WASHINGTON — President Obama summoned the nation’s top financial executives to the White House Monday for a little jaw-boning on how they can help rebuild the economy.
The day before, in an interview on “60 Minutes,” Mr. Obama called them “fat-cat bankers.” On Monday, they were at 1600 Pennsylvania Avenue – or most of the 12 were, as three were fogged in in New York and had to participate via conference call.
Obama’s point: We bailed you out, now you do your job. Specifically, he wants these financial institutions to boost lending to small businesses, a key engine of economic recovery.
Obama put it this way after the session: “My main message in today’s meeting was very simple: that America’s banks received extraordinary assistance from American taxpayers to rebuild their industry – and now that they’re back on their feet, we expect an extraordinary commitment from them to help rebuild our economy.”
Earlier in the day, Citigroup announced that it would repay $20 billion in aid and leave the government’s financial protection program.
Obama says he called on the bankers to find “ways to help creditworthy small and medium-size businesses get the loans that they need to open their doors, grow their operations, and create new jobs.”
But bankers, according to Obama, say they “face a shortage of creditworthy individuals and businesses.”
So did the meeting advance the ball at all on the nation’s credit issues? Obama called it a “candid and productive meeting,” but he did not come forth with any concrete deliverables. There were hints that the assembled men were telling the president what he wanted to hear – such as when they said they supported financial regulatory reform.
But, as Obama went on to note, “there’s a gap between “what I’m hearing here in the White House and the activities of lobbyists on behalf of these institutions or associations of which they’re a member up on Capitol Hill.”
Obama added that he “urged them to close that gap, and they assured me that they would make every effort to do so.”
Ultimately, the session may have been in a vein similar to the jobs summit held at the White House Dec. 3, a high-profile effort to show the public the administration is doing something about high unemployment and the challenges homeowners face in refinancing their homes.
Peter Morici, a business professor at the University of Maryland, College Park, argues that the banks – actually, the regional banks, which sell their loans to the big banks – will start lending again anyway, and the situation will sort itself out.
“They’re going to return to lending anyway, and the president is going to declare victory,” says Mr. Morici. “Today was a show.”
At least the bankers traveled (or tried to travel) on commercial airlines, not private jets, the New York Daily News pointed out.
Last year, the CEOs of the big three US automakers flew to Washington in private jets to ask for taxpayer money. That didn’t play well with Congress or the public.