The press is calling President Obama’s appointment of JPMorgan Chase’s William Daley as his new chief of staff a conciliatory move toward business, a step toward “peace with business“—a “truce.”
And so it is, I suppose.
But what was it when Obama picked Tim Geithner, the Wall Street banks pick as president of the New York Fed, back in November 2008 to be his Treasury Secretary?
What was it when Obama picked Rubinite and hedge fund multimillionaire Larry Summers to head up his economic team?
Or when he picked Wall Street’s approved in-house regulator Mary Schapiro to be his investor advocate at the SEC? Schapiro as head of FINRA cut enforcement penalties— in the midst of the biggest bubble ever and the always-accompanying wave of fraud—by 73 percent during her tenure.
What about picking a lobbyist for big oil and tech companies to head his “vigorous” antitrust effort?
Then there was Michael Froman, who, it took Matt Taibbi to point out, headed up Obama’s economic transition team while he was a bigtime Citigroup executive—while still working for the bank as it was getting bailed out by taxpayers with more than $300 billion.
Here’s how Taibbi put it in Rolling Stone a year ago:
Barack Obama ran for president as a man of the people, standing up to Wall Street as the global economy melted down in that fateful fall of 2008. He pushed a tax plan to soak the rich, ripped NAFTA for hurting the middle class and tore into John McCain for supporting a bankruptcy bill that sided with wealthy bankers “at the expense of hardworking Americans.” Obama may not have run to the left of Samuel Gompers or Cesar Chavez, but it’s not like you saw him on the campaign trail flanked by bankers from Citigroup and Goldman Sachs. What inspired supporters who pushed him to his historic win was the sense that a genuine outsider was finally breaking into an exclusive club, that walls were being torn down, that things were, for lack of a better or more specific term, changing.
Then he got elected.
What’s taken place in the year since Obama won the presidency has turned out to be one of the most dramatic political about-faces in our history. Elected in the midst of a crushing economic crisis brought on by a decade of orgiastic deregulation and unchecked greed, Obama had a clear mandate to rein in Wall Street and remake the entire structure of the American economy. What he did instead was ship even his most marginally progressive campaign advisers off to various bureaucratic Siberias, while packing the key economic positions in his White House with the very people who caused the crisis in the first place. This new team of bubble-fattened ex-bankers and laissez-faire intellectuals then proceeded to sell us all out, instituting a massive, trickle-up bailout and systematically gutting regulatory reform from the inside.
Zoom back to today and Obama’s olive branch to Big Business.
It was just two months ago that the president was in a nasty battle with the U.S. Chamber of Commerce, which fought the president viciously in the midterm campaign. This is the sound of Obama conceding that fight (he’s also going to Chamber headquarters next month for a speech):
Bill Daley is a man of stature and extraordinary experience in government, business, trade negotiations, and global affairs.
That’s Chamber head Tom Donohue on the Daley pick. If he’s so fulsome, you know something’s up.
Why’s he so enthusiastic? Michael Hudson:
William M. Daley, President Barack Obama’s new chief of staff, is a major Wall Street player who sought to loosen corporate reform laws and protect big accounting firms from investor lawsuits and criminal prosecution…
At JPMorgan, Daley’s portfolio has included supervising government lobbying for a bank with $2 trillion in assets that has fought efforts to limit the size of megabanks.
In early 2007, Daley played a star role in the business community’s push to roll back regulations imposed after the Enron debacle and other accounting scandals. Daley co-chaired a U.S. Chamber of Commerce commission that urged the federal government to revise the 2002 Sarbanes-Oxley corporate reform law and protect corporate auditors from lawsuits and investigations.
The New York Times also is good to emphasize the Wall Street lobbyist thing:
He is a top executive at JPMorgan Chase, where he is paid as much as $5 million a year and supervises the Washington lobbying efforts of the nation’s second-largest bank. He also serves on the board of directors at Boeing, the giant military contractor, and Abbott Laboratories, the global drug company, which has billions of dollars at stake in the overhaul of the health care system.
And now William M. Daley, the son and brother of Chicago mayors and a behind-the-scenes political player himself, will hold one of the most powerful jobs in Washington: chief of staff in the White House, where he will help decide who gets into the Oval Office and what President Obama’s Capitol Hill agenda should be.
Might be time to go re-read Simon Johnson’s “The Quiet Coup.”
Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.