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Obama hits banks, taps anger over Wall St

By Haris Afzal on Saturday, October 8, 2011 with 1 comment

Obama hits banks, taps anger over Wall St

WASHINGTON: President Barack Obama launched an onslaught against banks and Republicans on Thursday for working to

block financial reform, using a populist tone amid public anger over Wall Street practices.

Obama, a Democrat who is fighting for re-election in 2012 against a backdrop of high unemployment, said his Republican

opponents' primary plan to boost the economy involved rolling back Wall Street regulation his administration fought to pass.

The president also pressed Congress to approve his $447 billion jobs package and said he was "comfortable with" a proposal

by fellow Democrats to pay for the plan with a tax on millionaires. John Boehner, the Republican speaker of the House of

Representatives, accused Obama of political campaigning.

Obama spoke at a White House news conference after thousands of anti-Wall Street demonstrators protested at New York's

financial district and in several U.S. cities this week over economic inequality and financial institutions' power.

"I think people are frustrated and ... the protesters are giving voice to a more broad-based frustration about how our financial

system works," Obama said.

"What we've seen over the last year is not only did the financial sector with the Republican Party and Congress fight us every

inch of the way, but now you've got these same folks suggesting that we should roll back all those reforms and go back to the

way it was before the crisis."

Obama noted the "Dodd-Frank" financial reform bill he championed was designed to prevent Wall Street abuses, and his

emphasis on the subject indicated he would use the theme heavily in the 2012 presidential race.

Banks, he said, "can't be competing on the basis of hidden fees, deceptive practices or, you know, derivative cocktails that

nobody understands and that exposed the entire economy to enormous risks."

Vice President Joe Biden and a U.S. Federal Reserve official also expressed sympathy for the protesters, but some investors

said Obama's populist tone was misplaced.

"If these statements were coming from a lowly congressman, that's one thing, but this is the president. It's class warfare at its

finest, or at its worst," said Marshall Front, chairman of Front Barnett & Associates, which has $600 million in assets and

owns bank stocks.


Bank of America said last week it planned to charge customers who use debit cards to make purchases a $5 monthly fee.

Obama said recent hikes in fees charged by banks were likely unfair to consumers. He said it was appropriate for the

government to play an oversight role.
The depth of that oversight is as much a political issue as it is a financial one.

"You've got Republican presidential candidates whose main economic policy proposals is, 'We'll get rid of the financial reforms

that are designed to prevent the abuses that got us into this mess in the first place,'" Obama said.

"That does not make sense to the American people. They are frustrated by it, and they will continue to be frustrated by it until

they get a sense that everybody's playing by the same set of rules."

House Speaker Boehner said Obama had "given up on the country" to focus on his re-election rather than working with

Republicans to boost the economy.

"Mr. President, why have you given up on the country and decided to campaign full time instead of doing what the American

people sent us all here to do?" Boehner said.

Though criticizing Wall Street can tap into populist support, it could hurt Obama's campaign pocketbook. Like other

presidential candidates, Obama is courting Wall Street contributions for his political goals.

Obama already has a tenuous relationship with some in the financial community for his harsh rhetoric about corporate

compensation at the beginning of his term.

"It is pretty clear that the Obama 2012 campaign is going to try to take up the theme of economic populism -- how they

(Obama and Biden) are the only ones standing in the way of the banks and corporations taking over Washington," said Paul

Sracic, a political scientist at Youngstown State University in Ohio.

New York City protests over income inequality have spread to other U.S. cities. They were underway or planned on Thursday in

Austin, Texas; Tampa, Florida; Washington, and Houston.

"We have a very frustrated people, and I can understand their frustration," Dallas Fed President Richard Fisher told a group of

business people in Fort Worth, Texas.
"We have a very uneven distribution of income. We have too many people out of work for too long.


During his White House news conference, which lasted more than an hour, Obama continued a sales pitch for his jobs

package, saying it was necessary to avoid another recession.

Republicans say the proposal -- a mix of stimulus spending and tax cuts for workers and small businesses plus an end to

some tax breaks for corporations and the rich -- will never pass as a whole but that certain parts are worth considering.

Some Democratic lawmakers are also not fans of the bill. In response, Senate Majority Leader Harry Reid said he would

substitute a new millionaire's tax for some of the tax hikes Obama had proposed in order to win more support.

Nevertheless, Republicans are still expected to block the measure in the Democratic-controlled Senate and it faces stiff

opposition in the Republican-cont6th Int’l Expo Pakistan from 20throlled House of Representatives.

Category: Business News



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