South By North Strategies, Ltd.

A long cover story in the current issue of New York offers armchair psychoanalysis of “one of Americans most dysfunctional relationships,” meaning the one between the Obama administration and Wall Street.

Speaking of Wall Street …

Today, it’s hard to find anyone on Wall Street who doesn’t speak of Obama as if he were an unholy hybrid of Bernie Sanders and Eldridge Cleaver. One night not long ago, over dinner with ten executives in the finance industry, I heard the president described as “hostile to business,” “anti-wealth,” and “anti-capitalism”; as a “redistributionist,” a “vilifier,” and a “thug.” A few days later, I recounted this experience to the same Wall Street CEO who’d called the Volcker Rule a testicular blow, and mentioned I’d been told that one of the most prominent megabank chiefs, who once boasted to friends of voting for Obama, now refers to him privately as a “Chicago mob guy.” Do all your brethren feel this way? I asked. “Oh, not everybody—just most of them,” he replied. “Jamie [Dimon]? Lloyd [Blankfein]? They might not say Obama’s a socialist, but they come pretty close.”

Meanwhile, the President has his own point of view …

For Obama, Wall Street’s cluelessness is a source of intense frustration—“He’s like, ‘What the f[—], you guys?’ ” says a White House official—and its ire toward him one of the cruelest paradoxes of his presidency. Rather than bowing to bailout rage or indulging the yearning for what Geithner calls “Old Testament justice,” Obama believes, justifiably, that he has taken a moderate approach to dealing with the financial system. On arriving in office, he chose to shore up the banks, not nationalize them. The regulations he has advocated aren’t punitive or radical. Despite the occasional burst of opprobrium, his stance has been one he summed up pithily at a meeting with the heads of the largest banks: “My administration is the only thing between you and the pitchforks.”
…
Yet now Obama stands accused by Wall Street of leading the pitchfork brigade, even as the soldiers in that battalion assail him for being in Wall Street’s pocket. Having labored to strike a delicate balance, he has managed to incur the wrath of both hoi polloi and the lords of finance. The political perils of this dynamic are obvious enough. And though the passage of regulatory reform may help assuage the anger of the masses, his relationship with Wall Street will be harder to mend—if mendable it proves to be.

And in an ironic conclusion …

Whatever the effects of the [financial reform] bill, among them will be neither an end to the too-big-too-fail doctrine nor any curb on what the sharpest Wall Streeters see as the central threat to the system’s stability: excessive financial leverage. Geithner, Summers, and Obama had little interest in tackling those matters, not because they are indentured servants to Wall Street but because at heart they are all technocrats who believe the system doesn’t need to be rebooted or downsized, merely better supervised.