Obama’s Anti–Wall Street Jag
Obama needs a villain as long as he can't plausibly tout his own record.


Rich Lowry

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We want our money back” is a battle cry you’d expect from a tea-party rally. Such lack of nuance. Such grasping materialism. Such us-vs.-them populism.

All the great and good should be expected to recoil from such a grubby sentiment. If it weren’t for the fact that Pres. Barack Obama has made the line the centerpiece of his call for a new tax on banks. A year into his presidency, Obama is attempting a brazen misdirection.

The old axiom is that “those who can, do; those who can’t, teach.” In the political context, those who can, brag about their successes; those who can’t, find a handy enemy to vilify. With his signature legislative initiative of health-care reform deeply unpopular and his $787 billion stimulus plan failing to deliver as promised, Obama is going after the banks and won’t hesitate, in the immortal words of George Wallace, to put the hay down where the goats can get it.

In his eleventh-hour speech in Boston boosting Martha Coakley’s troubled Senate candidacy in Massachusetts, Obama said: “Martha is going to make sure you get your money back. She’s got your back. Her opponent has got Wall Street’s back.” Subtle.

Obama’s hackish anti–Wall Street jag tests the proposition, Whom do people despise and mistrust more? The bankers who nearly went bust but for a government bailout, or the politicians who bailed them out and now want to tax them under false pretenses?

There are only two things wrong with Obama’s “get our money back” justification for the bank tax. 1) He’s largely going to tax institutions that have already paid back their TARP injections, with interest. He leaves untouched the real sinkholes for federal funds — the bankrupt automakers, Fannie Mae and Freddie Mac, and AIG. 2) Taxpayers are unlikely to see a dime of the revenues from the bank tax, which will be devoted to whatever spending priority Congress alights on next.

The tax is a transparent political ploy, the only kind of transparency Obama has actually delivered. It even has a stereotypically Orwellian name, the “Financial Crisis Responsibility Fee” — because in Washington, the only two things that are inevitable are death and slippery names for new taxes.

There’s a genuine public-policy concern here: The “too big to fail” major banks have an implicit government guarantee. There should be a resolution mechanism to take over and unwind these institutions in an orderly fashion when they fail, the way the FDIC does with smaller banks. If a new tax were intelligently dovetailed with such an effort, it might make sense. But a punitive approach better suits Obama’s political needs.

He needs a villain as long as he can’t plausibly tout his own record. The Associated Press reported the other day that its analysis “found there was nearly no connection between stimulus money and the number of construction workers hired or fired since Congress passed the recovery program.” The stimulus has succeeded most directly at “saving or creating” government jobs, reinforcing the impression that government is fattening itself as the rest of the economy struggles.

Obama obviously wins any popularity contest with, say, Jamie Dimon, the head of JPMorgan. But his angry rhetoric comes at the cost of reinforcing the perception that he’s an ideologue. If he finds temporary comfort in the stale populism of an Al Gore or a John Edwards, it will hurt him ultimately to sound like another cookie-cutter Democratic pol.

Obama’s curse is that most of what made him so winsome in 2008 was a pose. If he had been serious about a new kind of politics, he would have stood up to Nancy Pelosi and tamed his own runaway ideological ambitions, but that would have been hard and uncongenial. Now, he resorts to the easy expedient of dumping on Wall Street in a paint-by-numbers political play — negative, poll-driven, dishonest, eager to cast about for someone to blame.

It’s why, given a choice between Wall Street and Washington, most people will take neither.


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