Will Wall Street and President Obama bridge their divide?
With the elections behind us and with the President having won a clear victory, the divisive language is behind us and there will be a close working relationship going forward. The demonisation of Wall Street has been hard to take. The financial industry is proud of its contribution; it’s an industry that has really powered America’s success as leader of the global economy. But the contributions of the industry have been forgotten during this period. They obviously made some mistakes but they feel they’re taking outsized responsibility for problems that should be more broadly shared. I think the rhetoric and demonisation have been a very sore point. Hopefully, we’re going to get beyond that.
Here, in New York, we just went through a bad storm Sandy with a lot of people killed, and a lot of destruction. Hopefully we recognise the need to build an infrastructure that deals with climate change that heals some of the wounds that were created by the politics around the financial crisis. [New York City] Mayor Mike Bloomberg took the opportunity to endorse President Obama for re-election in the context of his feeling that the President was going to lead us to some solutions for the climate change problem.
Experiences like the storm and like the fiscal crisis will have us focus more on what unites us than what divides us. The leaders of Wall Street have made it clear to the President that they will support revenue increases, including a sunset on Bush tax cuts on high earners, as part of an overall package to reduce the country’s debt by $4 trillion. They are simply asking that we solve our long-term problems by cutting spending and by reform of Medicare, and not simply keep raising taxes because we can’t raise enough taxes to fix our debt problem.
Wall Street firms are going to do everything it takes to be perceived as part of the solution. They have increased their small business lending, they are working with homeowners to avoid foreclosure, and they’re standing ready to invest in upgrading our infrastructure. So I anticipate and have seen Wall Street be extremely aggressive in trying to help America solve the problems before us and not be cast as a villain. I think the President is likely to welcome that and I think he can take some credit for it.
(As told to Sujata Srinivasan)
Kathryn S Wylde is president and CEO of the Partnership for New York City, a nonprofit organisation established by David Rockefeller to advance the businesses of New York City in the global economy. Members include Citigroup, JPMorgan Chase, Goldman Sachs, Bank of America, Deutsche Bank Americas and BlackRock.