October 18th, 2009
01:15 PM ET
10 years ago

Obama aides question Wall St. firms lobbying against reforms

White House Chief of Staff Rahm Emanuel spoke out Sunday against the efforts of some Wall Street firms to lobby against proposed new financial regulations.

White House Chief of Staff Rahm Emanuel spoke out Sunday against the efforts of some Wall Street firms to lobby against proposed new financial regulations.

WASHINGTON (CNN) - Wall Street needs to focus more on helping Main Street than self-enrichment, two of President Barack Obama's top advisers said Sunday.

Chief of Staff Rahm Emanuel and Senior Adviser David Axelrod said Wall Street institutions that received taxpayer-funded bailouts should stop fighting proposed new financial regulations intended to prevent another near economic meltdown.

They also said firms should re-think paying large new bonuses now that fortunes have recovered, and Axelrod called for banks that got government help to increase lending to support economic growth.

The comments came after JPMorgan Chase and Goldman Sachs last week reported strong earnings and likely lucrative bonus payments within a year of receiving government help. Both organizations have repaid the government and no longer are governed by regulations linked to the taxpayer money.

Emanuel and Axelrod, without naming names, criticized beneficiaries of government help for now opposing reforms that would prevent a recurrence of the problem.

"Not only do they come for a bailout, but in this short period of time where they have a level of normalcy because of what the government did to help them, they're now back trying to fight consumer offices and the type of protections that will prevent another type of situation where the economy is taken over the cliff by the actions taken on Wall Street and the financial market," Emanuel said on CNN's "State of the Union."

Americans are frustrated because they struggle to make ends meet amid high unemployment, rising health care costs and other challenges, yet "Wall Street is back doing what Wall Street did," Emanuel said.

"They have a responsibility to be part of the solution, not part of being the obstacle," he said.

Axelrod, on ABC's "This Week," called potential bonuses totaling billions of dollars "offensive." However, he noted that some companies paid bonuses in stock rather than cash to make their value dependent on company performance.

"The most offensive thing is, we haven't seen the kind of increase in lending that we should," Axelrod said in reference to tight credit for consumers and small businesses that need capital for growth.

At the same time, he said, banks are spending "tens of millions of dollars lobbying the Congress to try and stop financial regulatory reform, to stop the kind of reforms that we need to prevent the disaster we just saw and to protect consumers."

Conceding that little regulatory control exists to change behavior now, Axelrod called for Wall Street firms to fulfill their responsibilities to society.

"They ought to meet those responsibilities, and they ought to express them by increasing lending, which is what we need right now, and by standing down and allowing the kinds of reforms we need to protect consumers and protect the country from the sort of disaster we've seen," he said.

He also noted a report last week that showed U.S. wages at their lowest in almost two decades, saying Americans have limited tolerance for huge Wall Street bonuses at such a time.

The American people "don't begrudge success, and we ought not to be in the business of micro-managing how companies compensate their people," Axelrod said, but he called on Wall Street firms to "do the things that they should to help this country."

Filed under: David Axelrod • Rahm Emanuel • State of the Union • Wall Street
soundoff (9 Responses)
  1. Scott

    Wallstreet cares for only one thing and that is to enrich the ones that works there. They care nothing about main street or law. Good truthful governmental oversight is what is needed to keep Wallstreet in line. As long as Wallstreet can buy off certain people they will always get their way unless the majority sees what these people are doing. Look at what these speculators does to gas prices!! Here's a question to congress. Why don't you put a stop to it. You all are lawmakers aren't you!!!!!

    October 18, 2009 02:27 pm at 2:27 pm |
  2. mark

    first of all, access to loans is not a right, those that should not be borrowing do not deserve to have a loan period. second, our dear leader needs to keep his nose out of private enterprise, jpm and gs did not need a bailout and paid back the preferred stock with interest and took out their warrants at a premium for a ~20% return to taxpayers. please show me an investment that lucrative and in that short of a period. thirdly, rahmy was paid about ~20 million for work on wall street – so if he is now so against it and wanting them to share tehir wealth, why not "claw back" his compensation as they just did to ken lewis...

    October 18, 2009 02:28 pm at 2:28 pm |
  3. victim of republican greed

    Most people are not happy about the welfare payments provided to Wallstreet by American taxpayers.

    October 18, 2009 02:40 pm at 2:40 pm |
  4. JT the concerned College Freshman from MO

    “No drug, not even alcohol, causes the fundamental ills of society. If we're looking for the source of our troubles, we shouldn't test people for drugs, we should test them for stupidity, ignorance, greed and love of power.”
    P. J. O'Rourke quote

    I put this quote here for a reason, and that reason is for everyone to read what greed does to society as a whole. Normally, I do not take sides on issues since I am an Independent, but on the issue of health-care, I have to say that these insurance companies are shameless in their attempts to make a profit. I have seen plenty of people denied there healthcare or treatement because they were too "poor" or forgot to declare a case of "being too overweight". Since my mom is a nurse of 25 years, she has come home many times nearly crying because she could not give the treatement to a patient who seemed like a totally nice and caring person. This statement that I am about to say might seem a little extreme, but I feel like it is worth every second of my time saying this. Every person who values money profits more than a human life deserves to go to hell, and burn there for eternity. As a Christian, I personally believe that Jesus would go into there companies and turn over all of there tables and say, "This is supposed to be a house of healing, not a robbery of lives." CNN, you better post this! I am just expressing how I feel towards these people.

    October 18, 2009 02:46 pm at 2:46 pm |
  5. Dixon

    These people will receive the bonuses no matter what we do. They control the economy and will not allow to much money to "trickle down" to the common folk.

    October 18, 2009 03:00 pm at 3:00 pm |
  6. Four and The Door

    This story is better than any campaign ad the Republicans can buy in 2010 and 2012. This administration is out of their league playing games with private industry.

    Business is business. Government is government. It would be just as awkward if Goldman Sachs decided to run the State of New York. They would be no more effective than the Federal Government is at playing around on Wall Street or Detroit business.

    Lets just hope they stay out of the medical insurance industry. It will not work any better than what we see here.

    October 18, 2009 03:26 pm at 3:26 pm |
  7. S M R

    Lobbying and Special Interest Groups should be banned.

    October 18, 2009 03:30 pm at 3:30 pm |
  8. ThinkAgain

    You know what, the Democrats control a majority of the House and Senate. Just write and pass the laws re-regulating the financial industry.

    In particular, bring back the Glass-Steagall Act which does not allow investment firms access to savings institutions.

    If the financial industry doesn't like it, tough! I don't like the fact that they so irresponsibly gambled our money away, then came crying to the federal government for a bailout and then had the gall to hand out bonuses to the very people who contributed to the global financial crisis.

    They deserve something much more severe than re-regulation for the crimes they have committed ....

    October 18, 2009 03:50 pm at 3:50 pm |
  9. Rhonda Willis

    President Barack Obama should hold companies responisible if they are using taxpayers money for bonuses when the economy is effected by a takeover. Thank you President Obama for recovering taxpayers dollars to be use in other area that are effected by this recession. American Banks have a responibility to operate in a matter that is good for our nation not for their own personal gain. Banks have a moral responisbility to work with government to restore balance to compete with other countries. United States of America is the one country who goals is strive for excellence!

    October 18, 2009 03:51 pm at 3:51 pm |