The Obama Administration's Pivot and what to watch for......

FrenchieCat

(1000+ posts) Send PM | Profile | Ignore

Sun Jan-24-10 06:54 PM
Original message

The Obama Administration's Pivot and what to watch for......

Edited on Sun Jan-24-10 07:27 PM by FrenchieCat

So as we wait for the SOTU address, many want to know, where's the change, and how will we know it is that and not some slight of hand to keep us "hoodwinked"?

Some will say "words are just words, no matter how perdy" (from the primaries),
or "he talks the talk, but we need him to walk the walk, like yesterday"(Skeptical doubters),
to the "oh sure, whatever.....I've seen this before" (total cynicism)
While the most extreme won't watch the SOTUA because they feel about Pres. Obama as they did Bush,
because for them, the two have become one in the same (Consistent Distractors, 3rd party advocates)

First off, I don't believe that Obama has actually pandered to us yet (to my chagrin), so I don't think that he will start now. It would be one thing if he had thrown a few things our way, but there are some easy things he could have done to pander (even if it was just to talk trash, which he actually hasn't done, and which is a big complaint; not nuff trash talking) and they didn't materialize.

Now, most are looking for some specific action, and hopefully, we get hints as to what is to come in the SOTUA.

The biggest issues of course are financial regulation reform, health care reform and the economy. Everything else has to get in line after that.

So here's what I've seen as an indicator of renewed hope, only up to the generally cynical. I don't think anything I post will actually alleviate the "concerns" of the total cynics or the distractors, cause I'm not magic either.

But in reference to the Banking Regulations, what I see as the pivot signs are as follow:

My understanding is that the Bank break up announcement was set for earlier,
but was postponed due to the events in Haiti.

The interesting part of this story is that Obama and Volcker actively went to work on this in early December (about the same time as Volcker came off the reservation and started making more frequent speeches) after discussions that took place in October and November.

It'll hurt if Volcker has his way
The former Fed chief's tough tactics curbed an '80s downturn. He has a similar prescription as an Obama advisor.

December 08, 2008

Now Volcker is back, tapped by Barack Obama as a special economic advisor. And if the president-elect follows his advice on the current economic crisis, there could be pain again and no doubt many protests -- but also the possibility of long-term benefits.

In speeches, interviews, public policy reports and congressional testimony, Volcker, 81, has laid out a fairly clear outline of what he thinks is wrong with the present-day financial system and the government's management of the economy.
snip
Clearly, he wants tough new regulations on securities markets, including oversight of hedge funds, in order to avoid the need for a bailout effort by the Fed ever again. It seems likely that he will advise Obama that the growth of U.S. consumption -- everything from government spending to household outlays -- should not be financed by selling ever larger amounts of debt to foreign interests.
http://articles.latimes.com/2008/dec/08/nation/na-volcker8

a week or so later, Obama held a meeting with Bankers....

Obama to banks: 'Rebuild our economy'
By Jennifer Liberto, CNNMoney.com senior writer
December 16, 2009:
President Obama pressed Wall Street bankers at the White House on Monday, urging them to make more loans and modify mortgages to help taxpayers who propped their banks up with federal bailouts.

"My main message in today's meeting was very simple: America's banks received extraordinary assistance from American taxpayers to rebuild their industry," Obama said. "Now that they're back on their feet, we expect an extraordinary commitment from them to help rebuild our economy."

In his public statement after the meeting, Obama said he also took bankers to task for lobbying "vigorously" against parts of the financial legislation to reshape the regulatory system and prevent future financial crises.

"Short-term gains are of little value to our banks if they lead to long-term chaos in the economy," he said. "I made very clear that I have no intention of letting their lobbyists thwart reforms necessary to protect the American people."

The bank executive who attended the meeting said the president asked bankers to support financial regulatory reform, and everyone in the room appeared to agree with him.
We share the President's goals of strengthening lending to all sectors of the economy, helping homeowners avoid foreclosure, aligning compensations practices with long-term risk horizons, and modernizing the regulatory framework," said group president Steve Bartlett.
http://money.cnn.com/2009/12/14/news/economy/Obama_bankers/index.htm

They seemed unmoved, and some didn't even bother showing up, and so,
the very Next day, Volcker started flexing his muscles....

December 17, 2009

Now that Paul Volcker has picked up his hammer, he will not lightly set it aside. He knows how to sway the policy community and he knows how to escalate when they don’t pay attention. Expect him to pound away until he prevails.
http://baselinescenario.com/2009/12/17/paul-volcker-picks-up-a-bat/

As I understand it, the bankers were kept in the dark about these new proposals. The story started to leak last Tuesday afternoon and when the bankers started calling the WH yesterday for an explanation, they did not get a warm reception.

Meanwhile, Obama welcomes (by the Left) a new face inside of the White house....

The woman Democrats need

ON THE day after Tuesday’s electoral loss, the Obama administration brought an unfamiliar face to the White House - Elizabeth Warren, the Harvard Law professor noted for her staunch advocacy on behalf the middle class and fierce criticism of the bank bailouts. Perhaps the administration will take a more aggressive approach to Wall Street, along the lines of what Warren wants. But for Democrats to truly take ownership of the economic crisis, Warren will need to play a more prominent role. Not just her ideas, but the force of her personality is needed.
http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2010/01/24/the_woman_democrats_need/

All in all, I don't believe these moves have been made for "posturing" purposes, as it is too much trouble to go through just for the sake of throwing crumbs....

Policy Pivot on Banks Followed Months of Wrangling

Former Fed Chairman Volcker, With Backing From Biden and Axelrod,
Helped Shape Obama's Tougher Stance on Banks

Mr. Kanjorski was pushing an amendment to the House's financial-regulation bill that would clamp down on big banks. With the amendment gaining momentum, Mr. Geithner dispatched Michael Barr, an assistant secretary at the Treasury and confidant of Mr. Kanjorski, to help shape it. That month, Mr. Geithner testified before the Financial Services Committee that he backed the amendment's scope.

Treasury officials feared headlines would blare that Mr. Geithner had backed breaking up the banks. But the president continued to endure criticism, in particular from his left, that he was coddling Wall Street. In talks with his financial team, Mr. Obama started letting his frustration show, asking why he was on the wrong side of the "too big to fail" debate.

White House officials said the president called a meeting of his entire economic team to press for additional proposals. But its members were at odds: Messrs. Geithner and Summers argued that proprietary trading was a problem but not a central cause of the financial crisis, according to an official familiar with the talks. Mr. Volcker saw proprietary trading as a fundamental risk.

In December, Mr. Obama decided he wanted to be on what he saw as "the right side" of the debate, according to an administration official. He asked his team to bring him specific proposals to limit the size of financial institutions and halt proprietary trading. Spurring their thinking: Goldman Sachs had sought the protection of the Federal Reserve during the financial crisis, and was now making big profits from its own trading, in part because it benefited from the explicit backing of the U.S.
http://online.wsj.com/article/SB10001424052748704423204575017543560874692.html?mod=WSJ-Markets-MIDDLETopNew

So my point is, I think we are about to turn a corner,
and even in my own estimation (as head cheerleaders, as I am called),
it's more than about time.

We shall see when all is said and done,
but I wouldn't bet my house against it.

I believe that we will hear similar messages on Health Care and the Economy,
So I'm gonna believe that new WH messaging is on it's way....
cause needless to say, it is almost past time.

To some degree, I see Plouffe as taking over a large part of
Rahm's job....
Just like I see Volcker taking a big chunk of Geithner's job,
while Elizabeth Warren will get a smaller chunk still...
which frankly to many, this should be an encouraging sign;
the fact that someone learned some lesson about something....

Obama's Campaign Champion Pulled Back In

Plouffe is taking on an expanded role as an outside adviser to the president, and he will focus on strategy for November's Senate, House and gubernatorial races.

Plouffe's team will aim to detect problems early, and alert the White House and Democratic officials if a candidate is falling behind. The party was caught off guard by Brown's surge in the Massachusetts race, and reacted too late to keep the seat.

After the presidential election, Plouffe chose not to follow Obama to the White House. He returned to the private sector and wrote a book about the campaign called The Audacity to Win. He has remained in touch with the president and his political team, however, and now the administration is looking to him to help the White House regain the political momentum of President Obama's 2008 campaign.

http://www.npr.org/templates/story/story.php?storyId=122922463

Some will poo-poo this as being "all for show", but somehow, I just don't believe that this is the case. There are many things one can say about Barack Obama, and one is that he is quite transparent, in most of his moves. Accordingly, these moves are being made for a reason, and I don't think it strictly about elections (although there is nothing wrong with that, but still). I think it has to do with the fact that the entire enchilada was quickly getting away from this new President, and like any new president, it is time that he gets a handle back on things. He'll have to take his lumps and get to fighting.

Look, Obama's not perfect, and he has without a doubt made his mistakes, but I also believe that it's not too late, nor should it be, and that labeling anything "fatal" would be our mistake.

Those who want to down him while he is doing this "correction" simply because they think it should have happened before now, or we shouldn't have ever been in this situation, than be my guest... but whether the same criticism that we have heard time after time will actually help us advance us any further down the road is questionable....but of course, Please do it, if you feel so compelled.

PS: As for the Neener-neener Conservatives/GOP/Freepers who patrol this forum as they sit on their high above vulture perches and the Anti-Obamas who like mad laughing Hienas both wait for our country to fail, please go ahead and side with the banks on this one, why don't ya? :rofl: