×
The Wall Street Journal has a long piece this morning detailing how the Obama administration learned to stop worrying and love Wall Street. After an apparent initial burst of apathy, the White House began trying to make friends in February. They held pizza parties with traders to talk about the mortgage plan! Obama began referring to the CEO of JP Morgan as "Jamie!" But Wall Street, of course, isn't anyone's friend. And when it came time to build the banking plan, the traders decided to apply some leverage:
Bankers were shell-shocked, especially when Congress moved to heavily tax bonuses. When administration officials began calling them to talk about the next phase of the bailout, the bankers turned the tables. They used the calls to lobby against the antibonus legislation, Wall Street executives say. Several big firms called Treasury and White House officials to urge a more reasonable approach, both sides say. The banks' message: If you want our help to get credit flowing again to consumers and businesses, stop the rush to penalize our bonuses.Classy. The Obama administration quickly assured Wall Street that they didn't support the bonus caps. And this might also explain some of the administration's weirder rhetoric, like Christina Romer's contention that, "What we're talking about now are private firms that are kind of doing us a favor, right? Coming into this market to help us buy these toxic assets off banks' balance sheets. They are firms that are being the good guys here—coming into a market that hasn't existed to try and help us get toxic assets off banks' balance sheets."But I guess that's Wall Street for you. They'll let you do 90 percent of the work a project, makes sure you'll take the blame if it fails, but will also be right there to take the credit if it succeeds. And they'll call that a favor.
