While leisurely browsing the FT on Friday it is possible that you may of come across the co-location of two articles that, although directly applicable one another, contained no mutual consideration. These articles, considering respectively President Obama’s bite into banks (see article) and the US Supreme Court’s ruling on Thursday to lift spending limits of corporations during campaigns (see article), cry out from the page to a major implication that is seemingly not consider elsewhere.
“It’s payback time for Wall Street” the initial article begins, but a successful crack down on the banks, which have led discussions in American and the World about the way financial services are conducted for the past 20 years, is at best unlikely.
Goldman Sachs’ declared net profits in 2009 of $13.4 billion, alongside bonus packages of $16 billion, dwarfing the 2006 Midterm election spending. Suggesting that the ruling will “make it much harder to get… …common-sense financial reforms” Obama has clearly become master of understatement. Today the crackdown has not only to face the already strong Wall Street lobbyists in Washington, alongside Republicans who want to see Obama unable to progress on key election promises, but will confront a record spend on election campaigning by corporates that may not be matched for many decades to come.
John Gapper, of the FT (01/22/10), writes that:
“Banks, which are good at making financial bets, have been bad at making political ones”
The statement that banks have been good at making financial decisions does not stand out as the most apparent truth, but the idea that banks are not politically adept is, frankly, naive. The next step for Obama to take is far from clear, but for success in both his financial and healthcare reforms the decision of the Supreme Court needs to be mitigated. Obama may be keeping his characteristic cool for now but lets see what happens as we get closer to November.
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