[Swiftwater Gazette] Burned by Obama

[Brad Haslett]

For a refresher on Jarett, go here -

http://tinyurl.com/4own9w

Brad

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Burned by Obama

By CHARLES GASPARINO

Last Updated: 3:10 AM, September 29, 2009

Posted: 1:13 AM, September 29, 2009

In the depths of the financial crisis last year, people like Morgan
Stanley's John Mack, BlackRock's Larry Fink, Greg Fleming (then of
Merrill Lynch), JP Morgan's Jamie Dimon and Goldman Sachs' Lloyd
Blankfein were telling everyone that candidate Barack Obama was a
"moderate," and moderation was what this country needed.

What a difference a year makes. They won't admit it in public -- but
in private conversations, the top guys on Wall Street are feeling
burned.

The guy who seemed like such a steady voice -- vowing to curb runaway
spending and restoring order to the banking system and the economy as
a whole -- is instead so driven to achieve his big-government policy
goals that he and his policy people are ignoring their own economic
advisers on the severe economic costs that his agenda will cause.

I'm told that Treasury Secretary Tim Geithner and chief economic
adviser Lawrence Summers have both complained to senior Wall Street
execs that they have almost no say in major policy decisions. Obama
economic counselor Paul Volcker, the former Fed chairman, is barely
consulted at all on just about anything -- not even issues involving
the banking system, of which he is among the world's leading
authorities.

At most, the economic people and their staffs get asked to do cost
analyses of Obama's initiatives for the White House political people
-- who then ignore their advice.

It's almost the opposite approach, the Wall Street crowd complains,
from the last Democratic president, Bill Clinton, whose main
first-term achieve- ment -- deficit reduction -- was crafted by his
chief economic adviser, Robert Rubin.

Like Obama, Clinton and Rubin promised to raise taxes on the "rich,"
and they did. But Clinton didn't raise taxes to embark on a wild-eyed
redistribution of wealth and massive programs. In the early Clinton
years, Rubin convinced the president that he needed to avoid the grim
consequences of runaway spending -- and after the Republicans took
Congress in '94, it was no longer an option.

Of course, the Clinton tax hikes came at a cost -- before the tech
boom ignited the economy in 1995, growth was mediocre at best. But
government spending remained under control, and lower interest rates
followed, as did an economic recovery.

Obama, according to Wall Street people who regularly deal with his
economic and budget officials, is acting as if he has a blank check to
do what he wants, while ignoring the longterm costs of his policies.

As one CEO of a major financial firm told me: "The economic guys say
that when they explain the costs of programs, the policy guys simply
thank them for their time and then ignore what they say."

In other words, the economic people feel that they have almost no say
in this administration's policy decisions.

Wall Street should have seen it coming. Obama was among the most
liberal politicians in the country, despite his campaign rhetoric --
and his record in Illinois and the Senate showed it. He has spoken
glowingly over the years of the need to redistribute wealth, a measure
that always leads to taxes on small businesses, the economy's main
economic engine.

The execs who had such hopes for the president are now wondering
fearfully just how radical he really is.

It's almost comical watching the Street's top players squirm when they
hear "class warfare" rhetoric coming from the White House, and it
forces them to act in ways they'd never imagined. In addition to
recently giving phony speeches about the sins of large compensation
packages that they had no problem taking just a few years ago, many
Wall Street CEOs are so terrified of being outed as greedy capitalists
that they no longer use the corporate credit cards to charge business
lunches at their favorite New York restaurants.

The funniest story I've heard lately came from a former Wall Street
executive and longtime Democrat who anxiously recounted a recent
conversation with Obama.

The executive said he told the president that he's at a disadvantage
because he's relatively inexperienced in economic matters during a
time of economic crisis. "That's why I have Valerie," came Obama's
reply.

"Valerie" is senior adviser Valerie Jarrett -- a Chicago real-estate
attorney and one of Obama's closest friends, who has deep ties to the
Windy City's Democratic political machine.

Now you know why Wall Street is so nervous.

CNBC on-air editor Charles Gasparino's new book about the Wall Street
meltdown, "The Sell out," is due out Nov. 3.