In an interview with Bloomberg/BusinessWeek, President Obama toned down the anti-Wall Street rhetoric and called the heads of JPMorgan Chase and Goldman Sachs “very savvy businessmen.” Naturally, everybody is furious now, because indirectly complimenting bankers for being clever is a monstrous act of treasonous barbarism, or something.
Let’s see what Obama really said. The Bloomberg begins like this:
President Barack Obama said he
doesn’t “begrudge” the $17 million bonus awarded to JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon or the $9
million issued to Goldman Sachs Group Inc. CEO Lloyd Blankfein,
noting that some athletes take home more pay.The president, speaking in an interview, said in response
to a question that while $17 million is “an extraordinary
amount of money” for Main Street, “there are some baseball
players who are making more than that and don’t get to the World
Series either, so I’m shocked by that as well.”“I know both those guys; they are very savvy
businessmen,” Obama said in the interview yesterday in the Oval
Office with Bloomberg BusinessWeek, which will appear on
newsstands Friday. “I, like most of the American people, don’t
begrudge people success or wealth. That is part of the free-
market system.”
This makes it sound like Obama is specifically
defending the $17 million and $9 million bonuses. He wasn’t, really, defending any kind of bonus. If anything, he was softly criticizing Wall Street’s bonus culture. The
actual exchange went like this:
QUESTION: Let’s talk bonuses for a minute: Lloyd
Blankfein, $9 million; Jamie Dimon, $17 million. Now, granted, those
were in stock and less than what some had expected. But are those
numbers okay?THE PRESIDENT: Well, look, first of all, I know
both those guys. They’re very savvy businessmen. And I, like most of
the American people, don’t begrudge people success or wealth. That’s
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. I think that shareholders oftentimes have not
had any significant say in the pay structures for CEOs.
What sentence here is supposed to get my blood boiling, exactly? These are
obviously savvy, politically aware businessmen. When Blankfein
announced that he would be taking a $9 million all-stock
bonus after some of Goldman’s most profitable quarters ever (he took a
record $67.9 million bonus in 2007), plenty of news
organizations called
the move savvy. For Obama to state the same isn’t a capitulation to
Wall St., it’s an acknowledgment of fact. Moreover, Obama is absolutely right
that Americans don’t normally begrudge success or wealth. That’s one reason I’ve been told that middle Americans usually don’t want to jack up the top marginal tax rate — “It could be me one day,” and so forth. Obama’s also
right that the kind of success and wealth achieved on Wall Street
hasn’t match up with performance in the last few years. Some tweaks to bonus pay protocol would be nice to see.
Liberal
blogs are suffering conniption fits over the idea that Obama didn’t
spend the whole interview sweating in an apoplectic rage about bonus
figures. I can’t muster their indignation. Responding to a question about Goldman’s bonuses just days after its CEO converted his pay to stock and slashed it by 80 percent, Obama spoke calmly about how Wall Street’s bonus culture has misaligned incentives. Good for him. And bad on Bloomberg News for splicing his quotes suggestively.
