Barack Obama v Wall Street: The Art Of War
The art of war is of vital importance to the State - Sun Tzu, The Art Of War
The Commander stands for the virtues of wisdom, sincerely, benevolence, courage and strictness - Sun Tzu, The Art Of War
The general who thoroughly understands the advantages that accompany variation of tactics knows how to handle his troops - Sun Tzu, The Art Of War
Rouse him, and learn the principle of his activity or inactivity. Force him to reveal himself, so as to find out his vulnerable spots - Sun Tzu, The Art Of War
President Obama spoke to the group then threw the the conversation open to questions, "So, who'd like to talk?"
JPMorgan's CEO Jamie Dimon insisted to the the President that he'd like to give the government's TARP money back, (earlier he had offered offered Treasury Secretary Tim Geithner a fake check for $25 billion).
Thus the highest form of generalship is to balk the enemy's plans- Sun Tzu, The Art Of War
Several of the CEOs disagreed with the President, "returning TARP money was their patriotic duty," "the return would send a positive signal of confidence to the markets."
In war, then, let your great object be victory, not lengthy campaigns - Sun Tzu, The Art Of War
Unknown to the bank executives, at that time another meeting was taking place in Washington, General Motors CEO Rick Wagoner was meeting with Obama's senior adviser Steven Rattner where he demanded Wagoner's resignation.
Thus it may be known that the leader of armies is the arbiter of the people's fate, the man on whom it depends whether the nation shall be in peace or in peril - Sun Tzu, The Art Of War
Politico, Inside Obama's bank CEOs meeting
Arrayed around a long mahogany table in the White House state dining room last week, the CEOs of the most powerful financial institutions in the world offered several explanations for paying high salaries to their employees - and, by extension, to themselves.
The Commander stands for the virtues of wisdom, sincerely, benevolence, courage and strictness - Sun Tzu, The Art Of War
President Barack Obama wasn't in a mood to hear them out. He stopped the conversation, and offered a blunt reminder of the public's reaction to such explanations. "Be careful how you make those statements, gentlemen. The public isn't buying that."
"My administration," the president added, "is the only thing between you and the pitchforks."
The general who thoroughly understands the advantages that accompany variation of tactics knows how to handle his troops - Sun Tzu, The Art Of War
There were signs from the outset that this was a business event, not a social gathering. At each place around the table sat a single glass of water. No ice. For those who finished their glass, no refills were offered. There was no group photograph taken of the CEOs with the president, which typically happens at ceremonial White House gatherings, but not at serious strategy sessions.
"The only way they could have sent a more Spartan message is if they had served bread along with the water," says a person who attended the meeting. "The signal from Obama's body language and demeanor was, 'I'm the president, and you're not.'"
Rouse him, and learn the principle of his activity or inactivity. Force him to reveal himself, so as to find out his vulnerable spots - Sun Tzu, The Art Of War
President Obama spoke to the group then threw the the conversation open to questions, "So, who'd like to talk?"
JPMorgan's CEO Jamie Dimon insisted to the the President that he'd like to give the government's TARP money back, (earlier he had offered offered Treasury Secretary Tim Geithner a fake check for $25 billion).
Thus the highest form of generalship is to balk the enemy's plans- Sun Tzu, The Art Of War
The president offered an analogy: "this is like a patient who's on antibiotics," he said. "Maybe the patient starts feeling better after a couple of days, but you don't stop taking the medicine until you've finished the bottle." Returning the money too early, the president argued could send a bad signal.
Several of the CEOs disagreed with the President, "returning TARP money was their patriotic duty," "the return would send a positive signal of confidence to the markets."
In war, then, let your great object be victory, not lengthy campaigns - Sun Tzu, The Art Of War
Unknown to the bank executives, at that time another meeting was taking place in Washington, General Motors CEO Rick Wagoner was meeting with Obama's senior adviser Steven Rattner where he demanded Wagoner's resignation.
Thus it may be known that the leader of armies is the arbiter of the people's fate, the man on whom it depends whether the nation shall be in peace or in peril - Sun Tzu, The Art Of War
Politico, Inside Obama's bank CEOs meeting
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Seriously, no ice for their ice water? I'm pretty sure that's against the Geneva Conventions.
Good Lord.
April 3, 2009 3:03 PM | Reply | Permalink
I really appreciate the link to the Politico.com piece but I find it hard to recommend your post as I find it a highly inaccurate narrative. I don't believe there is much evidence at all that the president is "at war" with "Wall Street," quite the contrary, actually. He is only trying to make a government intervention in a crisis in the private banking system work, and then return it to private hands in good health as quickly as possible. Even he uses a doctor with antibiotics analogy rather than any warrior language.
April 3, 2009 3:14 PM | Reply | Permalink
It's not war, it's the art of war. Sun Tzu's writings have been used metaphorically, in sports, entertainment, and especially in business. (There isn't an agent in Hollywood who doesn't own a copy.)
It was the way the original article was written, and the President's quotes that put Sun Tzu in my mind.
I see these CEOs as all brass and no brains. And, they have no qualms taking on the President of the United States. They see him as a inconvenience on their way to their jets, yachts, and private islands.
There is one quote that sums up the President to me: The Commander stands for the virtues of wisdom, sincerely, benevolence, courage and strictness - Sun Tzu, The Art Of War
In basketball it is a war between the one with the ball and the defender. The bank CEO's just ran into the Presidential elbow. And, there is more where that came from.
April 3, 2009 3:40 PM | Reply | Permalink
We'll just have to agree to disagree. I don't think, for example, that someone in the corporate world who is trying to do something more positive than a hostile takeover goes all Sun Tzu. Life is not always a basketball game or a war, there are often more parties involved than simply two opponents and two sides. I much prefer a medical doctor to a warrior, and their work, too, is an "art." I really believe the situation is not at all as your title says, "Barack Obama v Wall Street," that's not what's going on. For example, he himself points out to them that he is between them and the pitchfork mobs.
April 3, 2009 4:04 PM | Reply | Permalink
The good thing is we are intellectually communicating.
What I believe the bankers are doing is engaging in what Murry (my dog) would call a pissing contest with the President of the United States.
These "guys" know only one game, "hardball." That's how they got to where they are, and it's how they stay there.
Do you really think they are a bunch of nice guys who accidentally brought the largest economy in the history of the world, to its knees while walking off with billions for them and their friends?
I grew up on the streets of Chicago and NY where if you gave guys like them an inch you were toast.
I see President Obama giving them his marker, drawing a line in the street. Cross if you dare.
He's doing it for you, for me, for US. It's about change. Changing the way things have been done.
Thanks for commenting. I appreciate your perspective.
April 3, 2009 5:24 PM | Reply | Permalink
I find your comments naive. These are guys who are smart enough to get multi-million dollar payouts while running the world economy into the ground. This application of Sun Tzu is not about war but about politics. You think these CEO's are use to working in an apolitical environment? On the contrary, it takes much political skill to convince people to pay you millions for a job poorly done.
These care more about there corporate cultures then they do about how they have ruined the world economy.
I don't know. This sounds like a warning or maybe even a threat to me.
April 3, 2009 10:35 PM | Reply | Permalink
It sounds like Obama is coaching them on their PR strategy to me - not saying he's going to turn them loose to the wolves. My motto is watch what they do, not what they say. And make no mistake, Geithner is still looking out for their best interests (not that of the taxpayers):
http://www.washingtonpost.com/wp-dyn/content/article/2009/04/03/AR2009040303910.html?hpid=topnews
April 4, 2009 1:00 AM | Reply | Permalink
Good find, dijamo. My reasoning is Obama can't put the screws too tight on the bankers (yet) because they are the "head water" of the economy, if they turn off the spigot there is no money to make or buy anything. If they opt out of the plan he has no control over them, at all.
I don't agree with, "Geithner is still looking out for their best interests (not that of the taxpayers)" The media and the right have made this a rally cry but I've never seen proof that he is "in bed" with the bankers him being a civil servant all his life. I once met the Godfather of a notorious NY crime family, (he complained to me that kids have no respect for law and order, seriously, it was 1970) does that make me a mafia capo?
April 4, 2009 12:00 PM | Reply | Permalink
The taxpayers are not Geithner's constituency, that's a framing error. The country at large is who he should be representing, "promote the general welfare" and so on.
Also keep in mind that the million or so wealthiest pay something like 50% of tax revenues recently.
My problem with G. is that he's not making a sound case for PPIP or other moves being necessary to promote the general welfare. Therefore I am allowed to consider him corrupt or incompetent until he demonstrates or argues effectively to the contrary. Government must prove the necessity of its actions, not the other way around (we should not have to prove said actions to be excessive - but some have outlined such proofs with no evident effect so far).
April 4, 2009 5:48 PM | Reply | Permalink
Life is not always a basketball game or a war, there are often more parties involved than simply two opponents and two sides. I much prefer a medical doctor to a warrior, and their work, too, is an "art." --
lol....so, bring on the leeches?
April 4, 2009 7:10 AM | Reply | Permalink
There is no doubt President Obama has studied the Art of War and utilizes the tactics often. I like that.
April 3, 2009 3:53 PM | Reply | Permalink
"Looki, even for an African-American"
Is overt racism the best you can come up with.
April 3, 2009 5:06 PM | Reply | Permalink
Did Sun Tzu have any advice for dealing with addle-pated louts?
April 3, 2009 9:22 PM | Reply | Permalink
You are a very inventive writer, Steve Katz.
April 3, 2009 6:10 PM | Reply | Permalink
I don't think he exactly made them feel like perps--they looked pretty damn pleased with themselves as they each filed out and plopped their cans down to interview with the Money Honey on the White House lawn.
April 3, 2009 8:54 PM | Reply | Permalink
This is really fine Steve. NO KIDDING. I just found it.
You are hereby awarded the Dayly Blog Award of the Day for this here TPMC site given to all of you from all of me.
REALLY, REALLY FINE STUFF.
April 3, 2009 9:05 PM | Reply | Permalink
All of the above comments notwithstanding, the exception given to dickday's, I highly rec this post.
April 3, 2009 9:11 PM | Reply | Permalink
Nice Narrative. I hope you are right.
(sharpens pitchfork)
April 3, 2009 9:21 PM | Reply | Permalink
Geez, I have to think about this some more Steve.
I just love stuff like this.
I could care less about the politics tooo. No kidding.
I shall reread this several times over the next two days.
I like to even attempt to write like this. THis is how I think.
April 3, 2009 9:52 PM | Reply | Permalink
wisdom, sincerely, benevolence,
Typo alert, middle word
The symbolic standing up to the bad guys is nice, especially if it's for real and Obama lets a few more pitchforks get through the wall.
April 4, 2009 12:44 AM | Reply | Permalink
Sorry about the typo - it was a cut and paste. You missed my "the the." Nothing worse then a dyslexic blogger. TG for spell check.
Thanks for the comment, eds.
April 4, 2009 12:03 PM | Reply | Permalink
I had assumed the term would be 'sincerity' not 'sincerely'. Both appear on the web, but the former is correct English.
April 4, 2009 5:53 PM | Reply | Permalink
Hey Steve, I think you and if your description is correct, Obama, have made a mistake here about the TARP money.
The banks don't have the money to pay it back. They lack sufficient liquid assets. Them paying it back doesn't "send the wrong signal." It actually sends the right signal to the Street about which banks have stronger balance sheets. And they have every incentive to pay back quickly (as they should) because the first out from under the TARP will be able to recruit the best dealmakers.
But they don't have the money. It's gone.
This is not about appearances, it's about reality.
April 4, 2009 10:45 AM | Reply | Permalink
That's not exactly true, destor. Bank of America made $4 billion in profit last year.
Bank of America is now on the record saying they were forced to take TARP money because the government wanted broad "support" from financial industry.
If you read the original Politico story, you'll see that they actually begged Obama to allow them to return the money and he said no, because anyone on antibiotics would need a doctor and Obama has a better prescription than anyone else.
TARP allows Obama to have the same control over banks that he already has over GM.
April 4, 2009 11:00 AM | Reply | Permalink
BofA is a pretty bad example though and our Politico writers unfortunately know more about politics than finance.
BofA is in a position to return the TARP money only because we are subsidizing its purchasing of Merrill Lynch and have agreed to gauranty BofA against losses on securities both on its books and Merrill's. BofA got more than just TARP assistance.
Same is true for Goldman, another bank that has made rumblings about wanting to pay the money back. Goldman can only do this because we saved them from losses on AIG CDS contracts.
Citigroup is in sorry shape but it also got more than just TARP money.
It'd be one thing if we were talking about banks forced to take just one kind of aid for cosmetic reasons but BofA has been to multiple federal wells multiple times. Now they're the victims?
April 4, 2009 11:24 AM | Reply | Permalink
I certainly don't think banks are victims, but that the Government is now using TARP as a form of control of banking industry.
This is why Lewis repeatedly says that Bank of America has never been a failed bank, but it's being controlled by Government as if it already failed.
I also think Lewis implied rather openly during his Congress hearing that there is more to the Merrill Lynch aquisition (and especially to how it came about) than what was given in public statements.
You're right when you say they don't have the money - Lewis said as much in several interviews recently. But where we differ is the evolution from original TARP purpose to its current role.
April 4, 2009 11:41 AM | Reply | Permalink
Utter bullshit. Bank of America is heavily benefiting from government assistance, including just recently purchasing more "toxic assets", the huge losses from the Merrill Lynch sale they really could not afford, and would like nothing better than to get it without giving anything in return.
It is not just N dollars that exchanged hands, and just paying N dollars back will not cover it.
April 4, 2009 12:01 PM | Reply | Permalink
In your scenario, I would expect banks lining up for Government money. But the opposite seems to be happening, some already returned it, others keep begging Obama to let them and he won't.
TRAP money would be a better acronym, IMO.
April 4, 2009 12:06 PM | Reply | Permalink
I am not sure which "scenario" you are referring to that involved multiple banks.
If we do expand on the topic, though, there are undoubtedly banks that want to be "on their own" again now that some stabilisation has been achieved.
Are you ignoring or disagreeing with the hypothesis that only having the "bad banks" get funding would almost certainly cause them to be destroyed (and that this expectation would cause banks to forgo funding even if they needed it because they wanted to avoid the impression)?
April 4, 2009 2:46 PM | Reply | Permalink
BAC is posturing. GS is for real. GS has large cash reserves and had started cleaning up its mortgage-based portfolio just two years ago.
April 4, 2009 3:05 PM | Reply | Permalink
It's interesting that contrary to the way it was reported, there wasn't much agreement during this Obama/bankers meeting.
In fact, according to the Politico article this post is based on, Obama actually insisted that the government money remains at the banks - despite their requests to allow them to pay it back.
You want to RETURN tax payer money? How DARE you??
Which is exactly why Obama decided to put himself between the banks and pitchforks. He can control them through TARP and keep adding retro-active requirements.
Art of war indeed, except that I have a feeling that's he's fighting a different war than steve katz seems to think.
April 4, 2009 10:54 AM | Reply | Permalink
Fascinating post, Steve! I love it when people can combine ideas from one area to another. These combinations never work perfectly, of course. But offer useful perspectives from which to see situations in another light. We need more of this!
April 4, 2009 11:22 AM | Reply | Permalink
Thank you, Thera, your understanding, enlightenment, and encouragement is a great gift.
April 4, 2009 1:16 PM | Reply | Permalink
Great post Steve, I'm coming to this late. I don't agree with your view of the situation (i'm more with Dij and AA), but it's incredibly well presented. I like the way you write and think!
April 4, 2009 1:18 PM | Reply | Permalink
Now that some of the banksters are stabilized due to TARP and the counterparty payments...They want to go back to being 'out of control' of the Govn't..Obama is saying NO because they are working through the deregulation issue and none of these CROOKS should be allowed to weasel out of the agreements and new rules...He virtually has tripped them with their own wire...THEY WHINNED 'MASS CRISIS' NOW MUST LIVE WITH THE RESULTANT SCRUTINY!
April 4, 2009 1:39 PM | Reply | Permalink
I think this is exactly what is happening and the fine minds around here are helping. Thanks for the opportunity to view and think along. Your blog helps expand the discourse around the notions and assumptions of the oligarchs and POTUS. The racist was roused, but then revealed as well. Gee I guess Sun Tzu still is right about many things. Thanks, Steve.
April 4, 2009 2:46 PM | Reply | Permalink