Two views on President Obama’s relationship with Wall Street seem to alternate in the media. One view, increasingly prevalent of late, is that he’s hostile to Wall Street, perhaps even on vendetta against it starting with the Dodd-Frank reforms. The other view suggests he coddles the big Wall Street banks. Is Obama for or against Wall Street?
I think the answer is both. The Obama administration clearly is comfortable with the biggest banks (Citigroup, JPMorgan Chase) dominating American finance, and the new financial reforms won’t change this. So in this sense the administration is Wall Street’s best friend—at least one part of Wall Street. But the administration’s willingness to interfere with one industry after another has seriously complicated business. Everyone now has to spend as much time predicting political risk as economic risk. The increased uncertainty is bad news for Wall Street more generally, and for everyone else.