The discussion moved swiftly across topics, such as the general soundness of the overall system and how to jump-start lending, before it came around to what was on everyone's mind: compensation.No wonder that, after quoting Time magazine the following December--The CEOs went into their traditional stance: "It's almost impossible to set caps; it's never worked, and you lose your best people," said one. "We're competing for talent on an international market," said another. Obama cut them off.
"Be careful how you make those statements, gentlemen. The public isn't buying that," he said. "My administration is the only thing between you and the pitchforks."
It was an attention grabber, no doubt, especially that carefully chosen last word.
But then Obama's flat tone turned to one of support, even sympathy. "You guys have an acute public relations problem that's turning into a political problem," he said. "And I want to help. But you need to show that you get that this is a crisis and that everyone has to make some sacrifices."
According to one of the participants, he then said, "I'm not out there to go after you. I'm protecting you. But if I'm going to shield you from public and congressional anger, you have to give me something to work with on these issues of compensation."
No suggestions were forthcoming from the bankers on what they might offer, and the president didn't seem to be championing any specific proposals. He had none; neither Geithner nor Summers believed compensation controls had any merit.
After a moment, the tension in the room seemed to lift: the bankers realized he was talking about voluntary limits on compensation until the storm of public anger passed. It would be for show.
"It's a p.r. stunt," says an executive at one of the banks that will be getting a dressing-down at the White House meeting. Executives from Goldman Sachs, JPMorgan Chase, Bank of America and Wells Fargo are expected to be among those in attendance.-- Glenn Greenwald wrote about another such meeting:
I wonder if they served beer. Obama loves to sit down with people and have a beer, to show that he's just folks, talking over our nation's problems with other folks. And it always works.One of the most revealing aspects of the bailout was that it was justified by the increased lending it would enable, yet contained no requirement that the funds be used for that. And, of course, they weren't.
One can say many things about these bankers, but they're typically quite perceptive about matters of self-interest. They don't exactly seem frightened -- or even remotely concerned -- by the presidential "dressing down" they're about to receive. In fact, they seem to think it's all a sham for public consumption. I wonder why they think that.
It's nice to get these after-the-fact reports of what went on behind closed doors, but as I. F. Stone showed fifty years ago and more, it's not absolutely necessary. Time isn't the most doggedly adversary of news sources, but even they reported at the time that the bankers involved saw these sessions as a public relations ploy. Still, thanks to Jon for spreading this around.