Does President Obama's new course on Wall Street signal that Treasury Secretary Geithner may be on the outs?
It didn't take long after a stunning GOP victory in Massachusetts for President Obama to regain his defiance, announcing a sweeping proposal that would toughen regulations on the country's biggest banks.
"We have to get this done," Obama said at the White House in what is becoming ongoing campaign against Wall Street. "If these folks want a fight, it's a fight I'm ready to have."
The proposal would prevent high-risk trading by commercial banks and allow the government to limit the size of financial institutions. How well will this play with citizens and with the Wall Street executives Obama has previously branded "fat cats?"
Charles Cooper, writing for CBS News, likened Obama's angry words to a "Bush-like bring-it-on invitation to any interests seeking to block his plans for financial reform." "Maybe this is what the public wants to see," he wrote. "By temperament, the man is not a populist. But if he keeps this up, it could prove to be smart politics."
The Washington Post's Sebastian Mallaby feels Obama is fighting the right "foe" but might be writing checks with his mouth that his administration can't cash. "It's true that the government safety net makes it rational for banks to gamble recklessly; when you have car insurance, you drive faster. But a ban on proprietary trading would be impossible to enforce cleanly," Mallaby wrote. "[Obama[ went too far."
Writing in Britian's Times, Patrick Hosking said Obama's words had a "whiff of Roosevelt" when FDR spoke against bankers at his inauguration in 1933. But is it all talk? While the proposals would certainly amount to major change, "Depending on how the rules are drafted and interpreted, this could amount to a minor inconvenience, or it could destroy the business model of Goldman Sachs."
The Wall Street Journal's Evan Newmark rips Obama for his proposal -- and his rhetoric. "Is President Obama talking to Tora Bora terrorists or Park Avenue bankers when he says: 'So if these folks want a fight, it’s a fight I’m ready to have.'" Newmark concedes that greed and reckless trading has plagued Wall Street but questions the administration's goals and motivations. "Does anyone actually believe the new White House war on Wall Street will remedy any of that?" he writes. "This war is about politics. It’s about a big election loss in Massachusetts. It’s about pushing the blame for the nation’s misery from Washington onto Wall Street."