Obama and the Banks

Barack Obama inherited a bloody mess when he took the oath of office a year ago. Many of us believed that Mr. Obama’s historic presidency would bring new ideas and fresh energy to a tired, intellectually bankrupt capital.

But, one year after that historic day in Washington, we’re beginning to wonder if Mr. Obama has what it takes to make things right for all Americans. And we’re beginning to wonder if we made a mistake when we endorsed him during the early stages of the 2008 presidential primaries, at a time when most New York newspapers were endorsing our hometown senator, Hillary Clinton.

We supported Mr. Obama because we thought he had the energy and intellect to get past old ways of thinking. He was, we said, an advocate for a new kind of cooperative politics, for a political discussion that moved beyond class-war rhetoric and band-aid approaches to long-term problems.

Perhaps Mr. Obama still can live up to that promise. Thus far, however, he has shown a disheartening tendency to play the role of demagogue when it comes to the nation’s banking industry. He demonized bankers in several speeches last year, and now has proposed a new, $9 billion-a-year tax on banks with more than $50 billion in assets.

The tax is bad enough. The bitter rhetoric that accompanies it makes the president’s proposal even more difficult to understand. He has said that the banks created the economic crisis (will they get the credit for the recovery?) and has all but suggested that those in the financial industry who receive bonuses are little more than greedy thieves.

The financial industry, of course, is the economic engine of the New York metropolitan economy. It simply doesn’t deserve the abuse, the regulation and the taxes heaped upon it by the Obama White House. Yes, many large banks took government money to cover catastrophic losses, but much of the bailout money has been returned to taxpayers. Mr. Obama ought to be praising the industry for getting back on its feet so quickly. Instead, he said the payback isn’t good enough. He wants to punish the industry, calculating, no doubt, that an angry public will support him.

The president should be leading, not following, public opinion. The politics of envy can be poisonous and destructive, and deserves a place in history’s dustbin. If Mr. Obama is the man we thought he was, he’ll rethink his rhetoric and proposals as the nation’s economy improves—thanks, in no small way, to the banking industry’s creativity and, yes, hard work.