The growing (and well-deserved) backlash against the banking industry and Wall Street could hinder progress on other issue fronts — that’s a concern of Team Obama according to Adam Nagourney at the NY Times. AIG’s bonuses sure don’t help:
The Obama administration is increasingly concerned about a populist backlash against banks and Wall Street, worried that anger at financial institutions could also end up being directed at Congress and the White House and could complicate President Obama’s agenda.
The administration’s sharp rebuke of the American International Group on Sunday for handing out $165 million in executive bonuses — Lawrence H. Summers, director of the president’s National Economic Council, described it as “outrageous” on “This Week” on ABC — marks the latest effort by the White House to distance itself from abuses that could feed potentially disruptive public anger.
“We’ve got enormous problems that need to be addressed,” David Axelrod, Mr. Obama’s senior adviser, said in an interview. “And it’s hard to address because there’s a lot of anger about the irresponsibility that led us to this point.”
“This has been welling up for a long time,” he said.
Mr. Obama’s aides said any surge of such a sentiment could complicate efforts to win Congressional approval for the additional bailout packages that Mr. Obama has signaled will be necessary to stabilize the banking system.
It’s like an evil plot cooked up by the mad policy-makers in the Bush White House: Let’s destroy the economy and ruin the banking system. We’ll start to “fix” it in a way that won’t work. Then, Obama will inherit the mess and when he tries to solve it, there will be a populist backlash and he’ll never pass his agenda. The scariest thing is that it could work.