What Wall Street Wants, Wall Street Gets

Expanding on what I was talking about yesterday,

Wall Street knows the government needs them to cover this bailout.

...we have today's front pager in the WSJ, where reporter Monica Langley tosses the Obama administration a couple of Scooby Snacks for being so helpful to the people actually in charge of the country.

The Obama administration, after months of criticizing Wall Street, has been scrambling to woo top bankers and financiers to back its latest bailout plan.

In recent days, in spite of public furor over huge bonuses paid at American International Group Inc., the administration has concluded that it needs the private sector to play a central role in fixing the economy. So over the weekend, the White House worked to tone down its Wall Street bashing and to win support from top bankers for the bailout plan announced Monday, which will rely on public-private investments to soak up toxic assets.

But weeks of searing criticism by politicians and the public had left bankers leery of working with the government. After brainstorming about what to do about that problem, the White House resolved to try to take control of the debate, according to several administration officials. In weekend television appearances, President Barack Obama and other administration officials tempered their criticisms of the financial sector.

Meanwhile, Treasury Secretary Timothy Geithner and his colleagues worked the phones to try to line up support on Wall Street for the plan announced Monday. They told executives they don't favor using the tax code to retroactively penalize specific individuals who had received bonuses, according to people familiar with the calls. They asked officials to sign on "in pencil, not ink," and to "validate" or "express support" for the plan, these people say.

You can practically slip and fall due to the puddle of condescension on the floor. "How reassuring that this Obama fellow and his man Geithner have finally seen the light. We expected this all along, of course. He has no choice. Wall Street runs America and always will. Presidents come and go." The article ends with this warning:

Bankers were shell-shocked, especially when Congress moved to heavily tax bonuses. When administration officials began calling them to talk about the next phase of the bailout, the bankers turned the tables. They used the calls to lobby against the antibonus legislation, Wall Street executives say. Several big firms called Treasury and White House officials to urge a more reasonable approach, both sides say. The banks' message: If you want our help to get credit flowing again to consumers and businesses, stop the rush to penalize our bonuses.

And so, the President and the Senate are quietly sitting on the AIG bonus tax bill with no real intention of making it law. The banksters know they're still holding all the cards: if they don't want to lend, the economy crumbles.

Obama has been shown the error of his ways. The fat cats on Wall Street are back in charge, the stock market has rallied 22% off its lows, mortgage lenders are cashing in on the new refi boom that Helicopter Ben Bernanke has created and the banksters have a shiny new plan to make billions off of taxpayer dollars while the banks get free money as a result. Those who fail to heed the mistakes of history are doomed to repeat them, only making them much, much larger.

Obama's decided to save the economy, alright. Just not the one you and I inhabit.

Change we can believe in. It's time to stop picking on Timmy.

It's time to start holding Timmy's boss accountable.