Pre-emptive fact check on Obama’s Wall Street talk 

Today at Cooper Union, President Obama will say this about the House and Senate bills to regulate Wall Street:

Both bills represent significant improvement on the flawed rules we have in place today, despite the furious efforts of industry lobbyists to shape them to their special interests. I am sure that many of those lobbyists work for some of you. But I am here today because I want to urge you to join us, instead of fighting us in this effort.

This is vintage Obama, combining his “scourge-of-the-special-interests” rhetoric with his “can’t-we-all-get-along” talk. First let me point out a couple of problems with the Reformers-vs-Lobbyists frame.

Goldman is on Obama’s side

Not on the SEC-civil-suit issue, but on the issue of regulation. Obama today will lay out five principles that need to be in the bill for him to sign it: (1) “transparency” on derivatives, (2) the “Volcker rule,” (3) “consumer financial protection,” (4) pay reforms, and (5) some mechanism to prevent future bailouts.

Goldman endorsed (1), calling in its annual report for federally requiring derivate clearinghouses. Goldman signaled confidence it could handle (2) the Volcker Rule, because basically all of its trading could be classified as being related to client service. Politico has reported that the big banks are not longer fighting (3) a Consumer Financial Protection Agency, because “Big banks that have been vocal opponents of the agency have decided they have the legal resources to deal with a consumer agency.” Goldman CEO Lloyd Blankfein has been calling for (4) pay restrictions since last summer. And number (5), ending too-big-to-fail is a pretty loaded topic, but remember what Paul Volcker said last year: simply labeling certain banks as Tier 1 sends a signal to the market that they are too big to fail

Who are those dread Wall Street lobbyists?

Many of them are Obama’s friends, donors, and former employees. As I wrote in February:

The American Bankers Association retains the Democrat-heavy firm Glover Park Group, which just hired Grant Leslie away from Obama’s Agriculture Department.

At Goldman Sachs, the nation’s largest investment bank, four of the five in-house lobbyists were Democratic Capitol Hill staffers — the remaining one gave $1,000 to Hillary Clinton last election. One new addition to this shop last year was Michael Paese, recently the top staffer for Rep. Barney Frank’s Financial Services Committee. Paese gave Obama $500 in 2008….

Bank of America’s K Street platoon includes the Podesta Group, whose co-founder John Podesta was director of Obama’s transition team. Podesta Group lobbyists for Bank of America include Tony Podesta (who visited the White House six times in Obama’s first eight months) and Oscar Ramirez, an alumnus of the Obama administration.

Goldman Sachs retains plenty of Obama allies, including: former House Minority Leader Dick Gephardt; Harold Ford Sr. (father of the former representative and Obama supporter); and super-lobbyist Steve Elmendorf, Gephardt’s former chief of staff, who visited the White House at least six times last year.

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Timothy P. Carney

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