Obama's Wall Street Speech

On the whole, having read the entire speech, I'm largely unimpressed.

The President barely describes what the reforms will actually consist of...and there's a healthy dose of class warfare populism, along with all sorts of inconsistencies (in part because there's also a healthy dose of corporatism).  There's a lot of narrative, and very few specifics.  While it's a complex topic that might be difficult to present in a speech, I think Obama oversimplifies and ends up vilifying as he does so.

Looking at the matter from 30,000 feet, my main problem with the Obama view on the financial crisis and state involvement in the markets is the irony that his attempts to push the state into the mix to buffer consumers, investors, and financial institutions detaches them even further from risk that, history tells us, cannot be eliminated entirely.  That impacts decision-making for those participants.  And I think that's the type of moral hazard that ultimately results in bailouts. 

While I need to dig into the financial reform bill's text to see whether Republican claims about institutionalizing bailouts are fully accurate, the fact that institutions know that regardless of who's in office, there's a very high likelihood of bailout leaves me concerned.  And it leads to this twisted Obama approach, for example:

Now, Americans don't begrudge anybody for success when that success is earned. But when we read in the past about enormous executive bonuses at firms even as they were relying on assistance from taxpayers, it offended our fundamental values.

Well, Mr. President, the one aspect of that scenario the government should control is whether or not a bailout is given.  Instead of drawing a line in the sand on bailouts, which would at least force firms toward addressing fundamental flaws in their approaches, you attack executive pay (which is, admittedly, the easier route to take).

The speech was a fine example, even with its caveats, of what has very aptly been called Obama's rhetorical tendency "to vilify his opponents in personal terms and assail their arguments as dishonest, illegitimate or motivated by bad faith."