Obama Capitulation Complete: GE CEO Replaces Volcker

Last Updated Jan 22, 2011 7:47 AM EST

Remember way back in December of 2009, when President Obama waged war with the business community? That was when he coined the term "Fat Cat Bankers" on 60 Minutes. The appearance was followed by lots of articles detailing the break up of the Obama-Wall Street love-fest.


I never bought the President's anti-business schtick. I mean you don't exactly mistrust corporate America when you count Larry Summers and Tim Geithner as your top financial gurus. These guys have been always been friends of industry and more specifically, Wall Street's lap dogs, but I digress.

Let's count the ways that Obama has actually snuggled up to those Fat Cats he so detested just over a year ago:
  1. TARP: Although I still believe that TARP was necessary, the idea that the money flowed with very few strings attached was appalling.
  2. Regulatory Reform: We got lots of stuff we didn't need and not enough of what could have transformed the financial services sector, like a way to address the size and interconnectedness of our financial institutions. Oh, and still no word from the SEC about the F-Word (aka the fiduciary standard).
  3. Fannie, Freddie and AIG: Not really sure how much money we have sunk into this trio of toxic entities? Don't worry--the government is happy to keep it that way by obfuscating at every possible turn.
  4. Mortgage Modification: HAMP has been a bureaucratic embarrassment that the Obama Administration has simply ignored. Suspicious types (who, moi?) might think it has something to do with the fact that the nation's largest financial institutions would have to eat some serious losses if a useful and productive modification plan were in place.
  5. Foreclosuregate: One of the most egregious displays of the Obama administration's cuddling up to industry can be seen in the foreclosure fiasco that erupted last fall. The White House has punted on foreclosures, causing needless suffering to homeowners and prolonging the housing recession.
And for the sixth example that President Obama has in his heart of hearts embraced the business community, we have the news of the day: Obama tapped GE CEO Jeffrey Immelt to lead his newly renamed President's Council on Jobs and Competitiveness (aka the former President's Economic Recovery Advisory Board ). Immelt replaces former Fed Chairman and reform-minded Paul Volcker.

Remember that GE accessed billions from the government during the financial crisis. Then last summer, Immelt complained about President Obama. Talk about ungrateful!

Obama might have patched up some quarrels with the business community, but his choice of Immelt does little to advance the needs of Main Street. Beefing up exports for companies like GE is not likely to lead to broad-based job creation in the US, nor will it address the housing fiasco. With Immelt's ascent into the Obama inner circle, the capitulation is complete.

Image by Flickr User eschipul, CC 2.0
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    Jill Schlesinger, CFP®, is the Editor-at-Large for CBS MoneyWatch. She covers the economy, markets, investing or anything else with a dollar sign. Prior to the launch of MoneyWatch in 2009, Jill was the chief investment officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.

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