As I continue to watch Money, Power and Wall Street I was eager
to see what happened in episode three. Episode three focused on the time from
when President Obama was taking office. When President Obama took office the
stock market was down six thousand points and unemployment rates were up to
seven percent. Henry Paulson used $125 billion dollars to bail out banks and
during the transition between presidents he gave another twenty billion dollars
to Citi group.
President
Obama pushed for Wall Street to change its ways; he wanted “pure” business. He
gave a speech at Cooper Union in front of many of the power brokers. He spoke
of regulation before the Wall Street workers even thought about it. When it
came time for Obama to choose his economic team, he wasn’t sure whether to go
in the direction of reform or rebuilding Wall Street. He chose Tim Geithner as
Secretary of Treasury. Tim Geithner was president of the New York Federal
Reserve and he also saw the economy as Wall Street did so he was able to
reflect that to the White House. Another person President Obama was Paul
Volcker to his economic board and Volcker was a reformer and tough on Wall
Street. On February 9th President Obama gave a speech that said that
the following day Geithner would give a speech about the economic plan.
President Obama’s speech had left the country with very high expectations. The
day of Tim Geithners speech, he was very inexperienced in front of TV and most
importantly his plan was not ready yet. The day that Geithner gave that speech
about stress tests the market dropped almost four hundred points. Following
that day, Obama was under major pressure to replace Tim Geithner however he
chose to stay with him.
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| President Obama with Tim Geithner |
On
March 15th President Obama called a meeting at the White House with
thirteen CEO’s of the major banks. The CEO’s were very nervous however at the
end it turned out that Obama should have made demands to the banks but he
didn’t. He also chose to stay with Geithner’s ideas of giving the banks stress
tests and went against Larry Summers who wanted aggressive reform. When the
results of the bank stress tests came back, nineteen of the largest banks were
considered “healthy.” On Sept 14th 2009 the president gave a speech
right near Wall Street. Many of the banks CEO’s did not show up. This was at a
time when things were stable so the banks became disengaged since they knew
they got off the hook easily. At this time the banks began to use some of the
money the government gave them to pay off government officials so that Congress
would lay off the pressures on Wall Street.
I
was surprised and glad to see that President Obama made the right decision to
keep Tim Geithner in office because I agree that at the time the economy and
banks were too fragile for aggressive reform. I was however very disappointed
with how President Obama handled the situation with the CEO’s of the banks.
They are very much at the root of this economy’s problem and they feel no
repercussions. I’m very interested to see how the last episode of Money, Power and Wall Street ends. On a
side note I found it to be very interesting and ironic that during the
documentary, every advertisement that came on was for Goldman Sachs.
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