Matt Taibbi: Obama's Wall Street Reforms Likely To Be Lame Again In Second Term

Nov 08, 2012

The Obama administration in its first four years didn't take a hard line on Wall Street reform, and that probably won't change, according to Rolling Stone writer and infamous Wall Street hater Matt Taibbi.

The administration might "keep sitting on their ass," Taibbi told The Huffington Post in a phone interview late Wednesday. Taibbi said he believes that the president could have won in a landslide if only he'd called the financial industry to account for the mistakes that brought on the mortgage meltdown, financial crisis and recession.

"They kept the status quo," Taibbi said. "The bailouts and policies were totally continuous with Bush's."

Those affected by the foreclosure crisis, which many blame on Wall Street, would have been more likely to vote for a president who went straight for the institutions that threw the housing market and economy into a tailspin, Taibbi said.

"They could have said, 'Look, this segment of society really abandoned all of America economically, and we're going to take your side, and we're going to clean this up, and we're going to make this better,'" Taibbi said. "They didn't do that."

Obama signed the Dodd-Frank financial reform bill into law in 2010, after leaving it mostly to Congress to hash out the details. Dodd-Frank includes many regulations that bother Wall Street -- such as requiring big banks to carry more capital and (mostly) banning proprietary trading. But critics say the 848-page law is full of potential loopholes and does not address the true causes of the financial crisis.

The Obama administration has not criminally prosecuted any Wall Street executives for contributing to the financial crisis. The administration also decided not to break up big banks. Fannie Mae and Freddie Mac still are under government control; they have cost taxpayers $150 billion as of May 2012. Wall Street donated heavily to Mitt Romney and lost.

But Obama's team shouldn't feel complacent, Taibbi said, since Romney was not a strong candidate anyway.

"Here's a guy who's the face of Wall Street. He's running for president four years after Wall Street blew up the universe," Taibbi said. "That's a pretty big monkey to have on your back."

Taibbi said that the Obama administration needs to stop worrying that it might appear anti-business if it cracks down on Wall Street.

"If they had made that argument clearly -- that we have to clean up Wall Street, we have to do the right thing -- then people would have gotten it, and he would have gotten more support than he got last night," Taibbi said.

The White House did not respond to a request to comment on Taibbi's statements.

Earlier on HuffPost:

Jamie Dimon Hates On Regulation: A History