Wednesday, February 10, 2010

Obama sings a new tune on Wall Street bonuses

The left is getting upset (when aren’t they) with Obama over an upcoming Bloomberg interview where Obama says he does not “begrudge” certain Wall Street exec’s bonuses.

Asked about the $17 million bonus given to Jamie Dimon, the CEO of JPMorgan Chase & Co., and the $9 million bonuses going to Lloyd Blankfein, CEO of the Goldman Sachs Group Inc. CEO, the president said, “I know both those guys; they are very savvy businessmen. I, like most of the American people, don’t begrudge people success or wealth. That is part of the free-market system.”
"I do think that the compensation packages that we've seen over the last decade at least have not matched up always to performance," the president said -- a rather serene response relative to some of his previous language on the matter.
How come Populist Obama has changed his tune on bonuses for these two guys? Well, in the case of Goldman Sachs, we really need look no further than the number of Goldman cronies working in the administration.  In other words, no biting the hand that feeds you.

In the case of JP Morgan Chase, the answer is simple, Republicans! 
UPDATE: One other note that occurs to me, for some context: Dimon is a Democratic contributor whom, the Wall Street Journal reported last week, is being wooed by Republicans, who are questioning why Wall Street executives give money to Democrats rather than to the Republicans who are trying to block President Obama’s push to enact financial regulatory reforms.
House Minority Leader John Boehner told reporters last Thursday that he “did in fact have a conversation with Mr. Dimon to talk about some of the bizarre policies coming out of this administration. I also pressed them to help our team." 
This change of tone just highlights the reason why government should not be involved with the inner working s of big business. Politicians (president included) are slaves to cash and political plays.  The result is arbitrary rules that cause massive uncertainty for investors.

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