In 2008, Obama managed to win over both the financial sector and the progressive wing of the Democratic Party. Now he seems to have pissed off both ends of that coalition.
Hart: There’s a fascinating point from the exit polls that supports part of what Matt is saying. When you ask voters who is most to blame for the current economic crisis, 35 percent say it’s Wall Street bankers, 29 percent say it’s George W. Bush and 23 percent say it’s Barack Obama. However, among those who say it’s Wall Street bankers, 56 percent voted for the Republicans in this election. So go figure.
That said, I worry that if the president and the Democrats were to follow Matt’s advice, they would be appealing to the smallest segment of the electorate. Right now Obama has the support of 85 percent of Democrats. If you want to get America back to work, you don’t want to put the people who have the ability to invest on the other side of their fence.
Taibbi: So if we put people in jail for committing fraud during the mortgage bubble, we’re endangering our ability to win over the CEOs? Obama should have made sure that there are consequences for people who committed crimes. Instead, he pursued a policy of nonaction, and that left him vulnerable with ordinary people who wanted an explanation for why the economy went off the cliff.
Gergen: I don’t think his problem is he hasn’t put enough people in jail. I agree that when people commit fraud, they ought to spend some time in the slammer. But there’s a tendency in today’s Democratic Party to turn away from someone like Bob Rubin because of his time at Citigroup. I served with him during the Clinton administration, when the country added 22 million new jobs, and Bob Rubin was right at the center of that. He was an invaluable adviser to the president, and he is now arguing that one of the reasons this economy is not coming back is that the business community is sitting on money because of the hostility they feel coming from Washington.
Taibbi: I’m sorry, but Bob Rubin is exactly what I’m talking about. Under Clinton, he pushed this enormous remaking of the rules for Wall Street specifically so the Citigroup merger could go through, then he went to work for Citigroup and made $120 million over the next 10 years. He helped push through the Commodity Futures Modernization Act of 2000, which deregulated the derivatives market and created the mortgage bubble. Then Obama brings him back into the government during the transition and surrounds himself with people who are close to Bob Rubin. That’s exactly the wrong message to be sending to ordinary voters: that we’re bringing back this same crew of Wall Street-friendly guys who screwed up and got us in this mess in the first place.
Gergen: That sentiment is exactly what the business community objects to.
Taibbi: Fuck the business community!
Gergen: Fuck the business community? That’s what you said? That’s the very attitude the business community feels is coming from many Democrats in Washington, including some in the White House. There’s a good reason why they feel many Democrats are hostile — because they are.
Taibbi: It’s hard to see how this administration is hostile to business when the guy it turns to for economic advice is the same guy who pushed through a merger and then went right off and made $120 million from a decision that helped wreck the entire economy.