The rumors are true: Former President Barack Obama will receive $400,000 to speak at a health care conference organized by the Wall Street firm Cantor Fitzgerald.
It should not be a surprise. This unseemly and unnecessary cash-in fits a pattern of bad behavior involving the financial sector, one that spans Obama’s entire presidency. That governing failure convinced millions of his onetime supporters that the president and his party were not, in fact, playing for their team, and helped pave the way for President Donald Trump. Obama’s Wall Street payday will confirm for many what they have long suspected: that the Democratic Party is managed by out-of-touch elites who do not understand or care about the concerns of ordinary Americans. It’s hard to fault those who come to this conclusion.
Obama refused to prosecute the rampant fraud behind the 2008 Wall Street collapse, despite inking multibillion-dollar settlement after multibillion-dollar settlement with major firms over misconduct ranging from foreclosure fraud to rigging energy markets to tax evasion. In some cases, big banks even pleaded guilty to felonies, but Obama’s Justice Department allowed actual human bankers to ride into the sunset. Early in his presidency, Obama vowed to spend up to $100 billion to help struggling families avert foreclosure. Instead, the administration converted the relief plan into a slush fund for big banks, as top traders at bailed-out firms were allowed to collect six-figure bonuses on the taxpayers’ dime.
Nothing forced Obama to govern this way. Had he truly believed that prosecuting bankers for obvious criminal fraud would cause an economic collapse, Obama would, presumably, have tried to radically reshape the financial sector. He did not. His administration’s finance-friendly policies damaged the economic recovery and generated a new cohort of Trump voters. As Nate Cohn of The New York Times has demonstrated, nearly one-fourth of Obama’s white working-class supporters in 2012 flipped for Trump in 2016. Racism and misogyny were surely part of Trump’s appeal, but not all two-time Obama voters turned to Trump out of bigotry alone.
It’s easier for Democrats to denounce Trump supporters as morally unworthy individuals than to consider whether governing failures in the Obama era contributed to Trump’s popularity. In the final years of his presidency, Obama made clear that he wanted to be remembered as a great Democratic reformer — a leader who expanded access to health care and embodied the humane, egalitarian side of Franklin Delano Roosevelt and Lyndon B. Johnson. But the disconnect between this progressive vision and his Wall Street record is not trivial. The Obama foreclosure plan hurt families. Refusing to punish financial crime has encouraged more of it. Workers are still digging out from the economic wreckage caused by too-big-to-fail banks in 2008, and those banks are bigger today than they were during the meltdown. Wealth accrues to a tiny population of bank executives and shareholders instead of flowing to households. Society is more unequal, and the prospects for progress depend on a financial sector fraught with unnecessary systemic risk.
This risk is not confined to the Trump presidency. Obama once called economic inequality “the defining challenge of our time,” but Democratic leaders have been steadfastly aligning their own personal fortunes with the very elites the system is rigged to favor. Throughout her 2016 presidential campaign, former Secretary of State Hillary Clinton was dogged by the millions of dollars in speaking fees she courted from major financial institutions after leaving the State Department. Her primary opponent, Sen. Bernie Sanders (I-Vt.), mocked a Clinton speech to Goldman Sachs, saying it must have been a “world-shattering” talk “probably written in Shakespearean prose.” She never had a good answer to questions about these talks during debates, and eventually she resorted to invoking the twisted logicof the Supreme Court’s infamous Citizens United decision in an effort to deflect accusations of corruption.
Clinton and her husband were worth over $100 million at the time. But a few million dollars between elites is not considered that big a deal in the Washington social scene. The money is an instrument of influence, rather than wealth ― a way of maintaining status, of exercising informal, unofficial, but very real power. It is a relationship incompatible with small-d democratic principles.
Sanders was not able to derail Clinton’s primary campaign with this critique. And die-hard Democrats will doubtless find ways to excuse or overlook Obama’s decision to follow in Clinton’s buckraking footsteps. Professional Democrats have admired Obama for many reasons despite his financial policy failures, and a few hundred grand will not make them reconsider this judgment. But the Goldman Sachs issue was a serious problem for Clinton during the general election, feeding right-wing narratives that she and her husband were fundamentally corrupt (not to be confused with the fairy tales about her killing Vince Foster and four Americans in Benghazi).
Obama isn’t running for office again, but his sellout sends even uglier signals to the electorate. Clinton had very limited policy power over the financial sector during her time at the State Department. Obama, on the other hand, had plenty. Voters could be forgiven for seeing a president cash out to Wall Street at the end of his term and concluding that maybe he wasn’t immune to those considerations when he was making policy in office.
“Regardless of venue or sponsor, President Obama will be true to his values, his vision, and his record,” Obama spokesman Eric Schultz told HuffPost in a written statement. “He recently accepted an invitation to speak at a health care conference in September, because, as a president who successfully passed health insurance reform, it’s an issue of great importance to him. With regard to this or any speech involving Wall Street sponsors, I’d just point out that in 2008, Barack Obama raised more money from Wall Street than any candidate in history ― and still went on to successfully pass and implement the toughest reforms on Wall Street since FDR.”
It is impossible to know what the 2010 Wall Street reform law would have looked like had Obama not received loads of campaign money from the financial sector. Maybe he would have broken up the banks. Maybe he would have reinstated Glass-Steagall. Campaign finance regulations — which the vast majority of Democratic voters support — would be unnecessary if political leaders were not influenced by campaign contributions.
What’s most baffling about Obama’s $400,000 payday is the fact that he doesn’t need the money. He and his wife, former first lady Michelle Obama, reportedly received $65 million from Penguin Random House for their memoirs. He is an excellent writer who has already written two best-selling books, and he’ll receive a handsome $200,000 pension from the federal government every year for the rest of his life. Several generations of Obamas will be financially secure. His legacy is not nearly as safe.