President Obama took his fight for Wall Street reform to lower Manhattan on Thursday, chiding the financial industry but also asking for its titans to join his cause.
"Ultimately there is no dividing line between Main Street and Wall Street,” Obama said, outlining a series of reforms that he argued were crucial to ending future bailouts. In the wake of Obama’s speech at Cooper Union college, pundits remain skeptical that the president and Congress will truly deliver on the promise of no more bailouts, ever. But many agreed that by investing in Wall Street reform, Obama is on the cusp of reaping political dividends:
“By all appearances, Obama appears to be marching towards a legislative victory on financial reform, with key Republicans sounding increasingly likely to support the measure in the coming weeks,” writes Michael Scherer for Time. “If this does come to pass, it will be a major victory for the President, not only for the bipartisan support his effort can attract, but for the extent to which it moves his presidency beyond the tangle of health care reform.”
The president and future policy makers “had better be very, very smart” since passing Obama’s financial reform bill would turn big banks into “the equivalent of utilities,” warns The Wall Street Journal editorial board. That “may, or may not, reduce the risk of future financial meltdowns and taxpayer bailouts,” but what is certain is that Washington is on the path toward becoming the “new master of the financial universe,” they write.
“13 Bankers” author and MIT Professor Simon Johnson applauds Obama for showing a “shift in attitudes” toward Wall Street but argues it will require heavy lifting to actually make the financial system “significantly safer.” A prominent evangelist of breaking up big banks on his “Baseline Scenario” blog, Johnson calls for grass roots pressure in support of the “Brown-Kaufman SAFE Banking Act,” which would cap big banks’ debt levels.
Liberal economist and New York Times columnist Paul Krugman argues that Obama showed too much deference to Wall Street by pledging not to stifle financial innovation. “The fact is that Mr. Obama should be trying to do what’s right for the country — full stop,” Krugman writes. “If doing so hurts the bankers, that’s O.K.” While Krugman supports Democrats’ financial reform legislation, he calls the bills simply a “first step” on the path to shrinking the financial sector.
Washington Post columnist Eugene Robinson argues that Obama should thank the “misbehaving lords of Wall Street” for helping the president “get his mojo back.” As for whether Wall Street will become any less of a “gambling den,” don’t bet on it, Robinson writes. “No one should believe anyone who says the U.S. government will never, ever, spend a dollar of the taxpayers' money to rescue another financial institution from its own greed and stupidity.”