In an interview with Bloomberg/BusinessWeek, President Obama toned down the anti-Wall Street rhetoric and called the heads of JPMorgan Chase and Goldman Sachs "very savvy businessmen." Naturally, everybody is furious now, because indirectly complimenting bankers for being clever is a monstrous act of treasonous barbarism, or something.
Let's see what Obama really said. The Bloomberg begins like this:
President Barack Obama said he doesn't "begrudge" the $17 million bonus awarded to JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon or the $9 million issued to Goldman Sachs Group Inc. CEO Lloyd Blankfein, noting that some athletes take home more pay.
The president, speaking in an interview, said in response to a question that while $17 million is "an extraordinary amount of money" for Main Street, "there are some baseball players who are making more than that and don't get to the World Series either, so I'm shocked by that as well."
"I know both those guys; they are very savvy businessmen," Obama said in the interview yesterday in the Oval Office with Bloomberg BusinessWeek, which will appear on newsstands Friday. "I, like most of the American people, don't begrudge people success or wealth. That is part of the free- market system."
This makes it sound like Obama is specifically defending the $17 million and $9 million bonuses. He wasn't, really, defending any kind of bonus. If anything, he was softly criticizing Wall Street's bonus culture. The actual exchange went like this:
QUESTION: Let's talk bonuses for a minute: Lloyd Blankfein, $9 million; Jamie Dimon, $17 million. Now, granted, those were in stock and less than what some had expected. But are those numbers okay?
THE PRESIDENT: Well, look, first of all, I know both those guys. They're very savvy businessmen. And I, like most of the American people, don't begrudge people success or wealth. That's part of the free market system. I do think that the compensation packages that we've seen over the last decade at least have not matched up always to performance. I think that shareholders oftentimes have not had any significant say in the pay structures for CEOs.
What sentence here is supposed to get my blood boiling, exactly? These are obviously savvy, politically aware businessmen. When Blankfein announced that he would be taking a $9 million all-stock bonus after some of Goldman's most profitable quarters ever (he took a record $67.9 million bonus in 2007), plenty of news organizations called the move savvy. For Obama to state the same isn't a capitulation to Wall St., it's an acknowledgment of fact. Moreover, Obama is absolutely right that Americans don't normally begrudge success or wealth. That's one reason I've been told that middle Americans usually don't want to jack up the top marginal tax rate -- "It could be me one day," and so forth. Obama's also right that the kind of success and wealth achieved on Wall Street hasn't match up with performance in the last few years. Some tweaks to bonus pay protocol would be nice to see.
Liberal blogs are suffering conniption fits over the idea that Obama didn't spend the whole interview sweating in an apoplectic rage about bonus figures. I can't muster their indignation. Responding to a question about Goldman's bonuses just days after its CEO converted his pay to stock and slashed it by 80 percent, Obama spoke calmly about how Wall Street's bonus culture has misaligned incentives. Good for him. And bad on Bloomberg News for splicing his quotes suggestively.