As Regulations Weighed, Few On Wall Street's Side
SCOTT SIMON, host:
Just how far Congress will go as it considers tougher regulations for the finance sector remains to be seen. But if the reaction of the SEC's action against Goldman Sachs is any indication, few members of Congress will be willing to take the side of Wall Street.
Our friend, NPR News analyst Juan Williams, joins us. Morning, Juan.
JUAN WILLIAMS: Good morning, Scott.
SIMON: Wall Street would seem to be just about as popular as the IRS, according to popularity - according to opinion polls at the moment. Does the street feel like it's under siege?
WILLIAMS: It is under siege. In terms of politics right now, they are radioactive. If you think about what we just heard from Wendy Kaufman, the Securities and Exchange Commission filing charges against them on Friday; the House has passed a very strong bill to try to improve regulation; and now, of course, the Senate Banking Committee is seeking to tighten regulation of Wall Street as well. And it doesnt help that JPMorgan, for example, just reported that it's made more than $3 billion in the first quarter. Those kinds of earnings are alienating, antagonizing what is already a sour public opinion about what goes on on Wall Street.
SIMON: The historic as opposed to traditional sometimes Republican response has always been you dont want so many regulations, particularly in a time of economic crisis that you discourage enterprise, because enterprise is what creates innovation and creates jobs.
Now, on Friday, Republicans came out against the proposed Senate bill. They say it'll give the government unlimited regulatory powers. Is that - does the American public want unlimited regulatory power? I mean is that a particularly popular argument?
WILLIAMS: No. I think the best of the Republican argument is that it would facilitate more bailouts, and bailouts of Wall Street are very unpopular. And secondly, the notion of anything that would nationalize banks is unpopular. So that's the kind of direction, political direction, Republicans want to take with this in order to gain support.
But from the Democrats' point of view - you just look at the polls, Scott; the polls are overwhelming. Eighty-two percent favor tougher regulatory reform. In a Harris poll, Wall Street right now in terms of the crisis of leadership that most Americans feel across the board government, private sector - Wall Street's at the very bottom in terms of public confidence at this moment of all American institutions. So 65 percent of Americans, a negative view of Wall Street; 80 percent now want reform now, some kind of reform, and they dont care about the details. They just want some kind of reform right now.
SIMON: Mm-hmm. President Obama is in a position to take advantage of this as he presses his case then.
WILLIAMS: Oh, no question about it. He is playing on the animosity very strongly. And he's trying to make the case that consumers are the ones who have been violated and that he's looking out for the consumers and he's trying to limit banks and financial institutions from taking huge risks that then threaten the entire economy.
Here he is speaking on his Saturday radio address.
(Soundbite of radio address)
President BARACK OBAMA: Lo and behold, when he returned to Washington, the Senate Republican Leader came out against common sense reforms that we've proposed. In doing so, he made the cynical and deceptive assertion that reform would somehow enable future ba6ilouts, when he knows that it would do exactly the opposite.
WILLIAMS: So what we see here is that the president now is positioning himself with sort of populist rage against, you know, the barons of Wall Street and saying that Republicans, who have been meeting with Wall Street types, are the ones who want to defend the status quo. So that's the political dynamic at play here with the Republicans saying, oh no, this is just going to increase the chance of further bailouts and its going to put the government in position of, you know, what some of the critics might call socialistic instinct, which is to take over major financial institutions.
SIMON: Do the Republicans perhaps have a more appealing argument against the value added tax...
SIMON: ...which they charge to be regressive?
WILLIAMS: Right. Now, the White House says they're not considering a value added tax, but Paul Volcker and others, advisers to the president, have said it's got to be on the table because if you look at the size of the deficit in the country, it is just astronomical, and the American people do want the government to do something about the deficit. So the question is, will there be a VAT tax or not? And the Republicans say yes, it's coming. And the White House says no, we haven't reached that point yet.
SIMON: Time will tell.
NPR News analyst Juan Williams, thanks so much.
WILLIAMS: Youre welcome, Scott.