Links: 2010-01-22

Obama and the War on Wall Street

Yesterday’s announcement on bank regulation by President Obama is a key turning point in his Presidency.  It means a whole new world of uncertainty for banks and bank stocks and could be just the beginning of a broad-based crack down on Wall Street – and that is bearish for those stocks, if not the broader market.

Somewhere along the line, Obama realized that he was on “the wrong side” of the too big to fail debate. The ‘Policy Pivot’ Wall Street Journal article attests to this, quoting anonymous sources saying his shift to “the right side” of the debate has been coming for a long time.  The political loss in Massachusetts was a catalyst.

  • Barack Obama’s speech on banking reform: in full – Telegraph
  • FT Alphaville – The Volcker rule, the European analysts react (part II)
  • FT Alphaville – The Volcker rule, the US analysts react (part I)
  • Geithner aired concern on bank limits-sources| Reuters
  • Policy Pivot on Banks Followed Months of Wrangling –
  • Barack Obama and the banks: At last, action | Comment is free | The Guardian
  • / Columnists / John Authers – The ‘Volcker Rule’ as a modern-day Glass-Steagall
  • / Comment / Editorial – Obama in declaration of war on Wall Street
  • – Obama hammers Wall Street banks
  • – UK Tories set to follow Obama
  • Obama’s New Banking Regulations Leaked To Insider Traders

    What I find interesting about Massachusetts is the commentary by Pat Buchanan on the outcome there and in New Jersey and Virginia in November. He asks Has Obama Lost White America?, noting that there has been no shift in support for Obama by Black Americans, but an enormous erosion in support by White Americans.

    Buchanan says:

    If Republicans will study the returns from Massachusetts, then review the returns from Virginia and New Jersey, light will fall upon the path to victory over Barack Obama in 2012.

    Obama defeated John McCain by winning the black vote 24 to one, the Hispanic vote two to one and taking a larger share of the white vote, 44 percent, than did John Kerry or Al Gore. As the white vote was three-fourths of the national turnout, Obama coasted to victory…

    How did Scott Brown turn that 26-point deficit into a six-point victory? By winning the white vote as massively as did Obama. While there are no exit polls to prove it, we do have exit polls from Virginia and New Jersey, which tend to corroborate it…

    First, sinking white support for Obama, seen as ineffectual in ending the recession and stopping the loss of jobs.

    Second, a growing perception that Obama is biased…

    Then there was Obama’s appointment of Puerto Rican American Sonia Sotomayor to the Supreme Court.

    I don’t agree with sentiments in the least, but the analysis is spot on – one reason Sarah Palin can’t be dismissed as a political force since she is seen by many as representing White America.

    On the other hand, polling shows that despite enormous job and income losses in Black America, there is optimism there. See Unemployment rate for blacks projected to hit 25-year high – and Poll: Feeling of progress rises among African Americans –

    My view is this: Now that Obama has made crucial mistakes, race becomes a MUCH larger factor because that’s how it works in the United States. One must draw the conclusion that Blacks are prepared to give Obama more time, but Whites are not.

    Now that Obama is on “the right side” of this issue, will he be able to win Whites back? No. America is not a post-racial society; now that Obama has made mistakes, his blackness becomes a defining element of his political persona. On the whole, this is positive for Blacks , but it is negative for Whites – and the polling data demonstrate this.


    Supreme Court decision on political funding

    The decision to allow unions and corporations unlimited political donations marks yet another sea change in American life. The 5-4 split is testament to the importance of Supreme Court appointments.  The decision came down along the crucial divide between the liberal and conservative judges.

  • 5 > 4, but 59
  • Michael Waldman – Campaign finance ruling reflects Supreme Court’s growing audacity –
  • Court Rolls Back Campaign Spending Limits –
  • – US Supreme Court lifts campaign finance limits 

    Other links

    1. Matt Stiles says

      The very fact that there still exists a racial divide on political lines in America is, quite frankly, appalling. I never had much hope for Obama to engender any meaningful change on major issues, but I had at least held out hope that his presidency would result in SOME form of racial reconciliation. It sounds like it has actually been made worse. This is something that really needs to be dealt with if America intends to remain a world leader with credibility. The rest of the world really looks down upon the US for this lingering and archaic stereotyping.

      EDIT: I should also mention that in order to believe in any divide between “White America” and “Black America,” one requires racial polylogism to justify it. Thoroughly debunked by Mises in Human Action.

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