Feeding the Fat Cats

Excessive risk taking, exorbitant bonuses, reluctance to finance the economy … At the heart of the financial crisis, the large American banks that were saved from ruin by the massive injection of public funds brought down the wrath of President Obama. Guilty bankers were harshly criticized as having thrown the United States to the edge of despair through their blind thirst for profits. One expression comes to mind: “fat cats.” Picture lavishly well fed cats sitting on their pile of money and clawing at anyone who dares to come a little too close.

The American president chose his side: Main Street at the expense of Wall Street. The latter was not amused. And, the grudge holder put its millions of dollars towards funding the Republican candidates during the midterm elections of November 2010. An appetite for revenge with a touch of pragmatism. By supporting the Republicans, American finance was making sure to be on the winning side and also hoping to tone down that damned financial regulation reform even more.

A few months later, suddenly Obama is flirting with bankers and investors. The blatant goal: to raise the most money possible less than a year and a half away from the next presidential election. Because the approaching campaign looks like it will be the most expensive in history. Officially a candidate, the former Illinois senator hopes to collect no less than $1 billion to ensure his reelection to the White House. To succeed in doing so, he needs to win back the support of Wall Street. He’s still got a long way to go. Last week, Jamie Dimon, the CEO of JP Morgan Chase, publicly criticized the excessive regulations imposed on the banks. Dimon, a prospective candidate to replace Timothy Geithner as treasury secretary, is a staunch Democrat (he has put over a half million dollars towards the Democrats over the past twenty years). However, he has kept his distance over the past few months. Another reason for Obama to worry is that the frontrunner for the Republican nomination, Mitt Romney, is a business veteran. As co-founder of the investment firm Bain Capital, he knows how to talk to Wall Street.

Nonetheless, the president’s supporters in the financial world remain confident. Early in the week The New York Times wrote: “The president’s top financial industry supporters say they are confident that the support Mr. Obama needs will ultimately be there, despite the financial industry’s unhappiness over his efforts to tighten regulation of their businesses.”

The article continued: “But it is clear that those supporters will have to work much harder to win over the financial services industry than they did in 2008, before Wall Street’s bust, the subsequent clashes over policy and the sometimes bitter personal differences that lingered afterward.”

Obama spares no effort himself. After several visits to New York over the past few weeks, he will invite some of the important Wall Street stakeholders to dine at Daniel, a chic French restaurant — 3 Michelin stars — on the Upper East Side. Because, nowadays, feeding the “fat cats” is one of his priorities.