The Obama administration is fighting back against banking industry efforts to weaken the president’s plan to revamp financial regulations.
White House officials say they are frustrated that major financial firms are fighting President Obama on the regulatory overhaul after taxpayer bailouts helped firms restore profits and near-record compensation for executives.
Their anger is directed even at companies such as New York-based JPMorgan Chase & Co. and Goldman Sachs Group Inc., which have paid back their government assistance and reported a surge in third-quarter earnings last week.
“The American people have a right to be frustrated and angry,” Chief of Staff Rahm Emanuel said on CNN’s “State of the Union” yesterday. “Banks receiving US aid are literally going and fighting the very type of regulations and reforms that are necessary to prevent, again, a crisis like this happening.”
The issue, according to administration officials, is the banking industry is generally on sound footing because of government help, and lobbying against Obama’s regulatory plans goes against the nation’s long-term interest.
In interviews, speeches and statements, they are highlighting what they say is a disconnect between Wall Street and the rest of the country: while some big banks report compensation plans and profits at pre-crisis levels, the unemployment rate rose to 9.8 percent last month and home foreclosures jumped 29.2 percent from a year earlier.
The tougher message is being repeated from the president on down.
Now is the time for “firm rules of the road so that banks can’t game the system and the financial crisis on Wall Street doesn’t end up hurting folks on Main Street,” Obama said Thursday at a Democratic Party fundraiser in San Francisco.