NEW YORK -- The crowd that assembled on Wall Street's Federal Hall for a speech by President Obama Monday was not the kind of enthusiastic audience to which he has become accustomed. The gathered luminaries sat, for the most part, stone-faced and silent. A few took notes and -- because it's the digital age -- a couple pulled out small cameras in order to document the moment. But the president was applauded just once during his speech (as well as before and after it, of course), and even that felt un-enthusiastic, as if everyone was clapping because it was expected, not because they were moved to.
Still, when you consider both the theme of the speech and the people there to hear it, the reception Obama received isn't all that surprising. Executives from places like Bank of America, Goldman Sachs, Deutsche Bank Americas, American Express, Credit Suisse and Morgan Stanley can't exactly be expected to do the wave when the president says "there are some in the financial industry" who are ignoring "the lessons of ... the crisis from which we're still recovering" and says he's proposing "the most ambitious overhaul of the financial regulatory system since the Great Depression."
The reason for this lecture was the one-year anniversary of the collapse of the financial firm Lehman Brothers; the event has served as a marker for the beginning of the worst part of the economic crisis. The location of the president's speech, too, was important -- beyond the original Federal Hall's being the site of President Washington's inauguration and the first capitol of the U.S., the current building once served as a Treasury building, and is just steps away from the New York Stock Exchange. Even as he criticized Wall Street, Obama was paying it homage just by traveling there and speaking to the people he did.
And Obama took pains not to come off as anti-capitalist, or even just as someone who plans to ride roughshod over free enterprise.
"I have always been a strong believer in the power of the free market. I believe that jobs are best created not by government, but by businesses and entrepreneurs willing to take a risk on a good idea," the president said. "I believe that the role of the government is not to disparage wealth, but to expand its reach; not to stifle markets, but to provide the ground rules and level playing field that helps to make those markets more vibrant."
He did use that argument, though, as a jumping-off point to argue for regulatory reform, saying such changes would actually protect American capitalism.
"I promise you, I did not run for President to bail out banks or intervene in capital markets. But it is important to note that the very absence of common-sense regulations able to keep up with a fast-paced financial sector is what created the need for that extraordinary intervention ... The lack of sensible rules of the road, so often opposed by those who claim to speak for the free market, ironically led to a rescue far more intrusive than anything any of us -- Democratic or Republican, progressive or conservative -- would have ever proposed or predicted," Obama said.
The question now is whether whatever reforms are instituted will live up to the goals Obama set for them, and the tough talk he's given about them and the American financial system generally. Our own Andrew Leonard is skeptical, and he's not the only one. But the speech itself did seem to indicate that the administration really may be ready to pull out the proverbial stick here. If it's not, we'll all be left wondering why the White House would expose itself by having the president talk about "the most ambitious overhaul of the financial regulatory system since the Great Depression" without delivering on it.