from the president on White House stationery with the salutation, “Yo Bono!”
You can be forgiven for thinking you’ve wandered into the Gore presidential library when you come upon a wall devoted to protection of the ocean and odes to “vital wetlands” and “marine habitats.” Who knew W. was passionately on the side of the humphead parrotfish?
Proving that the library is more a monument to Laura’s artful airbrushing than W.’s artless leadership, there’s a swank Café 43 with fancier fare than W.’s cherished PB&J’s, and a gift shop featuring Laura’s favorite books, from Dostoyevsky’s “Brothers Karamazov” to Truman Capote’s “Music for Chameleons.”
W. missed a bet not selling reproductions of his charming nude self-portraits and Barney paintings on posters, T-shirts and dog bowls. Far more interesting than packets of Texas bluebonnet seeds.
Where money talks
By Dana Milbank, Published: May 24
Call it the revenge of the 1 percent.
President Obama bested Mitt Romney by portraying his Republican opponent as a rich businessman who used offshore tax havens and ran enterprises into the ground without regard for working people.
On Thursday, senators held a confirmation hearing for Obama’s nominee to be commerce secretary: a billionaire who benefits from offshore tax havens, whose family owned a failed savings and loan and who is accused by unions of mistreating workers.
Turns out the wealthy didn’t lose the 2012 election; rather, the Republican rich lost to the Democratic rich.
This is not to question the qualifications of Penny Pritzker, the Hyatt hotels heiress and Democratic mega-donor Obama nominated. I suspect she’ll be a fine commerce secretary when she is confirmed, as she surely will be.
But her confirmation hearing was a reminder of how wealth is power in Washington. A multimillionaire president nominated a billionaire who raised hundreds of thousands of dollars for his campaigns, and he sent her to be confirmed by the millionaires’ club that is the U.S. Senate.
“You will certainly have my vote,” commerce committee Chairman Jay Rockefeller (average estimated net worth: $103 million, according to the Center for Responsive Politics) assured the nominee (net worth $1.85 billion, according to Forbes).
“My hope,” said Virginia Democratic Sen. Mark Warner ($228 million), is that “this committee will recommend you.”
Missouri Democratic Sen. Claire McCaskill ($22 million) told Pritzker, “I find it very refreshing to find someone who is stepping up like you are in this position.”
Another committee member, Sen. Richard Blumenthal of Connecticut ($100 million), didn’t speak at the hearing but issued a statement calling the heiress “a longtime friend with a lifetime of business experience and acumen that will serve her well.”
There wasn’t a mention during the two-hour hearing that the nominee had recently informed the committee that because of a “clerical error,” she omitted more than $80 million in income from the financial disclosures she filed.
The hearing was in its closing minutes before anybody mentioned the tax havens. The ranking Republican, Sen. John Thune of South Dakota, did so almost apologetically, saying he was “going to channel Sen. [Chuck] Grassley,” a Republican who is not on the committee, who had said it would be “hypocritical” not to press Pritzker on “the kind of tax avoidance activity that the president dismisses as fat-cat shenanigans for others.”
“I am the beneficiary of offshore family trusts that were set up when I was a little girl,” the nominee replied. “I didn’t create them. I don’t direct them.” Neither Thune nor anybody else followed up on her 70-word answer, and the family’s stake in the failed S&L got similar treatment from Thune.
The audience was packed with Hyatt workers in red shirts and baseball caps representing Unite Here, a hotel-workers union that opposes Pritzker’s confirmation on grounds that Hyatt has “a broad pattern of labor abuses, including aggressive outsourcing, low wages and the mistreatment of housekeepers.”
But the only senator to mention the union complaint was Sen. Maria Cantwell (D-Wash.), who appeared content with Pritzker’s assurance that she has a “good relationship” with labor before they moved on to discuss what the nominee called “the importance of salmon.”
Republicans probably went easy on Pritzker because they saw her as the most pro-business appointee they’re likely to get from a Democrat. And Democrats weren’t about to give an ally a hard time.
Pritzker and her husband have donated nearly $1 million to federal candidates since 1990, almost all to Democrats, according to the Center for Responsive Politics, which tracks campaign finance. She raised at least $500,000 for Obama’s 2012 campaign and was his campaign finance chairman in 2008. She contributed $250,000 to Obama’s second inaugural and about $120,000 to Democratic committees in the last two election cycles.
This doesn’t mean the lawmakers were bought. But it does add to the impression that the nominee and her interrogators are all part of the same club of the wealthy and the powerful.
About half the members of Congress have a net worth of more than $1 million, the center found — about 15 times the worth of the typical American household. And it’s a bipartisan club, from Republican committee chairmen Darrell Issa ($480 million) and even more exclusive club.
How exclusive? Well, it’s about to land a billionaire.
Star power in D.C.
Like most presidential appearances, Obama’s May 2010 stop at Solyndra’s headquarters was closely managed political theater.
Obama’s handlers had lengthy e-mail discussions about how solar panels should be displayed (from a robotic arm, it was decided). They cautioned the company’s chief executive against wearing a suit (he opted for an open-neck shirt and black slacks) and asked another executive to wear a hard hat and white smock. They instructed blue-collar employees to wear everyday work clothes, to preserve what they called “the construction-worker feel.”
White House e-mails suggest that the original idea for “POTUS involvement” originated with then-Chief of Staff Rahm Emanuel. Emanuel, now mayor of Chicago, did not respond to a request for comment from The Post.
Well beyond the details of the factory photo op, raw political considerations surfaced repeatedly in conversations among many in the administration.
Just two days before the visit, Obama fundraiser Steve Westly warned senior presidential adviser Valerie Jarrett that an appearance could be problematic. Westly, an investment fund manager with stakes in green-energy companies, said he was speaking for a number of Obama supporters in asking the president to postpone the visit because Solyndra’s financial prospects were dim and the company’s failure could generate negative media attention.
Republicans and Democrats are two wings of the same Party of the Rich, by the rich, and for the rich. If Mitch McMconell and Harry Reid switched parties, they’d be the same load of crap.
Wall Street Crashes the 2008 Election
Both Obama and McCain are shunning the hands-off regulatory approach of the Bush Administration in favor of stricter oversight
The newly elected US president owes Wall Street bankers a debt of gratitude for generous campaign donations as he ponders how to cope with a financial crisis that poses tough challenges over government aid and regulation for the banking industry.
Wall Streeters Top Obama Re-Election Supporters
A just-released study by the Center for Responsive Politics shows that President Obama is relying more on Wall Street to fund his re-election this year than he did in 2008, according to CNBC, which obtained an advance copy of the report.
Wall Street’s Campaign
In the Halloween post, this blog demonstrated that President Obama speaks out of both sides of his mouth when it comes to Wall Street. Any perceptive voter could recognize that Obama’s mantra during the 2008 election was null and void because of his ties to Wall Street. No candidate received more money/support in 2008 than the beanpole lawyer from Illinois, who was compared to Abraham Lincoln.
Barack Obama has collected nearly twice as much money as John McCain
Records show that four out of Obama’s top five contributors are employees of financial industry giants – Goldman Sachs ($571,330), UBS AG ($364,806), JPMorgan Chase ($362,207) and Citigroup ($358,054).
McCain’s top five include Wall Street’s Merrill Lynch ($230,310) and Citigroup ($219,551).
These capitalists generally act harmoniously and in concert to fleece the people, and now that they have gotten into a quarrel with themslves, we are called upon to appropriate the people’s money to settle the quarrel.
A. Lincoln 1837
Power elite, the connected class, in Washington and the board rooms, don’t believe in God. They are unconcerned with the consequences of their actions or inaction upon the lives of the 99%, else, they would not behave as corrupt predators.
Wall Street’s resurgent prosperity frustrates its claims, and Obama’s
By Zachary A. Goldfarb, Published: November 6
President Obama has called people who work on Wall Street “fat-cat bankers,” and his reelection campaign has sought to harness public frustration with Wall Street. Financial executives retort that the president’s pursuit of financial regulations is punitive and that new rules may be “ holding us back.”
But both sides face an inconvenient fact: During Obama’s tenure, Wall Street has roared back, even as the broader economy has struggled.
The largest banks are larger than they were when Obama took office and are nearing the level of profits they were making before the depths of the financial crisis in 2008, according to government data.
Wall Street firms — independent companies and the securities-trading arms of banks — are doing even better. They earned more in the first 21 / 2 years of the Obama administration than they did during the eight years of the George W. Bush administration, industry data show.
Behind this turnaround, in significant measure, are government policies that helped the financial sector avert collapse and then gave financial firms huge benefits on the path to recovery. For example, the federal government invested hundreds of billions of taxpayer dollars in banks — low-cost money that the firms used for high-yielding investments on which they made big profits.
Stabilizing the financial system was considered necessary to prevent an even deeper economic recession. But some critics say the Bush administration, which first moved to bail out Wall Street, and the Obama administration, which ultimately stabilized it, took a far less aggressive approach to helping the American people.
“There’s a very popular conception out there that the bailout was done with a tremendous amount of firepower and focus on saving the largest Wall Street institutions but with very little regard for Main Street,” said Neil Barofsky, the former federal watchdog for the Troubled Assets Relief Program, or TARP, the $700 billion fund used to bail out banks. “That’s actually a very accurate description of what happened.”
Neither the Bush administration nor the Obama administration, for instance, compelled banks to increase lending to consumers, known as “prime borrowers.” Such a step might have spurred spending and growth, although generating demand for loans may have proved difficult in the downturn.
A recent study by two professors at the University of Michigan found that banks did not significantly increase lending after being bailed out. Rather, they used taxpayer money, in part, to invest in risky securities that profited from short-term price movements. The study found that bailed-out banks increased their investment returns by nearly 10 percent as a result.
“If the goal was to support lending, it would have been sensible to require a portion of the money to support credit origination,” said Ran Duchin, one of the finance professors who completed the study. “Lending to prime consumers was not the most profitable use of their capital.”
Some of Wall Street’s success has moderated in recent months, with bank stock prices down and layoffs on the rise. This mostly has reflected the renewed slowdown in the U.S. economy this year and the European debt crisis buffeting global markets.
Representatives of the financial industry say regulations in last year’s Dodd-Frank legislation, which Obama pushed for and signed, also have crimped bank profits. But many analysts think the law will make the financial system more stable. The legislation, for instance, requires banks to maintain a greater capital cushion to withstand losses during bad economic times. The measure also created a regulator whose sole purpose is to police lending to ordinary Americans.
But many of the legislation’s most significant measures have yet to be put into place, and their ultimate effect on the bottom line remains unclear.
Financial firms have raised major concerns about one of the largest structural changes made by the law, the “Volcker Rule.” This measure would bar banks from engaging in trading and other speculative activity on their own behalf rather than to profit customers. But the rule’s impact could prove limited because of loopholes and exceptions allowed by lawmakers and regulators working to implement it.
One of the main reasons Wall Street rebounded so quickly from its lows is government support.
Even before Obama took office, the government pumped hundreds of billions of dollars into banks. The Federal Reserve, which is independent of the administration, lowered interest rates, allowing firms to borrow money cheaply and trade with it, booking huge profits. The Fed also introduced lending programs that bolstered stock and bond markets and allowed banks to earn a steady return on reserves they kept with the central bank.
“The too-big-to-fail banks got bigger profits and avoided failure because of trillions of dollars of loans directly from the Federal Reserve,” said Linus Wilson, assistant professor of finance at University of Louisiana at Lafayette. “Today, their profits are boosted by lower borrowing costs because their managers and creditors expect a Fed lifeline when markets get jittery.”
Banks also have benefited from the large increase during the recession in unemployment insurance. Increasingly, banks offer debit cards to the unemployed to collect their government benefits. These debit cards carry a range of fees that bolster banks’ bottom lines.
What’s more, states — with their budgets shattered by the financial crisis and recession — have increasingly been moving to enroll new employees into Wall Street-run retirement accounts rather than government pension programs. That’s potentially more lucrative for Wall Street, which can charge fees for managing the savings of individual retirees.
Since Dec. 31, 2008, the largest banks — those with more than $100 billion in assets — have increased their total combined assets by about 10 percent.
As banks get larger, they can become more profitable. This is because investors tend to be more willing to lend them money at interest rates lower than those other banks are charged. There is a common perception that big banks are less risky because the government will still step in to save them if they get into financial trouble. On the flip side, under new financial regulations, the largest banks will have to hold more financial reserves than smaller banks — although precisely how much is still being discussed.
Banks’ profits up
Profits have also rebounded. The largest banks, including Bank of America, Citigroup and Wells Fargo, earned $34 billion in profit in the first half of the year, nearly matching what they earned in the same period in 2007 and more than in the same period of any other year.
Securities firms — the trading arms of big banks and hundreds of other independent firms — have fared even better. They’ve generated at least $83 billion in profit during the past 21 / 2 years, compared with $77 billion during the entire Bush administration, according to data from the Securities Industry and Financial Markets Association.
Compensation at these firms also has bounced back. Financial firms paid about $20.8 billion in bonuses for work done in 2010, according to research by the New York state comptroller. In New York City, the average Wall Street salary last year grew 16.1 percent, to $361,330, which is more than five times the average salary of a private-sector worker in the city.
By contrast, millions of Americans continue to face economic difficulties. That is fueling broad public anger at Wall Street and has given rise to the inviting them to a campaign gathering at the White House. He has attracted more money for his campaign and for the Democratic National Committee from financial firm employees than all of the GOP candidates combined — a total of $15.6 million.
1:43 PM EST
This is the Hope&Change! that you voted for.
12:10 AM EST
Without having read the entire article, I can say that Wall St. has not been abused by any means. Congress, during the financial regulations discussions, did all it could to protect Wall St.
As it currently exists, financialization has overtaken the US economy…and it has not been good advent.
12:09 AM EST
The big problem is greed. they have the money and want to keep it all locked up as the foundation crumbs away . ,,, and they could loose it all
12:07 AM EST
So, you volunteered for the infantry and you spent the last 13 months in IRAQ fighting the INSANE ISLAMIC TERRORISTS who basically only have one thing to say, “Allah akbar”.
THEN you survive to ETS and get to BWI where you look forward to decompressing and you pass a newspaper vending box with the Washington Post in it and you look inside the little window and you see a photo of the GRAND MOSQUE in MECCA and the HOLY KAABA being the focus of the ISLAMIC HAJJ commanding this particular SUNDAY issue of the POST and they have the quote “Allah akbar” and you THROW UP all over the little machine.
I’d be SURPRISED at a lesser reaction.
11/6/2011 11:41 PM EST
Gee they are making record profits and giving record donations to Obama. However its those evil Republicans that are looking out for those fat cat bankers.
11/6/2011 11:39 PM EST
Fine let them make their money but someone tell me why they pay the lowest tax rate. I seem to recall Reagan bumping up their tax rate to 28%. Maybe one of you Reaganites can explain it.
11/6/2011 11:13 PM EST
This society encourages its citizens to prey on each other.
That must stop.
11/6/2011 11:09 PM EST
Unbelievable…. “They’ve generated at least $83 billion in profit during the past 21 / 2 years, compared with $77 billion during the entire Bush administration”
Funny how the nation was on life support for two years, uncountable people losing their homes, while the finance industry pulled off quadruple profits, yet the industry is worried about a possible future loss in profits, due to legislation that requires them to share profit to customers?
The point: banks and wall street have suffered little from the housing market crash and in fact have done just the opposite, and all from taking risks in the market. Why not take a risk in a local business or home owner? Is it fair that a negative shift in the market suddenly makes many homes less than what is owed, and then people are locked into high or variable rate and suddenly considered a bad credit risk as well, regardless of their credit history? My mother cannot refinance her home, while the company she works for had their line of credit sliced in half, all due to a sudden, nation wide loss in property values.
But anyway, congratulations to the banks for fairing so well during this crisis, but the time has come to loosen the spinsters and take a risk on a honest working Americans again. Lets face it. The housing bubble was not really caused by borrowers over extending themselves, but more by the lenders doing so and who were supposed to be the more responsible of the two.
11/6/2011 10:58 PM EST
Wingnuts have selective memories, it is a fundamental flaw in the species. Here is a refresher.
President George W. Bush’s speech to the nation on the economic crisis
Published: Thursday, September 25, 2008
Good evening. This is an extraordinary period for America’s economy.
Over the past few weeks, many Americans have felt anxiety about their finances and their future. I understand their worry and their frustration.
We’ve seen triple-digit swings in the stock market. Major financial institutions have teetered on the edge of collapse, and some have failed. As uncertainty has grown, many banks have restricted lending, credit markets have frozen, and families and businesses have found it harder to borrow money.
We’re in the midst of a serious financial crisis, and the federal government is responding with decisive action.
We boosted confidence in money market mutual funds and acted to prevent major investors from intentionally driving down stocks for their own personal gain.
Most importantly, my administration is working with Congress to address the root cause behind much of the instability in our markets.
Financial assets related to home mortgages have lost value during the house decline, and the banks holding these assets have restricted credit. As a result, our entire economy is in danger.
So I propose that the federal government reduce the risk posed by these troubled assets and supply urgently needed money so banks and other financial institutions can avoid collapse and resume lending.
This rescue effort is not aimed at preserving any individual company or industry. It is aimed at preserving America’s overall economy.
President Obama has saved this country from economic collapse and is still fighting a brave battle against the haters of good government.
You Obama haters can’t stand that fact but you can’t change it.
11/6/2011 10:54 PM EST
Wall Street is unfortunately located in New York, the highest taxed city in the nation, if not the world:
Let’s take the situation in New York State. New Yorkers like me pay federal income tax (35%), state income tax (8.97%), New York City income tax (3.876%), and payroll taxes – FICA and Medicare (7.65%), for a total maximum rate of 55.496% and property taxes. In fact, per capita property tax in the Empire State is about $1,900 a year (just under $4,000 per family). Sales tax per capita, another $1,700 per year (another $4,000 per family).
Gasoline tax in New York: 45 cents a gallon. Cell phone tax and fees of 23 percent are added to your monthly bill. There are also tolls, and taxes on your utility bill, telephone bill, driver’s license, registration, cigarettes and alcohol and almost all types of insurance. The hits just keep on coming.
The only relief for New Yorkers is knowing the tax situation is worse in New Jersey. Bill O’Reily.
11/6/2011 10:59 PM EST
You are either drunk when you do your taxes, or you need to talk to your accountant.
The highest federal income tax bracket is 28%. The 35% bracket was eliminated over ten years ago.
I don’t mean to apologize for taxes. This is your money, and even 1% of tax is too much tax…
I understand that New York has always been taxed more overall. It has the oldest and most expensive infrastructure in the country. Yet, there are lots of advantages to living in New York. I wish I could live there…
11/6/2011 10:48 PM EST
As a conservative I admitted and knew it was time for Bush to leave, I am not his fan.
I just wish liberals would be honest and admit that Obama needs to go also. We can’t survive with his policies.
11/6/2011 10:36 PM EST
President Downgrade has squandered his Bush inheritance:
1) Inherited 7.3% unemployment (5.26% average) and turned it into 9.1% (9.4% average) currently (and that number is an improvement from last month).
2) Inherited a AAA credit rating from S&P and became the first president in history to see the USA downgraded to AA+.
3) Inherited wars in Iraq and Afghanistan and has added Pakistan, Libya, Somalia and Yemen.
4) Inherited US debt of $6.3t and total public debt of $10.6t which he has turned into $9.7t in US debt and $14.6t in total public debt in just over two years.
5) Inherited an economy that was adding $1.68b/day to the Federal debt and accelerated it to $4.25b/day.
6) Inherited a national average gasoline price of $1.72 per gallon and has bullied it up to $3.58 today.
Barack “Downgrade Double Dip Blame and Lie” 0bama
11/6/2011 10:35 PM EST
The Democrats are up to their necks in producing the Toxic Assets that killed the credit markets, the life blood of businesses. The bad liberal policy decades ago of relaxing the prudent lending laws finally exploded.
Read the laws, CRA, Fair lending laws. and watch the actions of the Democrats controlled FNMA. Read the complaint sections and what a lawyer and a complainant can do to a lending institution. NO lending institution wants to be opposite a government lawsuit.
Then watch the rebroadcast of the CSPAN coverage of the 2004 FNMA hearings. Watch the Democrats vehemently defending these bad loans.
Yes, the Democrats are up to their necks in producing these decades of Toxic Assets that was at the forefront of this recession.
11/6/2011 10:33 PM EST
I thought the Republicans were the party of Big Corporations and Wall Street?
A sample of the top contributers to Obama (2008)
University of California $1,591,395
Goldman Sachs $994,795
Harvard University $854,747
Microsoft Corp $833,617
Google Inc $803,436
Citigroup Inc $701,290
JPMorgan Chase & Co $695,132
Time Warner $590,084
Sidley Austin LLP $588,598
Stanford University $586,557
National Amusements Inc $551,683
UBS AG $543,219
Wilmerhale Llp $542,618
Skadden, Arps et al $530,839
IBM Corp $528,822
Columbia University $528,302
Morgan Stanley $514,881
General Electric $499,130
11/6/2011 10:34 PM EST
Real looney tunes time now
11/6/2011 10:35 PM EST
We know that you don’t like numbers
11/6/2011 10:44 PM EST
I wasn’t talking about the validity or nonvalidity of those numbers. All politicians get as much money together as they can. Money is what screwed up politics to begin with.
I was talking about get ready for 50 copy pastes of the same thing from james he posts daily. That is the Looney Tunes time.
11/6/2011 10:29 PM EST
Looks like the OWS people are on to something. But who is big enough to stop all this? Government could have been big enough, but you have to watch government so closely and now Citizens United has allowed government to be bought by guess who? So now we march by the millions or else.