Psychoanalyzing one of America’s most dysfunctional relationships.
Thirty-eight hours after Scott Brown’s smack-upside-the-head victory in the race for Ted Kennedy’s former Senate seat, Barack Obama took the podium in the Diplomatic Reception Room at the White House. Hovering behind him was Paul Volcker, the former Fed chair and (for months, largely ignored) Obama economic adviser; far off to the side stood Treasury Secretary Tim Geithner. In the wake of Brown’s win, the prospect of passing health-care reform--and the rest of Obama’s first-term agenda--suddenly seemed dim. So the president had decided to pursue the obvious, logical course: He had decided to change the subject.
The topic to which Obama now shifted was financial reform, in particular to the matter of speculative, big-casino activity by the nation’s banks. ''I’m proposing a simple and common-sense reform, which we’re calling the Volcker Rule,after this tall guy behind me,'' Obama declared. ''Banks will no longer be allowed to own, invest, or sponsor hedge funds, private-equity funds, or proprietary trading operations for their own profit, unrelated to serving their customers. If financial firms want to trade for profit, that’s something they’re free to do. Indeed, doing so--responsibly--is a good thing for the markets and the economy. But these firms should not be allowed to run these hedge funds and private-equities funds while running a bank backed by the American people.''
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