Reuters global editor at large Chrystia Freeland had an unfortunate column a few days ago in the Washington Post telling the president to play nice with Wall Street.
It’s the second time that Freeland has come to the defense of beleagured businessmen in the last few weeks.
This time she accuses the Obama administration “demonizing business.” As if business has needed much help with that in the last three years.
This paragraph, for instance, leaves much to be desired:
The business case for ill-treatment by the White House is pretty overblown — remember the Troubled Assets Relief Program (initially ringing up at $700 billion) and the gift that keeps on giving: cheap money from the Fed. Yet when it comes to rhetoric, this eloquent president has made critical missteps. The worst came in spring 2009, when he attacked the “speculators” who held Chrysler bonds. He was also out of line in permitting the denunciation of Goldman Sachs; all the name-calling notwithstanding, Goldman is probably the Wall Street firm least to blame for the 2008 crisis.
So wait—Freeland says Big Business’s substantive case for mistreatment by the White House is mostly bogus. But on the optics Obama has been mean. And for evidence we have that he called the arb speculators who bought Chrysler bonds “speculators.” Let’s recall that these were a minority of hedge funds who held out on a deal and bankrupted one of the Big Three in April 2009, when it was unclear whether we were in Great Depression II or what.
The other critical rhetorical misstep there, she says, was Obama being “out of line in permitting the denunciation of Goldman Sachs.” Well… what? The cheap rejoinder to that is that it’s a free country. But really, what’s a president supposed to do? Leap to the defense of Lloyd Blankfein and his multimillionaire boys? And why? Because Goldman (a former Audit funder) was “the Wall Street firm least to blame for the 2008 crisis”?
I can see the presser now: Obama (reading from his teleprompter, naturally) in the Rose Garden: “Let’s all lay off my No.1 corporate donor Goldman Sachs, the Wall Street firm least to blame for the 2008 crisis. Even though they created tens of billions of dollars of CDOs, hawked them to folks while shorting them, sent their former CEOs to Washington to rewrite the rulebooks and favor them, etc.”
And that is where another of Freeland’s arguments swallows its own tail:
Stricter regulation of financial services is necessary not because American bankers were bad, but because the rules governing them were.
How did the rules governing them get so bad? Because the bankers used their outsized influence to benefit themselves.
And it’s just wrong to say or imply that American bankers (and let’s not forget the other players in the financial services area) weren’t breaking the rules.
I’m not sure if we’re seeing a revisionist-history bounce or what. But it’s going to have to be more tightly argued than this to change any minds.
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.