Josh Marshall sums up why Goldman and Wall Street look at Obama and D.C. in general as mosquitos. It’s not about regulation or banking reform but the broader question of ‘who, whom.’ The City has always looked down on D.C. as uncouth, a rustic, non-cosmopolitan do-nothing. As Josh notes it’s about broader sociology; always has been. The latest round of Goldman bonuses just another signal for the hired help to remember who’s upstairs and who’s downstairs.
The City’s economy, however notional in the bubble years, is far more ‘tangible’ than the turgid federales and their politically hamstrung procedure. Sure, many on Wall Street may not understand their own ‘products’ (we loved hearing that for the first time when we were there years ago, along with the notion that mounds of documents were ‘technology’). But then *no one* in D.C. understands the federal economy, budget or even how to run a small business. The most famous and vociferous D.C. bloviators on cable re the ‘miracle’ of American enterprise wouldn’t know a revolving credit agreement from a post office mailbox lease. In the time it took Goldman to overinflate and then rape Greece Congress might have begun organizing a hearing on Athenian financial assistance.
Goldman and the rest intend to survive. Not only Obama but the eclipse of Wal-Mart America. Despite all the political posturing, Dodd’s feckless and weak ‘reform bill’ is almost entirely acceptable to the broader financial services industry. Dodd and Obama put the fear in no one — again, as Josh notes, recall when Goldman blew off meeting the president before. It’s one reason we tune out alot of the current posing on both sides. The congressional and Administration penny stock players in D.C. are like – to switch analogies – concierges who overstep their bounds and attempt familiarity while holding open the door.
D.C. long ago gained the reputation in the City as ‘rubes – we’ve established who you are, we are just haggling price’. So when the strumpets turned up with convenient cash in 2008 all well and good. A steady hand back from self-induced vertigo. Still hired help remains just that. Perhaps a little extra for them year-end for alacrity. In no way did a sociological paradigm change occur in the City, acknowledging D.C.’s primacy over the City’s cosmopolitan captains. AIG’s lock, stock and barrel ownership by the U.S. government really is a side issue – few on Wall Street ever understood AIG, find insurance dreadfully dull, and never liked AIG anyway. Greenberg’s legal travails elicit little sympathy at all.
Wall Street epitomizes the City’s condescension to the poorly paid government street walkers in D.C. But its soft presence permeates its arts, media, industry, cultural icons such as museums, etc. In a way, the U.S. Government may have been too successful in averting a major depression. Slightly humbled, barely chastened and unbowed, Wall Street (and the City) only flirted with real consequences (Lehman, Bear Stearns) of collapse unlike most of America. Isn’t the Dow back? This Goldman saga is a chapter in the ongoing tale of two cities. The book will not end with a character named Obama.