Obama to Wall Street: Regulation is Good for This Country
WASHINGTON - President Barack Obama has played bad cop in confrontations with Wall Street, but on Thursday he tried to be a good cop, too.
In trying to sell a financial reform package in limbo in Congress, the president straddled the line between scolding and cajoling, appealing to the patriotism of a Wall Street establishment he once referred to as "fat cat bankers."
Obama urged Wall Street executives to join, not fight, the reforms, "not only because it is in the interests of your industry, but because it is in the interests of our country."
The president said he believed in "the power of the free market" and a "strong financial sector," but he added: "A free market was never meant to be a free license to take whatever you can get, however you can get it."
The push got a relatively warm response from an audience that included some Wall Street executives that Obama referred to in his speech as "titans" of industry.
But applause was not universal. Although Obama pleaded for bipartisanship, Republicans in Congress have not signed onto a package that could come to a head in the Senate next week.
Shortly after Obama spoke, the Competitive Enterprise Institute put out a statement warning that the reforms being debated in Congress are so broad they could put Main Street businesses under Federal Reserve control. Others have said the proposals being pushed by Democrats would still leave taxpayers liable for future big-bank failures.
Obama said that was "a good sound bite, but that is not actually accurate. It is not true,"
The president accused opponents of unfairly characterizing the aims of the package, which he said were to protect taxpayers while ensuring that complicated financial instruments like derivatives would be policed more closely.
The president said it was a "false choice" for partisans to make the debate between "unfettered markets" on one side, and "markets that are stymied by onerous rules" on the other.
"Ultimately, there is no dividing line between Wall Street and Main Street," Obama said.
Obama faces political opportunity and peril on this issue.
Many Americans are angry about the government bailout of banks and huge Wall Street bonuses, some of them in companies bailed out by taxpayers.
But conversely, one of the common criticisms of his recently passed health care reform is that it would increase government intrusion into people's lives.
More personally, Obama - who promised to shut the "revolving door" between government and industry - has not been helped by fellow Democrats.
Politico.com this week reported that former Democratic congressional leaders Richard Gephardt and Tom Daschle advise firms that lobby for Wall Street companies. And Obama's former chief counsel, Greg Craig, was recently hired to advise the Wall Street giant Goldman Sachs, which the Securities and Exchange Commission last week charged with fraud and misleading investors.