Latest Obama-nation: President Defends Bankster Pay

I’m late to this, as everyone with an operating brain cell, starting with Simon Johnson to Paul Krugman is duly horrified by the remarks that Obama made in a Bloomberg interview, published this AM:

President Barack Obama said he doesn’t “begrudge” the $17 million bonus awarded to JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon or the $9 million issued to Goldman Sachs Group Inc. CEO Lloyd Blankfein, noting that some athletes take home more pay.

The president, speaking in an interview, said in response to a question that while $17 million is “an extraordinary amount of money” for Main Street, “there are some baseball players who are making more than that and don’t get to the World Series either, so I’m shocked by that as well.”

“I know both those guys; they are very savvy businessmen,” Obama said in the interview yesterday in the Oval Office with Bloomberg BusinessWeek, which will appear on newsstands Friday. “I, like most of the American people, don’t begrudge people success or wealth. That is part of the free- market system.”

Yves here. There are only two, not mutually exclusive, conclusions one can reach from reading this tripe: that Obama is a lackey of the financiers, and putting the best spin he can on their looting, or he is a fool.

The salient fact is that, their protests to the contrary, the wealth of those at the apex of the money machine was not the result of the operation of “free markets” or any neutral system. The banking industry for the better part of two decades has fought hard to create a playing field skewed in their favor, with it permissible to sell complex products with hidden bad features to customers often incapable of understanding them. By contrast, one of the factors that needs to be in place for markets to produce desirable outcomes is for buyers and sellers to have the same information about the product and the objectives of the seller.

Similarly, the concentrated capital flows, often too-low interest rates, and asymmetrical Federal Reserve actions (cutting rates fast when markets look rocky, being very slow to raise rates and telegraphing that intent well in advance) that are the most visible manifestations of two decades of bank-favoring policies, are the equivalent of massive subsidies.

And that’s before we get to the elephant in the room, the massive subsidies to the banksters that took place during the crisis and continue today.

We have just been through the greatest looting of the public purse in history, and Obama tries to pass it off as meritocracy in action.

Obama is beyond redemption.

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  1. DownSouth

    That Obama could compare the confederacy of dunces at the controls of America’s economic apparatus with professional athletes is truly beyond the pale. As Robert Hughes pointed out in Culture of Complaint:

    The greatest popular spectacles in America are elitist to the core: football games, baseball games, basketball, professional tennis. But nobody is going to pay to watch Hilton Kramer and me swim the 800-meter freestyle in 35 minutes flat, despite our privileged position…

  2. VacantHomes

    Just wow. And here I thought Obama was starting to have an inkling of “getting it” regarding reigning in the banks. The taxpayers don’t backstop Major League Baseball.

      1. DownSouth


        You are absolutely right. Robert Bryce tells a fascinating story of how these self-proclaimed “enemies” of “big government” speak out of both sides of their mouths:

        Since he took to the stump three and a half years ago to run for governor, Bush has railed against “big government.” On the very first day of his campaign, November 8, 1993, Bush told supporters in Houston, San Antonio, Austin, and Dallas that “the best way to allocate resources in our society is through the market place. Not through a governing elite, not through red tape and over-regulation, not through some central bureaucracy.”

        But through the Arlington stadium deal, Bush, who owns 1.8 percent of the Rangers, has been personally enriched by using the “governing elite” and the “central bureaucracy” not only to confiscate land for private purposes, but to get a huge public subsidy for a stadium that generates profits for himself and the Texas Rangers. Though Bush’s present ownership percentage in the team is relatively small, the asset represents a large part of his personal wealth; moreover, Bush’s deal with the team includes a provision that will almost certainly multiply his future ownership interest to 11 percent.

    1. Francois T

      Do not backstop?
      Have a look at the very instructive table at page 63 of the book “Free Lunch” by David Cay Johnston.

      Figures for 2006 show that the total operating income for the big four commercial pro sports was 1.66 billion USD. Their NET LOSS before taxpayers’ subsidies was 340 million USD.

      The taxpayers’ subsidies was 2 billion dollars for the year.

      The whole chapter titled “Pride and Profits” is an eye opener.

      1. Yves Smith Post author

        That’s great, and then you get to the other part, that who gets paid most in baseball isn’t meritocratic either (if you mean their value in winning games), as Michael Lewis described long form in Moneyball, that managers relied on heuristics and aesthetics (like overpaying for players who were fast and therefore could steal bases) as opposed to qualities that both helped win games and were undervalued.

        And even though Moneyball was widely read, it, it hasn’t had much impact on the industry, see:

        1. Transor Z

          I certainly don’t begrudge the President his success. But for the life of me I just can’t think of what it was.

  3. lalaland

    As others have pointed out in the comments on Krugman’s blog, Bloomberg cherry picked the hell out of the actual question and answer. The fact that you commented along the same lines, without checking the source, completes the circlejerk another loop.

    Q Let’s talk bonuses for a minute: Lloyd Blankfein, $9 million; Jamie Dimon, $17 million. Now, granted, those were in stock and less than what some had expected. But are those numbers okay?

    THE PRESIDENT: Well, look, first of all, I know both those guys. They’re very savvy businessmen. And I, like most of the American people, don’t begrudge people success or wealth. That’s part of the free market system. I do think that the compensation packages that we’ve seen over the last decade at least have not matched up always to performance. I think that shareholders oftentimes have not had any significant say in the pay structures for CEOs.

    Q Seventeen million dollars is a lot for Main Street to stomach.

    THE PRESIDENT: Listen, $17 million is an extraordinary amount of money. Of course, there are some baseball players who are making more than that who don’t get to the World Series either. So I’m shocked by that as well. I guess the main principle we want to promote is a simple principle of “say on pay,” that shareholders have a chance to actually scrutinize what CEOs are getting paid. And I think that serves as a restraint and helps align performance with pay. The other thing we do think is the more that pay comes in the form of stock that requires proven performance over a certain period of time as opposed to quarterly earnings is a fairer way of measuring CEOs’ success and ultimately will make the performance of American businesses better.

    1. Yves Smith Post author

      I appreciate that what Obama said looks less dreadful in context, but it does not disprove the basic thrust of the argument.

      Say on pay is ineffective. Goldman’s major institutional shareholders insisted on meeting with the firm to complain, not just about CEO pay, but compensation levels in general. While Goldman did pay out less than it could have in theory, it appears to be much more a function of the roundly negative press that the firm has been receiving than shareholder concerns.

      The average duration of shareholding (and this was before the rise of flash trading) is well under a year. How can they be considered to be investors in the traditional sense? Shareholders take no long-term position in the success of a company.

      We have a major defect in our corporate governance system as far as public companies are concerned. Liquid, anonymous shareholders cannot exercise discipline on management. It is very costly to try and all the other shareholders are free riders on the ones who spend the time and usually futile effort of those who try to discipline management. It is much cheaper and easier to sell your shares.

      And what do you think will happen if we have Say on Pay? Well it has no legal impact, it’s just a vote that can be ignored. But it will lead companies to engage in PR and other efforts to make sure those votes don’t go too badly (no reason to risk negative press), so they will be wasting MORE corporate resources to preserve the right to feather their nest.

      And substantial sharesholdings are no protection either, that’s another canard. Bear and Lehman had substantial employee and top executive ownership. But studies found that even with a lot of compensation in shares, the top brass still pulled out a tremendous amount out in cash before their firms failed:

      So the supposed “tougher” and more reasonable parts of Obama’s remarks were simply more industry-serving headfakes.

    2. Andrew Foland

      Part of the job of being president is to be paranoid enough not to give them anything that might be taken out of context.

      If I get into an interview and say something that out of context can be turned into a stupid-sounding soundbite, I might have some excuse that I’m just some science dweeb who’s never done interviews before and didn’t think enough about how a media outlet would immediately look for the most sensational spin for my remarks.

      The President of the United States really doesn’t have that excuse in his arsenal. Communication of a vision is really part of the job, and with that comes a responsibility to know how to navigate our absurd system of national communication.

      1. Doug Terpstra

        On the central issue of our time, after a mass-repudiation by stay at home Kennedy voters, Obama has strangely abdicated his pulpit to the DLC.

        So much exhilarating promise. Around the time of his coronation, Obama was compared to FDR. Well, FDR was physically handicapped, but he had cajones; Obama is a crippled eunuch by self-inflicted wounds. What a crying shame.

    1. Bob Morris

      More nice words. Still, no action. seems to be his pattern, doesn’t it?

      PS Remember when Obama had the banker meeting and three CEO them didn’t bother to come saying it, darn it, but it was just too foggy? So, they phoned in and he meekly thanked them.

      Imagine what LBJ would have done… Like rip their heads off. No, cancel that, they wouldn’t have dared not show.

      1. Yves Smith Post author

        Agreed, this is the part that is stunning. Here we supposedly have an imperial Presidency, when no president Nixon or earlier would have tolerated the intransigence that Wall Street has displayed. JP Morgan was as powerful, if not more so, at his peak, and Teddy Roosevelt was not cowed.

        1. Francois T


          Teddy Roosevelt didn’t need 850 million dollars to get elected.

          Obama did; and with the recent Supine Court decision (United Citizens v. FEC) he’ll need north of a billion.

          Guess who will provide a hefty part of the dinero to reach that figure.

      2. NotTimothyGeithner

        Well, the story I recall about LBJ was that he was having a meeting with George Wallace about Civil Rights and school integration. LBJ kept compromising and Wallace kept demanding more. They broke for lunch, and when they came back, LBJ kept calling Wallace “Jefferson.”

        When Wallace asked what he meant by that, LBJ responded that if Wallace didn’t do exactly what LBJ said then Wallace would go down as the next Jefferson Davis and that he was going to order the 101st Airborne to jump into Montgomery the next day.

        Wallace did exactly what he was told.

        Its slightly different, but I have the gist of the story correct.

      3. AP

        The last (p)resident the people had that stood up to the banksters was JFK. We all know what happened to him because of it, and who else would? Because it’s clear what would happen if they did.

        Let’s face it, Obama is in there because he was put in there to perpetuate the current economic state of affairs. The sooner we come to grips with this fact as a populace the better off we will be.

  4. maynardGkeynes

    @Bryan Hayes: The WH press machine can say all they want, the comparison to baseball salaries is fatal. No one who could say that understands what’s going on. A window to his soul. Sorry to see this from Obama. Yves, Simon, and Krugman have nailed this.

  5. sotruth181

    So how do you measure “performance”, Mr Obama?

    The looters of Simmons certainly “performed”. Consider the following from ZeroHedge, Oct 2009:

    >> Simmons says it will soon file for bankruptcy protection, as part of an agreement by its current owners to sell the company — the seventh time it has been sold in a little more than two decades — all after being owned for short periods by a parade of different investment groups, known as private equity firms, which try to buy undervalued companies, mostly with borrowed money.

    >> For many of the company’s investors, the sale will be a disaster. Its bondholders alone stand to lose more than $575 million. The company’s downfall has also devastated employees like Noble Rogers, who worked for 22 years at Simmons, most of that time at a factory outside Atlanta. He is one of 1,000 employees — more than one-quarter of the work force — laid off last year.

    >> But Thomas H. Lee Partners of Boston has not only escaped unscathed, it has made a profit. The investment firm, which bought Simmons in 2003, has pocketed around $77 million in profit, even as the company’s fortunes have declined. THL collected hundreds of millions of dollars from the company in the form of special dividends. It also paid itself millions more in fees, first for buying the company, then for helping run it. Last year, the firm even gave itself a small raise.

    >> Wall Street investment banks also cashed in. They collected millions for helping to arrange the takeovers and for selling the bonds that made those deals possible. All told, the various private equity owners have made around $750 million in profits from Simmons over the years.

    I think it is perfectly clear to most Americans what your definition of “performance” is. After all, as you stated in your interview: “I know both those guys; they’re very savvy businessmen.”

  6. alex

    Yves: “Obama is a lackey of the financiers, and putting the best spin he can on their looting, or he is a fool”

    I understand you providing an alternate, less damning interpretation, but you and I both know Obama is no fool.

    1. psychohistorian

      I daresay that he is both.

      Obama is now seen clearly by us of the “lower” class as a foolish lackey of the “upper” class. They have the hooks in him deep.

      Its time to bend over and smile or do something folks. A Shock Doctrine moment is approaching for America. Will America become the face and boot of multinational corporate fascism or will it reassert its “We the people” purpose and end its global imperialism?

      Interesting times…..

  7. bobh

    We need to face facts. There was a chance in the wake of the Bush administration to elect a president with some principles who might begin to put the country back together again. But we screwed up and gave this guy the Democratic nomination. Our bad. It will be a long time before we get another chance, and there won’t be much left to work with when it comes.

    1. Robespierre

      There was no such chance. The truth of the matter is that democrats and republicans are the same. The perceived differences are the result of propaganda from both parties to be able to take turns at government in perpetuity. The US is as democratic as Mexico with its single party.

  8. dd

    Obama got his message directly from Goldman Sachs boardmember and Harvard Business School Professor (notice that nexus!) Bill George who touted this line just last month:
    “If you don’t pay them for their performance, you’ll lose them. It’s much like professional athletes and movie stars.”

    No it’s not our bad. There are no choices other than Ivy League corporate globalists whether they come in the dumb but cunning Bush variety or the smart but dumb Obama variety. At least the Clinton edition put up some fight until it was re-educated.

    1. Francois T

      “If you don’t pay them for their performance…”

      A real President (a.k.a with functioning kahunas) would have replied:
      “Cemeteries are full of indispensable people”

      1. anomimouse

        And if they leave, they will do what? Start their own global banking behemouths that are too big to fail? Or start smaller investment banks that could fail in droves and no one would care?

    1. Sid

      What blows my mind is that the America-hating communists who oppose having the best paid investment bankers our government can afford think that Obama’s words mean something.

      Ignore what he says. (This is why I ignore state of the union addresses and other political theatrics.)

      Pay attention what he does.

      1. NotTimothyGeithner

        I have, and Obama’s economic policy seems built around making sure Wall Street can continue stealing.

  9. Michael Fiorillo

    Obama’s handlers need to be more careful: his brand identity is not consistent, which will create marketing problems down the line.

  10. craazyman

    This latest meme that equates taxpayer-supported looters with star atheletes is one of the most miserably pathetic attempts at argument I have ever seen.

    How can anyone take this seriously? How can anyone believe this? I don’t want to bore the board with my Catullus poem again. ha hahah ahahah ahahahah.

    And these guys are “saavy businessmen”? Yeah, like Jack the Ripper was “good with a knife” and Hitler was a “terrific motivator” and slavery was a “peculiar institution” and gettting mugged, raped and beaten on the streets of a city is an “unfortunate incident”.

    Even refuting this garbage is an exercise in such obviousness as to insult the intelligence.

    These two oafs are tollboths, not talent.

    1. Doug Terpstra

      I choked on the same metaphor—“there are some baseball players who are making more than that and don’t get to the World Series either.”

      What an utterly lame analogy: destroying the world economy with predatory casino capitalism is equivalent to not getting to the World Series? Sheesh! Por Favor!

      Krugman is right, “We’re doomed.”

  11. Dan Duncan

    Obama is the 21st Century version of Noah S. “Soggy” Sweat, Jr., who gave the infamous “If-By-Whiskey” speech in 1952 about whether Mississippi should legalize alcohol.

    Here’s an excerpt from the speech. Simply substitute “whiskey” with “Wall Street”…and you get Barack Soggy Obama at his best :

    My friends, I had not intended to discuss this controversial subject at this particular time. However, I want you to know that I do not shun controversy. On the contrary, I will take a stand on any issue at any time, regardless of how fraught with controversy it might be. You have asked me how I feel about whiskey. All right, here is how I feel about whiskey:

    If when you say whiskey you mean the devil’s brew, the poison scourge, the bloody monster, that defiles innocence, dethrones reason, destroys the home, creates misery and poverty, yea, literally takes the bread from the mouths of little children; if you mean the evil drink that topples the Christian man and woman from the pinnacle of righteous, gracious living into the bottomless pit of degradation, and despair, and shame and helplessness, and hopelessness, then certainly I am against it.

    But, if when you say whiskey you mean the oil of conversation, the philosophic wine, the ale that is consumed when good fellows get together, that puts a song in their hearts and laughter on their lips, and the warm glow of contentment in their eyes; if you mean Christmas cheer; if you mean the stimulating drink that puts the spring in the old gentleman’s step on a frosty, crispy morning; if you mean the drink which enables a man to magnify his joy, and his happiness, and to forget, if only for a little while, life’s great tragedies, and heartaches, and sorrows; if you mean that drink, the sale of which pours into our treasuries untold millions of dollars, which are used to provide tender care for our little crippled children, our blind, our deaf, our dumb, our pitiful aged and infirm; to build highways and hospitals and schools, then certainly I am for it.

    This is my stand. I will not retreat from it. I will not compromise.

  12. Allen C

    Beyond redemption? We are realizing that he was installed.

    Please fix the typo “They banking industry…” I want to send the link.

  13. mitchw

    1Maybe the banksters only hear lip service coming from Obama.
    2 Professional athletes in US leagues are also not subject to the free market in that they have exemptions from anti-trust. But with athletes, at least the workers get the dough. Would one rather the Boss got it all?

    1. NotTimothyGeithner

      Isn’t only baseball exempt? Or is that baseball has an actual, legal monopoly as opposed to being merely exempt?

  14. Keenan

    “I know both those guys; they are very savvy businessmen,” Obama said in the interview yesterday in the Oval Office with Bloomberg BusinessWeek, which will appear on newsstands Friday.

    That is an interesting statement, Mr. President. Please elaborate: What sort of dealings have you, or perhaps was it members of your administration, had with them which demonstrate to you their business acumen ?

    1. NotTimothyGeithner

      Obama also thinks Rahm Emmanuel and Tim Kaine have a great deal of political accumen, so we really shouldn’t be surprised the President doesn’t have a clue when it comes to other sectors.

  15. EmilianoZ

    I think he wants to lose this year’s election. Then he’ll have the perfect excuse to do the Republicans’ bidding for the next 2 years (which he always wanted to do).

    Then he’ll have to pray that Americans aren’t disgusted enough to elect Palin and HRC doesn’t launch a last ditch assault. Or maybe he’s just happy with a 4-year stint and eagerly waiting to hit the lecture circuit with sponsoring from Goldman Sachs and JPMorgan.

    Anyways he really is beyond redemption.

  16. Doc at the Radar Station

    “A déjà vu is usually a glitch in the Matrix. It happens when they change something…

    1. susie

      To: Doc at the Radar Station:

      In response to your: “A déjà vu is usually a glitch in the Matrix. It happens when they change something… “,

      Let us play with that for a moment, and work-out several possibilities for what THAT CHANGE might be …

  17. bob

    He is once again pandering to extremists. Pandering to a group of people who would never vote for him or support him to begin with.

    The left is where he can get his majority back.

    The left/right divide in america is very simple. The left has no ideological basis, pragmatists if you will. The right does. The right believes that as long as they go to church on sunday, they can continue to rape and pillage on monday and claim the high moral ground.


    You cannot dance around a fix position and hope to draw them away from it. The only winning alternative is to attack, attack and attack. Even politically this is a very stupid and dangerous strategy. He keeps allowing the far right to dictate his actions.

    The majority of america may very well be stupid. They do, however, know when they are being screwed. It just takes a while. Time is up.

  18. i on the ball patriot

    This is what Obummer should have said …

    “I, like most of the American people, begrudge the living shit out of rich gangsters getting wealthy on a tilted playing field that they bought and paid for. Show me a free market anywhere on this planet and I will kiss your ass. This shit has got to end, and I am going to end it right now!

    I am also going to stop the outrageous practice of these wealthy ruling gangsters spending billions of your money by back charging you with increased prices on products, to convince you that you should honor and adore these stinking rich scum bag thieves. Jamie Dimon’s $17,000,000 bonus alone is an incredible one thousand one hundred seventy two times the annual salary of Joe six pack on the minimum wage! That is out-fucking-rageous! My own $400,000 per year salary is also obscene when compared to the minimum wage and I am going to change that right now!

    Therefore, by Presidential Order I am imposing a change you can really believe in. A maximum wage of seven times the minimum wage all across the country. $7.25 x 7 = $50.75 per hour for a maximum of $101,500 per year which will be my new annual salary.”

    Which gets us to the question, if you could set aside all the wealth adoring bullshit you have been fed here in scamerica, what would a fair maximum wage be?

    Deception is the strongest political force on the planet.

    1. Eagle

      My Soviet contacts had some excellent thoughts about that last question – unfortunately, they went dark almost 20 years ago. Please join me in working to find them and recreating that utopia.

      1. bob

        Please, go visit those ‘soviet’ contacts. They have set up the perfect free market orgy in Russia.

        What does the right wing ideologue history book look like?

        My guess

        Chapter One- Jesus. Not noting anything he actually said, but what he was reported to say by people seeking power 400 years later.

        Chapter Two- WWII. Without a leader for the US government, the allied powers manage to defeat the fascist Axis powers and set the French people free. They have regretted it ever since.

        Chapter Three- Ronald Regan single-handedly defeats the communists riding on top of a red white and blue bull.

    2. Doug Terpstra

      lol, Patriot. It seems O’s campaign speech-writers scurried after the coronation; his soaring rhetoric has done a Hindenburg. I hope O’s speech-writer scouts are perusing this blog. You’re it. Next up on the teleprompter: “This shit has got to end, and I’m going to end it right [the hell] now.”

  19. edward lowe

    The president’s message is straight and true: It’s back to 2007 for another go at business as usual before the market glitsh of 08-09 — an abberation to the Great Moderation that is now firmly back on track. China is the new Uber Bubble and the finance guys are loving every sweet second of it.

  20. Skippy

    On a lighter note re: the BIS meeting Down Under, it was a classic and successful *piss up* with the wives enjoying a hard earned *shopping spree*, with many nods, winks and cheek kissing.

    Loosely translated: We are, who we are, as a right of divinity, the governments of this world are our proxy, to extract the tribute god has gifted us from the common man, in the execution of our holy dutys…amen!

    Skippy…Only two more recalcitrant nations to suborn and this little game of risk is over, a new bright future awaits us in his second coming, so assume the position of ultimate submission.

    PS. I’m personaly investing in “Christ on a Stick* brand *Glory Beam Screen*, as I hear it burns right down the soul…ha ha ha….Whos crazzyman?

  21. Hugh

    Several observations in no particular order:

    Obama has acted as a Blue Dog status quo corporatist from the beginning. You look at him this way and his statements about CEO pay are completely predictable.

    This is not a misstep. It is what he believes. Obama can not be the superb rhetorician one minute and the guy who can’t say what he means the next.

    Which is not to say that it is politically stupid to near suicidal in an election year with this much public anger precisely over the issue of outsized executive compensation. It just magnifies the massacre shaping up in November.

    This is a variant on the Obama MO: downplay the problem, propose an ineffectual remedy and hope it dies in Congress.

    1. scharfy

      “downplay the problem, propose an ineffectual remedy and hope it dies in Congress.”

      Scaldingly clean line. I do believe i will steal that from you.

  22. Mogden

    I have no problem with the pay, as long as there is no government backstop or taxpayer subsidy. If there is, the appropriate pay is zero; in fact, it is to be burned at the stake.

  23. scharfy

    Obama, may never get the albatross of being banker friendly off his neck.

    However, these recent comments have not offended the public to the extent that it has many on this blog. Frankly, many have tuned him out completely. He is more overplayed than the “Macarena.”, and matches its hypnotic appeal.

    The continual rhetorical overtures, once forceful and inspiring, have been rendered impotent in short order. Nobody is listening, and those who are, question the sincerity, to put it nicely.

    He’s gonna have to do something rash to galvanize his base, and the nation, but he’s not got the Cajones. He has succeeded by being pragmatic, but these times call for different set of skills. Breaking down institutional corruption thats been dug in for 50+ years means losing friends. Christ – Summers, Rubin, are his ADVISORS. He ain’t got it in the tank guys. Pardon the language, moderator, but it ain’t fuckin happening.

    He talks loudly, but carries a small stick. Teddy Roosevelt, the trustbuster (and Taft) would puke on sight at the cowardice of this little man.

    The gargoyles have taken over the Cathedral. The metaphor is Ray Bradbury’s, but the problem is ALL of ours.

    1. NotTimothyGeithner

      I’m sorry “pragmatic” refers to solving problems. Obama and his ilk don’t solve problems. They ignore them and hope they go away and propose asinine things like $5,000 tax credits which will only benefit large companies that hire seasonal help already.

      What problems has Obama tried to solve? Really? Palestine/Israel? Nope. Unemployment? He’s said he’s fine with small steps to restore job growth, so nope. Iraq and Afghanistan? Nope, we aren’t leaving. Restoration of Civil Rights? They won’t even try the worst offenders in our judicial system because we are all too fragile. Healthcare? The primary problems are monopoly control of the markets, a shortage of doctors, and lousy food supplies. His wife has planted a garden. Climate change? They proposed a tax on small businesses which large corporations would be able to ignore.

  24. brian

    Not surpising at all
    At his root Obama is not necessarily a dumb man but he triumphed to a considerable degree due to affirmative action
    Those that do often think or project the belief they got to where they are purely on merit
    But beneath the surface he wants to be a part of the club

  25. hereandnow

    AS someone who once sat on a board of directors with Barack Obama, I can tell you in the affirmative that he is smarter than all of us commenters here combined.

    1. psychohistorian

      Its getting Piled Higher & Deeper alright with comments like this. You just have to laugh at the blindness of some people.

      How many intellectuals with vacuous morals does it take to perpetuate the myth of savvy businessmen?

    2. Doug Terpstra

      The dark Lord Sauron too was smarter than his hordes of orcs and fearsome ring wraiths. His moral compass, however, was ‘slightly’ off kilter.

    3. emca

      Of course that assessment might depend on how smart you are.

      There’s also the semantical argument of just what do you mean by saying “smart”. If you define smartness as the ability to make fools of other people, then yes, Obama is a pretty smart guy.

  26. Paul Tioxon

    Yves, you seem well intentioned, for the most part. And I do not know you at all, except for this blog, which I view as a great contribution to the citizenry of our Republic. You seem to find fault with our President, now, for an innocuous statement that does not rise to the level beyond civil discourse in response to a media driven question of small import.
    Now, correct me if I am wrong, but while you and most of your readers were stuffing as much cash, power and privilege into your pockets, working at the higher regions of the Wall STreet food chain, just when did you notice the we lived under an oligopoly? Obama is at worst, an untried and unproven variable, handed a situation that can best be described as a scorched earth economic catastrophe of Carthagian proportions. I think you may be delivering more anger than analysis, not only over this, but over many of the moves he seems to trumpet, now that he is actually responsible for day to day federal operations. What happened to this country did not begin with him and will not be politically dealt with by him, even if he grows bolder into a second term. The political push back does not end simply because 67 million Americans voted for him and gave full command over the ship of state to the democrats in Congress. The Republicans, and special interests will try their strangle hold over even more so. If people like you who seem to gather here for more than academic and civil discourse want to help, try building a cadre of a United Front Politics, with Obama, and against his enemies, the United Front of Republicans for no governing at any cost. You need to take a side, and I do not mean with your ideals or your principles. You need to take a side politically and fight in a United Front, you need to pledge you fortune, your life and your sacred honor and be prepared to lose all of them, even in victory. Especially in victory. Complaining purists, idealist, Constitutional quoters are a dime a dozen. The oligarchs are in a domestic battle to the death. Which side are you on? The right side, the side of truth? Or the side of the people bleeding and driven from their homes in foreclosure, broke, divorced, drunk, and worse. There are millions of them, and the President has done more for them than you have from what I have seen. He needs to do more. Other than complain about his media posture and issue framing, what can you do to support him, better than what this post has done.

    1. Yves Smith Post author


      With all due respect, you comment is off base.

      I worked on Wall Street from 1981 to 1983. The industry was small, most firms were private partnerships. It was very profitable when the firms did not screw it up, and most people knew it was a bit of a racket. But the industry also knew its place, and as partnerships, with the owners personally liable, they were more cautious and less irresponsible than the top executives in a vastly different industry are today.

      I also worked for two years later in that decade starting up and running an M&A department for a Japanese bank, then the second largest in the world, but most investment bankers would see that at third world investment banking at best.

      One indicator of how much the industry has changed in 20+ years: John Whitehead, the co-chair of Goldman when I was there, has long decried the current levels of Wall Street pay.

      You are also missing the message of this and other posts.

      You are dead wrong in seeing this as Obama v. special interests/Republicans. Obama is an enormous beneficiary of the status quo. He has aligned himself with it. There is absolutely no evidence to support your implicit contention, that Obama wants to take on special interests. Look at the health care bill. The first thing he did was cut deals with Big Pharma and the insurers to enrich them!

      Obama has NO balls, no desire for conflict, even if his heart was in the right place, which it most assuredly is not. He could not engage in a real slugfest even if he desperately needed to. It is not in him.

      You still buy his bullshit. Amazing.

      As for you questioning my motives or dedication, I spend hours on this blog at well less than I would earn in other lines of work.

    2. Sid

      Um, what *has* Obama done for the average frustrated commie citizen?

      A few crumbs have been tossed: a few half-hearted proposals of financial regulation and half-assed fumblings in the direction of healthcare.

      Then compare those to the feast Obama has prepared for the average frustrated infestment banker: billions in loan guarantees, TARP, TALF and backdoor, frontdoor and sidedoor bailouts in the form of cash!

  27. linda in chicago

    “AS someone who once sat on a board of directors with Barack Obama, I can tell you in the affirmative that he is smarter than all of us commenters here combined.”

    Then please EXPLAIN him to us!! What on earth has happened to him?? Or are the banksters holding a gun to his children’s heads?? I almost think that this is the case, b/c I am at a loss for other explanations…

  28. reprobate

    Whoever said that has a very peculiar definition of “smarter”.

    Obama may be very good at hitting the right chord when different parties have different ideas, and is probably much more articulate about it that most who have that skill. And that PARTICULAR skill is very highly valued at the board level, and in other settings where massaging big egos is important.

    That is not a sign of general intelligence or character. The evidence that Obama is sorely lacking in what most people would consider to be intelligence is his inability to see that his presidency is melting down due to his inability to make a credible stab at addressing the pressing needs of the country. His refusal to take on the banksters in any meaningful way is obvious even to the normally easy to hoodwink public.

    And another reader pointed out that most people are already tuning him out, they have already figured out he is all hat, no cattle, all empty words.

    Can you ever recall such disenchantment with a President this soon, particularly one possessed of so much charisma? For someone to blow his Presidency this badly, and keep digging an even deeper hole for himself is not consistent with the claim that Obama is possessed of superior intelligence.

    Clinton got off to a bad start, had a disastrous mid-term election, and was able to course correct. I don’t see that happening with Obama.

  29. chas

    “Smarter” makes me think of a story about one of these old con men who used to sell medicine out the back of a covered wagon. At one point he started bottling those little rabbit pellets, (aka rabbit shit) & called them smart pills to make one smart. One day one of his customers told the con man that those “smart pills” tasted like rabbit shit. The con man replied, “see now you’re getting smart.”

  30. Expat

    In less “enlightened” times, we would be treated to political cartoons showing Obama as a “lawn jocky” adorning the residences of Dimon, Blankfein, et al. But since Obama’s race has nothing to do with his role in this, we should perhaps have a political cartoon from Hustler magazine showing Obama dressed as a pimp with banksters lining up to fuck a bound taxpayer in the ass. Or is that still too stereotypical?

    how about Obama dressed up as Dick Cheney?

  31. Kevin de Bruxelles

    Obama is just a post turtle.

    What’s a post turtle? From wiki,

    When you’re driving down a country road and you see a fence post with a turtle balanced on top, that’s a post turtle. You know he didn’t get up there by himself. He doesn’t belong there; he can’t get anything done while he’s up there; and you just want to help the poor, dumb thing down

  32. aleealee

    Just like during the election, whenever Obama spoke his mind and not from the teleprompter, the next day W.O.R.M (What Obama Really Meant) is in full effect.

    Out of context.

    In what context is helping cause an economic breakdown savvy?

    Prepare for more…and everytime.

  33. Hugh

    This idea that Obama is smarter than the rest of us is an invitation for us not to believe our lying eyes. Does surrounding yourself with Republicans and Clinton-era retreads shout out intelligence to you? Does continuing and/or expanding the policies of the worst President in our history demonstrate superior intellect? Is delivering the status quo after running on a platform of fundamental change smart or suicidal?

    It always bothers me when people tell me to believe someone is really smart despite the obvious evidence they are a blithering idiot. Or when they tell me Obama really has no power despite occupying the most powerful position on the planet and with Democrats enjoying the largest Congressional majorities in generations.

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