Money

Obama Has Always Been Cool with Taking Wall Street Cash

But accepting $400,000 for a speech right after leaving office, when his own refusal to take on Wall Street probably helped elect Trump, is still a uniquely bad look.

by David Dayen
Apr 28 2017, 10:27am

Image by Lia Kantrowitz

This week, we got a sense of just how many Americans are concerned about the financial prospects of a family that recently won a rumoured $60 million book deal. Social media erupted at the news that Barack Obama will accept a $400,000 speaking fee for a healthcare conference run by financial services firm Cantor Fitzgerald. Some on the left denounced the buckraking; plenty of others expressed righteous indignation over anyone telling the former president what to do.

And almost no one was honest with themselves.

Talk of optics and norms and appearances of impropriety and who is allowed to take money from whom represents a grand exercise in denial. The truth is that Obama is perfectly comfortable with raking in Wall Street cash. After all, it aligns well with someone who spent massive political capital to shield financial executives from their self-inflicted wounds. Taking this money won't undermine what Obama believes in; it is what he believes in.

I know this because Obama spokesman Eric Schultz said so in a statement on his boss's behalf. "Regardless of venue or sponsor, President Obama will be true to his values, his vision, and his record," Schultz wrote. "With regard to this or any other speech involving Wall Street sponsors, I'd just point out that in 2008, Barack Obama raised more money from Wall Street than any candidate in history—and still went on to successfully pass and implement the toughest reforms on Wall Street since FDR." (He could have also said "the only reforms on Wall Street since FDR.")

Contrary to the complaint that liberals unnecessarily hold Obama to a higher standard, it's the president himself who is boasting that he can take their money, drink their booze, and vote against Wall Street, to paraphrase the legendary California lawmaker Jesse Unruh. But while he did many positive things, when it comes to Wall Street, Obama is either oblivious to his own legacy, or trying to fool you about it. On that front, it's precisely his values, vision, and record I call into question.

Obama inherited a bailout he whipped Democrats to support while he was still a candidate. In office, he failed to overhaul or shrink a financial system that represents everything wrong with the modern economy. He didn't even stop the bonuses flowing at AIG.

During his transition, Obama promised up to $100 billion in bailout funds to prevent foreclosure; eight years later, only about $24 billion has been spent, most of it too late to stop the over 9.3 million American families who lost homes in the worst foreclosure crisis in 80 years. The government program Obama's Treasury Department built to mitigate foreclosures, without congressional interference, became a foreclosure-creation machine instead.

No banker with any real agency in the crisis ever saw the inside of a jail cell in the most punitive nation on earth. Even when mortgage companies got caught falsifying mortgage documents in courts nationwide, and stealing homes with false evidence, Obama's Justice Department made no effort to hold individuals responsible, instead stonewalling promising investigations and stringing along a disappointing series of no-fault settlements barely worth the paper they were printed on. For those who say a president is not a prosecutor, I'd submit that then-HUD Secretary Shaun Donovan spending two hours on the phone with me in 2012, defending the 49-state foreclosure fraud settlement that let bankers off the hook the day before its announcement, suggests that maybe the White House had something to do with it.

Obama's legacy isn't on the line because of a few speaking fees. It's not even about the money. He made his choice while in office to align with financial power, with the people who write the checks. And this damaged both America's economy and its sense of fairness, rupturing the nation's social fabric. It set the stage for the worst leader in modern times to tweet his way into office on a wave of indignation.

I've made these points over and over, so let me just illustrate with a story: Robynne Fauley of Sandy, Oregon, is a cancer patient undergoing chemotherapy who is probably going to be kicked out of her home on Monday. The case is an absolute mess, replete with a chain of internal emails going back nine years, showing bank employees plotting to fabricate documents so they can evict this woman once and for all. In the absence of accountability, this is what our system has devolved into: three line workers on an email chain figuring out how to squeeze foreclosures past a judge. When nobody pays a price for fraud, fraud proliferates.

Obama's defenders call this irrelevant when lives are on the line with President Trump. But there will be another president someday (let's hope), and if Democrats ever want that kind of power, they'll have to stop pretending about their past, about where they stand while incomes stratify and power concentrates.

In the meantime, as long as everyone's telling a complete stranger what to do with $400,000, I'd say: give it to Robynne Fauley. She could use it.

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