Obama on CEO bonuses: Wealth is good

Less than a month after calling bank executives’ pay “obscene,” President Barack Obama is declining to criticize bonuses received by two top Wall Street chief executives, saying he doesn’t “begrudge people success or wealth.”

In an interview with Bloomberg Business Week, the president compared Jamie Dimon, CEO of JPMorgan Chase & Co., and Lloyd Blankfein, CEO of Goldman Sachs Group Inc., with athletes who are paid even more.

“First of all, I know both those guys,” Obama said. “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.”

The full interview will not appear until Friday. But the White House, eager to defend the president’s remarks, issued a transcript Wednesday of the exchange over bank compensation to show that Obama was not expressing approval of the Blankfein and Dimon bonuses.

Dimon received a $17 million bonus and Blankfein received $9 million. The compensation was in the form of stock that can’t be redeemed immediately.

“Listen, $17 million is an extraordinary amount of money,” Obama said in the interview. “Of course, there are some baseball players who are making more than that who don’t get to the World Series either. So I’m shocked by that as well.”

Obama’s remarks display a much more temperate approach to bankers whom not long ago he derided as “fat cats” and whose bonuses he decried as “obscene.” They also illustrate the complicated relationship Obama has with Wall Street, a convenient populist target for the president but also an essential component of an economic recovery.

Dimon in particular has been courted by the president. A top Democratic donor, Dimon recently joined other executives for a private lunch with Obama and met privately with Treasury Secretary Timothy Geithner. But Dimon hasn’t ignored Republicans, meeting with House Republican Leader John Boehner at the Capitol Hill Club recently, just steps from House office buildings.

After giving equally to national Democratic and Republican party organizations going back at least to 2002, JPMorgan’s political action committee last year contributed only to GOP national organizations. It has divided its money among specific members of Congress more equally, however.

Dimon has privately voiced frustration with the past tone of Obama’s comments about bankers. Last month, he criticized a fee on large banks that Obama proposed to cover shortfalls in the government $700 billion bank rescue fund. “Using tax policy to punish people is a bad idea,” Dimon said at the time.

Obama has been especially critical of Wall Street banks and their lobbyists for their opposition to certain aspects of his proposed financial regulations, especially a new independent consumer financial protection agency.

Rep. Dennis Kucinich of Ohio, a liberal Democrat who has proposed a 75 percent tax on bank bonuses, said Obama was now trying to be conciliatory with an industry that should be reined in.

“It’s like we’re afraid of upsetting these people,” he said. “This condition where there is such a profound separation between the financial economy on Wall Street and the real economy on Main Street needs to be addressed.”

Obama’s reaction to Blankfein’s and Dimon’s bonuses also flies in the face of his administration’s stated desire to shrink banks that are considered too big to fail, said Simon Johnson, former chief economist with the International Monetary Fund and professor at the Massachusetts Institute of Technology’s Sloan School of Management.

“I don’t begrudge success and wealth, but I would like for it to be socially productive and socially constructive, not massively damaging,” he said.

The White House moved swiftly Wednesday to dampen any suggestion that Obama was taking a different tone with bankers. It provided reporters with copies of past remarks, dating back to the presidential campaign, where Obama has asserted that he did not “disparage” or “begrudge” wealth and success. By late afternoon, White House deputy communications director Jennifer Psaki posted a blog on the White House Web site “to clear up some confusion” about Obama’s stance on executive pay.

Psaki took issue with a headline about the Bloomberg interview that “made it sound like the President brushed off the impact of bonuses and applauded the role of bankers.”

“This naturally came as a surprise to the many people who share his outrage at the behavior that continues on Wall Street and is not an accurate portrayal of where the President stands or what he said during the interview,” Psaki wrote.

In the interview, Obama stressed that shareholders should be given a say, even if not binding, on the pay packages of executives. He also said bonuses received as stock that is held over time — such as those for Blankfein and Dimon — are preferable because they tie the compensation to long-term performance.

“I guess the main principle we want to promote is a simple principle of ‘say on pay,’ that shareholders have a chance to actually scrutinize what CEOs are getting paid,” Obama said. “And I think that serves as a restraint and helps align performance with pay.”


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  1. Nogood

    ” That’s part of the free market system.”

    Free market, my ass!!! There is no such thing.

    Mr. Obama, I am so sorry that I voted for you. Sarah Palin probably could be doing as good as you are. You have no back-bone!!!!!!!!!!

  2. almandine

    I think it has become exceedingly clear that one who could nationalize banks, insurance companies, car companies, et al, and then claim to be sanguine about mega-bonuses for the executives of the entities that were saved by govt largesse, is either a fool… or believes you’re one.

  3. Carl Nemo

    “That’s part of the free market system.”…extract from article

    The word “rigged” should be substituted for ‘free’…no?

    It’s politicians such as this president that convinces me that all offices should be no longer than two years. Four years or more of lying, shapeshifting pols has been the downfall of this nation. It’s too bad there’s no way to give this guy the boot asap. Three more years of his corporatist friendly b.s. and we’re going to be burnt toast.

    Carl Nemo **==

  4. jbaspen

    Carl – Sadly, (for the sake of the Entire Country)
    you are right yet again!

    To me, Obama showed his cards in the Birkenfeld/UBS case. While Swiss Banker Birkenfeld was anything but an angel; he DID provide the
    Obama/Holder Justice Dept. with the names of over
    4,400 big-time American Tax cheats/Secret Account
    Holders. Why these people were not prosecuted and
    ALL their $$$ forfieted is beyond my comprehension!
    Instead, the servile Obama Justice Department puts
    Birkenfeld behind bars for over 3 years, AND offers
    these scumbags AMNESTY! According to Birkenfeld’s
    defense counsel, these account holders/scammers included some of “the Richest Americans!

    Mind -blowing!! JB

  5. hologram5

    Talk about a wishy-washy sorry excuse for a POTUS. Keep your stories straight or as you corportists say, we the people will have a perform a hostile takeover.

  6. woody188

    Corporatism is how Mussolini described fascism, which is why I just call them what they are, fascists. Ruffles some feathers but if a duck is a duck…

  7. Carl Nemo

    Obama is “Gordon Gecko redux”; ie., a proponent for the concept that “greed is good”…no?!

    I hope the electorate doesn’t forget what a backstabbing sob this “change we can believe in” candidate has become when he starts his fancy lying doublespeak to get reelected in three years or even his jive turkey support for Dem candidates this November. His party needs to get the boot to the curb in 2010 with him and the rest of his foul baggage for party members the summary heave ho in 2012; ie., a “big flush” into the deep six.

    This is not an endorsement for Republicans either. I’ve been registered as an Independent since I could first vote almost 50 years ago. They have little to nothing to offer “We the People” either. I suggest folks check out “Campaign for Liberty”, “Green Party”, “Communist or Socialist Party” or any other option rather than accepting the status quo that it must be either a Democrat or a Republican. They’ve long since merged and are simply duopolists serving the same shadowy corporate masters. Any difference is simply a smoke and mirrors illusion. : |

    Carl Nemo **==

  8. Seaglass

    I agree Capt.Nemo! I suspect Obama doesn’t really even care whether his putative party loses the Congress in the fall. he’ll be just as happy with the Corporatist Goper party, then he can just blame them for not doing a fucking thing but continue business as usual. ( the robbing blind of the taxpayer)

  9. Carl Nemo

    Thanks jbaspen for the details concerning the final resolution of the Birken/UBS case. I had lost track of it and the final resolution must have been pushed to the back page so to speak. Phil Gramm who can be linked to much of our national financial travails also sat on the board of UBS and possibly still does.

    This Birken case pretty much gives us a preview of what “dear leader” is going to do for the next three years; ie., issue “get out of jail” cards to every sob and org that’s managed to rip off the citizenry for the past 10 years or so including our now rogue intel community.

    Candidate Obama was groomed to be simply a “silver-tongued judas goat” to lead us into nothing more than a holding presidency until the “flagship” party; ie, the Republicans can regain control in two to four years. Twenty of the past twenty nine years have been held by “rethug” presidents ever since the office was compromised by Mr. CIA, H.W. Bush as Reagan’s V.P. Bill Clinton, now Obama are nothing but holding presidents between republican regimes. Starting with Ronald Reagan/H.W. Bush to present this nation has been drawn into a deadly whirlpool that’s taking the USS America to the bottom with seemingly no rescue in sight.

    The more things change, the more they will remain the same if our citizens continue to choose either a Republican or Democrat for their representatives at all levels of government from local to the federal level. We’re dopes and with the help of the controlled MSM owned by the same shadowy corporatists they’ve evidently succeeded in roping us. : |

    Carl Nemo **==

  10. issodhos

    It is highly questionable that El Duce ever said that, but even so, it should be kept in mind that when he did speak of corporativism (corporatismo, I believe) it was not in reference to commercial entities per se. It was in reference to any group licensed by the state.

  11. Seaglass

    Exactly. The Republic is dead , America is now a wholly owned subsidiary of Big Biz Inc. Obama is just a two bit middle manager and his statements yesterday are just so much brown nosing on his part ( no pun intended.)

  12. jbaspen

    Carl, I don’t want to beat the issue of
    off-shoring/secret bank accounts to a pulp!
    But, please think AL CAPONE. The Goverment could never get the wily, charismatic, sociopathic
    Capone on mass murder, mayhem, smuggling or
    organized crime. But the Feds did manage to convict
    Capone on tax fraud & evasion. Ditto for Birkenfeld
    and his merry band of “some of the richest
    Americans”. The Obama Administration had a golden
    trump card here. Instead of trying to pursue
    difficult Enron-like Securities Fraud cases, they
    could have sacked our corrupt Ruling Class
    (I don’t doubt for a second that a slew of
    Investment Banker types have secret bank accounts)
    using the much easier Tax Fraud stautues. If you have a secret bank account and didn’t report its
    existence to IRS, GAME OVER! BUT, not only did
    Obama let the “4,400” “Walk”, he basically warned
    any future whistleblower that, you mess with my
    biggest Contribitutors, I’m gonna crush you like
    a bug! And, you are (again) right Carl, this whole
    story was deep-sixed by the lap-dog media, buried
    on the back pages of the New York Times. How much
    more corrupt can we get!

  13. hologram5

    And so I ask again, where is the rage? That’s our money going to these criminals. At the very least I ask, when are we performing the hostile takeove? Are we just too lazy/stupid as a nation to do anything? Are we too complacent? What is the deal here? Is someone just waiting for the shot heard ’round the world? What is it? I know that there are many people out there that feel the same way I do, where are they?

  14. griff

    We’re incapable of rage any more, but any one that does dare organize and protest are quickly co-opted and radicalized/demonized by the media.

    See: Tea Parties

  15. bryan mcclellan

    To the tune of Devil with a Blue dress,

    Weasel with a blue tie,
    blue tie,
    blue tie,
    Weasel with a Blue Tie On …OWW !

  16. bryan mcclellan

    Tough to see the direction today of these bad actors, no matter how well dressed.
    I’ll take a calloused hand to the soft shoe opera, to wit, if I have one left..Heck