Former President Barack Obama, who derided Wall Street executives as “fat cats” during his tenure, now commands a hefty speaking fee from prominent Wall Street financial institutions, collecting a six figure sum last week from the Carlyle Group LP, one of the world’s largest private equity groups.
“Since leaving office, Obama has made as much as $400,000 per appearance on what could easily be called the Crooked Hillary Circuit” wrote Jack Holmes for Esquire Magazine. “By the end of September, Obama will have spoken to Northern Trust Corp., Carlyle Group, and Cantor Fitzgerald (or their clients).”
Chances are the topics are much different than those he discussed when he was president.
“Addressing leaders of New York’s financial giants,” reported The New York Times in 2010, “Mr. Obama described himself as a champion of change battling ‘battalions of financial industry lobbyists’ and the ‘withering forces’ of the economic elite.” The Times described the purpose of the speech was to “chide” Wall Street bankers for their “reckless practices.”
His speech was touted as an effort to tap into the “antiestablishment mood,” of the time, very similar to the antiestablishment mood that swept President Donald Trump into office in 2016. What’s different now? True, Obama is no longer president and will most likely not seek office again. But as Esquire and the Los Angeles Times point out, he is still the “de facto” leader of his party, most recently wielding his influence to help get Tom Perez elected DNC chair. Moreover, he hasn’t exactly refrained from criticizing his successor on everything from DACA to the Paris climate agreement.
“He’s continuing to exercise the authority,” said Jeff Hauser, head of the revolving door project that studies political corruption, according to Bloomberg. If Obama wants to stay on the political scene, “he ought to forgo a few hundred thousand here and maybe a half-million there.”
“I do think at a certain point you’ve made enough money” Obama said in April 2010, referring to Wall Street bankers. He did make an awkward attempt to qualify the statement, separating Wall Street from Main Street by following up with unless “you’re providing a good product or you’re providing a good service.”
The financial regulation Obama fought for and signed into law in 2010, known as Dodd-Frank, was described by Obama as discouraging “a casino-style mentality on Wall Street.” That may be true, but the bill also had some unintended consequences. Regulatory barriers to entry erected by the law protect the fortunes of the largest “fat cats” on Wall Street by insulating them from competitive forces.
“Dodd-Frank has created a protected class of financial firms with assets above $50 billion, as smaller firms now have a reason not to reach that size” concluded a Manhattan Institute study. “Dodd-Frank did nothing to break up America’s largest banks, but it also discourages new competition for the mega-banks that existed before Dodd-Frank”
Sure, there is nothing wrong Obama accepting exorbitant fees to speak at financial institutions. If they are willing to pay him, he would be foolish not to accept. It is a familiar path traveled by former presidents and politicos. But his position, record, and past statements raise questions about the willingness of some in the Democratic Party to cozy up to Wall Street.
“Obama has picked private equity, hedge fund, venture capital and banking veterans to oversee his foundation, and an alumnus of Goldman Sachs Group Inc. to advise him on investments” reported Bloomberg on Monday.
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