On Sunday’s Meet the Press New York City Mayor Michael Bloomberg said that “we need to stop demonizing Wall Street and all work together for the good of the country.” At least he got one part right. Because if Wall Street has been demonized, it’s safe to say the Pope’s favorite number is 666. There’s been a lot of talk in President Obama‘s administration, but very little action, when it comes to Wall Street and their antics, which were partly responsible for the home foreclosure crisis and completely responsible for the risky investments that led to billion dollar bailouts shortly thereafter. It’s past time for President Obama to get aggressive.
Wall Street, of which Mayor Bloomberg is a billionaire alum and continues to rely on for his tax base, should be thankful and conciliatory, not defiant and obtuse. Yet in response to Occupy Wall Street protests, we get this:
“Instead of vilifying our most successful businesses, we should be supporting them and encouraging them to remain in New York City,” expressed John Paulson, a billionaire hedge fund trader, in a press release that also described his “$28 billion, 120-person fund as an exemplar of the American Dream.”
That’s not the mark of a man who is in touch with the reality so many Americans are currently facing.
And even though Wall Street received one of the biggest bailouts in history from the current administration, they support Mitt Romney (a millionaire alum) by a 5-1 margin, while President Obama fuddles with a foreclosure crisis he can’t avert, and is hastening to approve a weak multi-billion dollar settlement with lenders over foreclosure abuses. If that weren’t enough, President Obama is suggesting that he is willing to waive certain requirements of Sarbanes-Oxley in order to motivate corporations to hire new workers. This defies logic for two reasons:
(1) Relaxing rules that were just passed by Congress to better regulate public companies will only lead to all stakeholders — businesses, consumers, and Congress itself — realizing there’s no commitment to regulatory change.
(2) Worker productivity, the measure of output of each worker, has been high for years as the economy struggled through a recession and businesses cut back on labor expenses. But it really couldn’t get much higher, because there are only so many hours each employee can work — the manufacturing sector saw, “the largest quarterly gain in hours worked since the fourth quarter of 2005,” according to the Bureau of Labor Statistics. Businesses are bound to start hiring once consumer demand returns to its regular levels. No amount of administration kowtowing or rule bending will change that. And increasing consumer demand starts with consumer confidence (which, by the way, has increased for five straight months, something the administration does deserve credit for), not allowing businesses to do as they please.
Ironically, at a time when there couldn’t be both better timing and a better platform in which to deliver an economic message with populist zeal, the administration has wasted its opportunities: Occupy Wall Street has brought income inequality to the forefront of politics for months; the GOP frontrunner, Mitt Romney, pays one of the lowest tax rates of any major presidential candidate in the last 25 years; the man who trails him, Newt Gingrich, wants to enact a tax plan that would have Romney paying a 0% rate on the far majority of his income (which is capital gains and is currently taxed at a 15% rate). Next thing you know, Gingrich would be suggesting the government pays millionaires to earn an income. As I noted in an article last month, most taxpayers don’t have that much capital gains — only 1.4% of taxpayers’ incomes mostly consist of them. So Newt’s plan is fully focused on the 1%. But what about the rest of us?
It’s past time that President Obama tell the American people what’s in it for them. Because the 1% is not looking to save him.
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