Obama Takes on Wall Street Bankers

Later today, President Barack Obama will announce the application of new fees on those financial institutions that received the greatest benefit from taxpayer largesse. The announcement comes at the height of the banking “silly season” when it seems that every day, we hear of millions more in bonuses to be paid to the very same executives that allowed the near-fatal collapse of the banking system on their watch.

[mserve id=”US_President_Barack_Obama.jpg” align=”left” width=”400″ caption=”US President Barack Obama” alt=”US President Barack Obama” title=”US President Barack Obama”]

No matter which side of the debate you fall on this issue, we can all certainly agree that from a publicity standpoint, the optics on this are beyond terrible. Unemployment continues to trend at 10 percent in the US with “real” unemployment likely double that figure. Bank profits however are on the rise and with them, pay-outs to executives and this is where it gets sticky. If it had not been for the billions in taxpayer dollars handed practically restriction-free to America’s banks, then there could well have been many more failures on the scale of the Lehman Brothers implosion.

The need to save the US banking sector from a crisis largely of its own making notwithstanding, there is no denying that the banks relied on taxpayer dollars to not only survive, but outright thrive even as much of middle class America continues to suffer. It is this reality that has so many people up in arms. After all, how much of a financial genius do you have to be when the government waits in the wings with buckets of public money to ensure your survival.

Yet, rather than acknowledge the role that public money played in saving the banking system, executives insist on patting each other on the back all the while claiming victory in defeating the crisis. And by patting themselves on the back, I mean giving themselves millions in bonuses that they defend as something they earned due to their own hard word and diligence.

Don’t get me wrong – I am the furthest from being anti-capitalist – I whole-heartedly support for-profit businesses paying those that ensure the success of the firm generously, if not at least appropriately. However, in this case, you have to question the wisdom of paying such huge bonuses given the overall state of the economy. Talk about rubbing the public’s face in it.

Ultimately, it was these very actions that forced the Obama administration to do something – anything – to show the populace that the government is on the side of the taxpayer. The fact that the administration’s approval numbers have plummeted as an ever-greater number of people question the government’s priority, only sealed the fate of the banks.

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