The news media have often taken President Barack Obama's side against banks, portraying bankers as the villains. But that was not the case on "American Morning" Jan. 22.
Business correspondent Christine Romans surprisingly blamed the previous day's stock market slide on "tough new rules" proposed by Obama the same day. According to CNN, Obama wants to limit the size of banks, separate commercial and investment banks, implement trading restrictions and "curb risk-taking."
"That's why the Dow is down 213 points," Romans concluded before supplying the perspective from Wall Street:
"But there's a feeling among many who work on Wall Street, many people who analyze and study Wall Street that this might be going a little bit too far," Romans said. "And remember, it might not do anything to help the banks start lending more, which is the whole problem."
During the 2008 presidential campaign, Americans were treated to a number of populist sermons on the "special interests" who would oppose "reform" at any cost to maintain the "status quo" from which they "profit financially or politically." The drug companies, the energy companies, the Wall Street bankers, and the health insurers were the corporate enemies of a just and harmonious America, or so one might have gathered.
Obama was at the vanguard of this populist charge. But since his election, he has proposed health care legislation that would subsidize Pfizer and PhRMA, a cap and trade plan that would drive profits to General Electric, and Wall Street bailouts that lined the pockets of the same Goldman Sachs bankers he so reviled during the campaign. What happened?
Washington Examiner columnist Tim Carney exposes and investigates this monumental disconnect in his new book "Obamanomics: How Barack Obama is Bankrupting You and Enriching His Wall Street Friends, Corporate Lobbyists, and Union Bosses." Carney explores the "political strategy of partnering with the biggest businesses in order to create new regulations, taxes, and subsidies." Those measures, he argues, actually benefit the biggest businesses by crowding out competition, consolidating market share, or giving billions in subsidies directly to those companies.
But according to "Fox News Sunday" host Chris Wallace, efforts to spin this in a positive way are futile. Wallace appeared on the Fox Business Network's Jan. 21 "Imus in the Morning" program to explain their efforts to alter the news coverage to a favorable tone in the wake of this news is not the proper course of action.
"I think it means a big deal and I have to laugh, you know, somebody was saying yesterday, there's some events that are just un-spinable," Wallace said. "They're just too big, too dramatic, too obvious - you can't spin them and yet the White House clearly is trying to spin this."
"These bank bonuses, I would say, are a sin of Biblical proportions," Wallis said. "But to pick on the banks alone misses the point. It's a symptom, I think of a real erosion of societal values because new maxims have taken us over - ‘greed is good,' ‘it's all about me and I want it now.'"
Last week, in his "analysis" of Barack Obama's proposed "bank responsibility fee," the Associated Press's Jim Kuhnhenn got one important thing right and two others very wrong.
The part he got right was describing the proposed fee as a "tax." The first thing he got wrong was identifying the proposed move as a legitimate form of "populism." The second is his claim that the idea is "straight out of 'It's a Wonderful Life,'" the classic Christmas movie.
Here are Kuhnhenn's first five paragraphs:
It's not just about bad banking.
President Barack Obama's biting criticism of big banks frames the problem as a struggle between jobless, suffering Americans and banks making big profits and paying "obscene" bonuses.
It's populism straight out of Frank Capra's "It's a Wonderful Life," and it aims to score political points in the midst of a weak economic recovery that is fueling public doubts about the president's own economic policies.
President Obama returned to populist rhetoric Jan. 14 when he announced a $90 billion tax on roughly 50 large banks, supposedly to recoup "every single dime" of the TARP dollars used to rescue the financial sector.
Nevermind that a number of those banks including Goldman Sachs, JP Morgan Chase and Morgan Stanley already repaid their TARP debts with interest and were forced to take the money in the first place.
Just recently BB&T's former CEO John Allison, who "adamantly opposed" TARP, told Fox Business viewers how the government strong-armed banks like his, that didn't need loans into taking money anyway.
Now Obama wants to assess billions of dollars in yearly "fees" on those firms. Talk about a raw deal.
According to the Wall Street Journal, the six largest banks - Goldman Sachs, JP Morgan Chase, Morgan Stanley, Citigroup Inc., Bank of America, and Wells Fargo & Co. - will bear most of the burden for this punitive bank tax if it is approved by Congress. The tax bill for each bank would range from more than $1 billion to more than $2.4 billion per year for 10 years the Journal said.
Obama claims the 10-year Financial Crisis Responsibility Fee isn't a "punishment," but the timing and tone of his announcement suggest revenge, not policy.
Former Barack Obama supporter Jim Cramer on Friday said the stock market would have a huge rally if Scott Brown defeats Martha Coakley in Tuesday's special senatorial election in Massachusetts.
"I think investors who are nervous about the dictatorship of the Pelosi proletariat will feel at ease, and we could have a gigantic rally off a Coakley loss and a Brown win," said Cramer on Friday's "Mad Money."
"It will be a signal that a more pro-business, less pro-labor government could be in front of us."
The often outspoken CNBCer marvelously declared it a "Pelosi politburo emasculation" (video embedded below the fold with partial transcript):
It goes without saying that what America's struggling banking industry doesn't need is for all of its depositers to withdraw their funds.
Regardless of this seemingly obvious truth, the folks at ABC and "World News with Diane Sawyer" actually did a report Friday profiling a campaign started by the far-left website the Huffington Post to get people to pull their money from the larger national banks and deposit their savings into "smaller, community-oriented financial institutions."
Although ABC's David Muir pointed out to Arianna Huffington how "a lot of people are going to look at this and say you are encouraging a run on the bank," the network along with the show's producers hypocritically ignored how they were doing precisely that by airing this report (video embedded below the fold with transcript):
While countries like China, Brazil and India are on the path to ascendency, the United States appears to be heading in the opposite direction, according to the former CEO of a major U.S. bank.
In a segment on the Jan. 7 broadcast of the Fox Business Channel's "Stossel," John Allison, the former CEO of North Carolina-based BB&T Corporation (NYSE:BBT), the 10th largest bank in the United States, warned of dark times ahead if the country continues on its current course.
"Now, it's a long-term trend," Allison said. "We will have some kind of economic recovery and we'll have some economic growth. I think the most likely intermediate scenario is stagflation like the 1970s."
The network news media cheered when Obama called for restrictions on CEO pay or bonuses that, according to reporters, exemplify the Wall Street "greed" that toppled the American economy.
But when $42 million in cash compensation packages were announced on Christmas Eve for Fannie Mae and Freddie Mac executives, the networks couldn't muster any anger toward the highly connected groups. Although Fannie and Freddie were two government-sponsored enterprises whose excessive risk taking contributed significantly to the housing crisis, the networks barely reported the story at all.
Salaries and bonuses at American International Group (AIG), Goldman Sachs, Citigroup and others have been criticized in dozens of network reports in 2009.
While much of the national media was focused on a Christmas Eve Senate vote to pass health care reform legislation, the Obama administration's Treasury Department was tending to other business that will have serious implications for the U.S. economy. But did anyone notice?
As Zachary Goldfarb reported for The Washington Post on Christmas Day, the Obama Treasury said it would lift the limits on what the federal government could provide in "emergency aid" to Fannie Mae and Freddie Mac - without seeking permission from Congress. That led CNBC CME Group floor reporter Rick Santelli to ask if anyone noticed and/or realized what was really at stake with this move during the Dec. 29 broadcast of "Squawk Box."
In keeping with the tradition of the holidays - the minds at MSNBC, the place for politics if you're of the lefty persuasion, decided rate the top 10 political stories of the decade.
And leading this gang of masters of the political journalism universe was "Hardball" host Chris Matthews, who on the broadcast of his Dec. 24 program, announced that conservative activism, mainly the tea party movement was the eighth biggest story of the decade - but labeled "angry white voters" (emphasis added).
"Welcome back to ‘Hardball' - our number eight political story of the decade, angry whites at town hall meetings across the country," Matthews said. "Lawmakers heard the wrath of angry voters."
If you believe polls, current Federal Reserve Chairman Ben Bernanke favorability has been slipping. A recent Rasmussen Reports poll indicates that only 21 percent of Americans favor his reappointment as the Fed chair.
And this hasn't gone unnoticed by some members of the Senate, where Bernanke's fate lies. Bernanke's reconfirmation passed through the Senate Banking Committee by a 16-to-7 vote on Dec. 17. But that margin calls into question how his reconfirmation vote on the Senate floor could go. And as CNBC "The Kudlow Report" host Larry Kudlow warned, that puts his reconfirmation in question.
"Look, ‘Helicopter' Ben passed the Senate Banking Committee vote on his reconfirmation," Kudlow said on his Dec. 17 program. "He got 16-to-7, but he lost seven votes. I think all the Republicans except Sen. Bob Corker voted against Bernanke, and they were joined by one Democrat, Sen. Jeff Merkley of Oregon. Now the reconfirmation goes to the floor of the Senate. So, I think Bernanke's reconfirmation could be in some trouble when that Senate vote occurs. I'm going to bet that most, if not all, of the 40 Republicans are going to vote against Bernanke and that they are going to be joined by a number of Democrats."
CNN’s Larry King equated efforts against further regulation of the banking industry to letting the mentally ill run their psych wards on his program on Monday. King pressed conservative columnist S. E. Cupp: “Banks are lobbying against a bill to tighten regulatory controls. Are you going to let the inmates run the asylum? You don’t think we should regulate banks?” [audio clips from the segment available here]
The CNN host moderated a panel discussion on the economy during the first segments of the program. The panel surprisingly leaned to the right on economic issues. Besides Cupp, King had Penn Gilette and Larry Elder, both libertarians, and liberal former Clinton administration official Robert Reich. After the host used the “inmates run the asylum” idiom in his question, the columnist first answered that “we do need regulation, but it’s putting them in a really tough spot.” King interrupted with a blunt one-word question: “So?”
At the top of Monday’s CBS Early Show, co-host Harry Smith enthusiastically proclaimed: “A frustrated President Obama gets set to read the riot act to the heads of America’s top banks.” Minutes later, Smith claimed it would be a “tough day for America’s biggest bankers” as the President planned to admonish them over executive compensation and lending practices at a White House meeting.
White House correspondent Bill Plante followed with a report on the meeting: “...the bankers are likely to get an earful when they meet with the President later today and he previewed some of his frustrations over their bonuses and over their reluctance to make loans on 60 Minutes.” Plante referred to an interview the Obama gave to 60 Minutes’ Steve Kroft Sunday night, but none of the Early Show coverage mentioned the numerous parts of that interview in which Kroft grilled the President on topics ranging from Afghanistan to health care reform.
NBC's Matt Lauer, on Monday's Today show, in his first question to RNC Chair Michael Steele, asked if opponents to Barack Obama's health care reform bill, were going to deprive the President of politically joyous holiday season, as the Today co-anchor pressed: "So is the President's stocking going to be empty on Christmas Day?" Lauer then went on to question if the Republican's entire strategy was that of simply "delaying and stalling," as seen in the following exchange:
MATT LAUER: Let's talk about health care reform. The President says he thinks the Senate will pass his version of the bill by Christmas. Joe Lieberman says he's not voting for it in it's current form. So is the President's stocking going to be empty on Christmas Day?
On his first day as the new co-anchor of Good Morning America, former Clinton aide turned journalist George Stephanopoulos lobbied for a windfall profits tax on the bonuses of bankers. Also on Monday’s program, senior White House advisor David Axelrod reminded viewers of Stephanopoulos’ liberal background. [Audio available here.]
After the rookie GMA host asserted that Axelrod "has an office right next to the President," the Obama official retorted, "Used to be your office, George." A laughing Stephanopoulos quickly spun, "That’s right. A long, long time ago."
The journalist clearly hasn’t lost the habits of a Clinton-era Democrat. He pressed Axelrod for new taxes on the bonuses of bankers: "David, why not tax the bonuses? Britain last week announced that they're going to have a big windfall tax, a one-time tax on these big bonuses this year because the banks got so much help. Why not do that?"
In the latest of a series of White House - media head-on confrontations, Jared Bernstein, the chief economist and economic policy advisor to Vice President Joe Biden, took on the Wall Street Journal in a Dec. 1 post on the federal government's WhiteHouse.gov Web site.
"There's a new report out from the Congressional Budget Office (CBO) on the economic impact of the Recovery Act," Bernstein wrote. "I'll get to the findings in a second, but somebody over at the Wall St. Journal's editorial page has a whole lot of explaining to do."
On yesterday's CNN Newsroom, anchor Kyra Phillips shifted to "Bad Boys" mode:
Lenders, lenders -- what you gonna do when they come for you? Call it an early Christmas present for people on the edge of losing their homes. The Obama administration cracking down on mortgage companies.
We'll tell you about it.
After the break:
PHILLIPS: Well, from your health (ph) to your home, the foreclosure crisis shows no signs of letting up, so the Obama administration is trying to fight back.
"You had me convinced - yes, he was. But you had me convinced that Jeremiah Wright and Bill Ayers and some of these people are all going to be in the Cabinet. We'd be better off if they were," Imus said.
On Fox's Nov. 22 "Fox News Sunday," former "Special Report" anchor and Fox News senior political correspondent was dead spot on target in many regards when it came to criticizing the tack President Barack Obama has taken with his foreign policy gestures.
First, Hume reflected on how Obama reacted on his trip to Asia last week. He noted that Obama was in a tough position, having to rely on borrowed Chinese money. However, "embracing weakness" was not the proper way for Obama to represent the country in Hume's view (emphasis added).
"Look, the president is in a weaker position than he might have been, not least because his policies have contributed mightily to the immense amount of new borrowing that's being done, much of it from the Chinese," Hume said. "So now you have the Chinese even worried about the size of the health care plan. That is unfortunate. But this president seems quite willing to embrace weakness as a position for the United States. I mean, the bowing and scraping that we see -- Saudi Arabia we saw it. We saw it on this trip in Japan."
But it is also something that some in the financial media are reluctant to support, especially judging from the tone of CNBC "The Call" co-host Trish Regan and comments CNBC senior economics reporter Steve Liesman. On the Nov. 20 broadcast of "The Call," CME Group reporter Rick Santelli made the case that Federal Reserve should be audited. He cited opposition to the Fed audit proposal from Sen. Judd Gregg, R-N.H., which was based on Congress' inability to be fiscally responsible.
"He said, ‘You know, there independence is important to protect the soundness of the dollar,'" Santelli said. "Has he read any papers lately or looked at any charts? Come on. Amen, amen that this process is happening. They're not taking away their independence to make a decision on interest rates. We need to know where the money is going. I remember when Ben Bernanke faced committees of elected officials and said, ‘We can't audit the Fed because then you might look unfavorably on some of the counterparties we deal with. That's like finding paraphernalia under your kids bed and then not asking where he got it."
Joe the Plumber was certainly on to something when he got then-candidate Barack Obama to admit he wanted to redistribute the wealth, according to former Republican presidential candidate and Arkansas governor Mike Huckabee.
Huckabee, who now hosts a show aired on the weekends on the Fox News Channel, told "On The Record" host Greta Van Sustren on Nov. 16 that Obama's policies go beyond just the redistribution of wealth, especially on health care. He likened a provision in the House health care bill that would require people to have some sort of health care coverage to a "poll tax."
"[W]hile we really wish [the president's priorities] were recovery, getting jobs back - that's the number one thing we ought to be focused on - but it appears to be redistribution," Huckabee said. "That's what's going on in the health care world, where we're trying to make sure that we've redistributed health care, taking it from people who have it, taking from them, giving it to people who may not even desire to have it, and forcing people into an unconstitutional system where they're going to have to virtually pay into a private marketplace in order to get full rights of citizenship. It's the equivalent of a poll tax."
According to Dimon, regulators should be given "authority to facilitate failures," wipe out shareholders and unsecured creditors, fire management and liquidate assets.
Dimon said this is better than the alternative: "This is challenging but worth doing. The alternatives, neither of which is acceptable, are to perpetuate the politically, economically and ethically bankrupt "too big to fail" idea, or to try to impose artificial limits on the size of U.S. financial institutions."
Disclaimer: we're talking politics here, not personal stuff . . .
If there's a bigger sourpuss in Congress than Barney Frank, I wouldn't want to meet him. On MSNBC this evening, the dyspeptic Member from Massachusetts got into it with, of all people, Ed Schultz. You might think the two libs would make beautiful progressive music together, but what made this spat especially entertaining was that Barney found himself being attacked . . . from the left.
The topic was the billions in bonuses awarded by Wall Street firms that had received TARP money. Schultz's beef was that Congress blew it by awarding TARP dough without obtaining advance agreement limiting bonus payouts.
"[I] think we're building a stairway to heaven in Dow prices on the back of paper and I think that, you know it seems kind of dire to me that 8 percent - 8,000, 9 percent - 9,000, 10.2 - 10,000," Santelli said. "I shudder to think where the unemployment rate is going to be at 11 and 12,000 in the Dow."
There's a lot of uncertainty with the U.S. economy and a lot of its recovery hinges on some key policy decisions due from the federal government.
On CNBC's Nov. 2 "The Kudlow Report," CNBC host Maria Bartiromo discussed her interview with former Chairman of the Federal Reserve and Obama adviser Paul Volcker from the Global Financial Leadership Conference in Naples, Fla. One of the topics Bartiromo reported on from the conference was the possibility the Bush tax cuts would be allowed to expire, which she insisted is unlikely.