By Sally Greenberg, NCL Executive Director
New York, NY – There was an air of excitement at historic Federal Hall yesterday – a historic setting for President Obama’s “tough love” speech delivered on Wall Street at the place where George Washington took the oath of office. Yes, despite reports in the major newspapers of a grim-faced audience hearing the President’s words, I was there for the speech with NCL Board member Sam Simon, and we both thought there was an air of hopefulness among the Wall Street audience. There was a sense that we’ve turned a corner and that there are better economic times ahead. The president received sustained applause as he walked in and stood at the podium: as if the audience was saying – “we know you are under attack by the right – and maybe you’re disrespected in other parts of the country – not here in New York City – here we support you!”
The audience included the President’s economic team – Treasury Secretary Tim Geitner, Christina Romer, Paul Volcker and a host of New York officials – Assembly Speaker Sheldon Silvers and Mayor Michael Bloomberg, among them, and Chairman of the House Financial Services Committee Barney Frank (D-MA).
This was the one-year anniversary of the Lehman Brothers’ collapse. After chronicling the crisis of a year ago, Obama noted, “We helped to restore capital and confidence… We’re putting people to work, repairing roads and bridges and hospitals. Eight months later this effort continues. We can be confident that the storms of the last few years are beginning to break.” He noted that consumer advocates had played an important role in working for legislative reforms.
But the president also admonished Wall Street not to return to some of their worst practices. “Normalcy cannot lead to complacency. Some are misreading this moment. They are choosing to ignore those lessons at our nation’s peril. I want everyone to hear my words. We won’t go back. . . too many were motivated by an appetite for quick kills. And expect taxpayers to break their fall.”
Ultimately the President wants to create a Consumer Financial Protection Agency, and consumer groups strongly support such an entity – whose primary function will be to protect consumers against intentionally complex agreements with “gotcha” clauses that bury information about fees while creating uniform regulations so banks and financial firms can’t shop around for the most hands-off regulatiors, as they do today, exploiting loopholes in the system.
The President closed with this message to Wall Street: You don’t have to wait for government to force you to act responsibly, do it on your own! For example, he told them “put your 2009 bonuses up for shareholder vote.”
We thought the President hit all the right points, cajoling Wall Street, while affirming the good things about our economic system when it is working effectively: stimulating competition and spurring innovation. It was important to mark the one-year anniversary of a darker time, and highlight government’s role in protecting companies and consumers from what might have been a more prolonged and far harsher economic toll.