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Did Brown’s win spark Obama’s war on Wall Street?

That’s the gist of yesterday’s post by James Pethoukoukis.  The column says:

A historic victory, really. It is hard to overstate just how “blue” a state Massachusetts is. Obama won it by 26 percentage points in 2008. Until now the state’s 10 U.S House members, two U.S. senators and all statewide officers were Democrats. The state hasn’t had a Republican U.S. senator since 1979. And, of course, the seat Brown captured had been held by the late Edward Kennedy since 1962…

Financial reform legislation was already likely to get milder rather than stronger. But not so the rhetoric. Unable to trumpet the economy, hitting Wall Street is one of the few political bullets Democrats have left.

So expect the Obama administration to go all out for the bank tax with increasingly harsh words for big financial institutions. Democrats may also be more willing to consider controversial proposals banks hate, like letting judges rework mortgages.

And this seems to be exactly what is occurring. I see this latest salvo as confirmation that my “incomplete” grade on Obama’s economic policy is the right one. Is Obama all hat and no cattle and doing this just because of voter anger as Marshall Auerback recently said? Or are the Volcker-backed reforms going to be real ones which for which Obama also pushes 100% win, lose or draw?

I’m now running a poll embedded in this post on Obama’s ‘War on Wall Street’  to see what you think.

Please feel free to comment on why you responded as you did.

You can read the rest of Jimmy P’s post at the link below.

Source

Brown win could spark Obama war on Wall Street – James Pethoukoukis, Reuters

About 

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College. Edward also writes a premium financial newsletter. Sign up here for a free trial.

7 Comments

  1. Abe, NYC says:

    I think it’s “only a start”, but only because Obama has seen that the Geithner/Summers strategy is failing him. Wherever his heart or mind is, his baddest need is to win elections, with a disaster looming for November.

    I don’t believe that the defeat in Massachusetts triggered the proposal, since all of this would be impossible to arrange in a day, very difficult even with a few days’ warning. Then, Volcker sounded rather confidently in his December interview when he said “In the end, I will probably win.” One may read it as a sign that by then the political winds had already change direction.

  2. Abe, NYC says:

    I think it’s “only a start”, but only because Obama has seen that the Geithner/Summers strategy is failing him. Wherever his heart or mind is, his baddest need is to win elections, with a disaster looming for November.

    I don’t believe that the defeat in Massachusetts triggered the proposal, since all of this would be impossible to arrange in a day, very difficult even with a few days’ warning. Then, Volcker sounded rather confident in his December interview when he said “In the end, I will probably win.” One may read it as a sign that by then the political winds had already change direction.

  3. Dave says:

    Ed…if you don’t mind me going off topic. This is a critical moment in time for those of us who have suffered at the hands of Ben Bernanke. I think you should encourage all of your readers to contact their Senators and express their opinion about this man’s performance or lack thereof and thwart his chances of further eroding the earning ability of everyday savers, investors and retirees. Confirmation hearings are Jan 31 I believe.

  4. John says:

    I don’t think Browns victory was really because of his ideas and policies. I believe he won because we felt like he was more of a regular person than Coakley. Coakley was a politician and Brown was a regular truck driving guy. We could connect with him and that is why we voted for him. I also don’t think his victory is that big of a deal or that big of a blow to the democrats/Obama. During Clinton’s presidency Republicans took control of Congress as well. Yet Clinton was still widely popular and his policies were well established. I do think it is about time Obama starts listening to Volcker and hopefully he keeps it up. This is certainly not a political move on Obama’s part although it certainly provides political bonus points.

  5. Dave says:

    Abe…I hope you are right but….even with this sudden change in direction I’m uncertain just how much long lasting clout Volcker really has. But there is little doubt that Obama has been slow to dispose of the trash leftover from the Bush Administration, whether it’s the Federal Reserve, Dept. of Justice, Sept of Interior etc.