The Fourteenth Banker Blog

January 7, 2011

So Bill Daley, Who’s Your Daddy?

Filed under: Running Commentary — thefourteenthbanker @ 7:26 AM

Yesterday President Obama heralded his newly appointed Chief of Staff, to great fanfare from the Republicans, US Chamber of Commerce, Wall Street Journal and others. According to the Wall Street Journal,

The selection of Mr. Daley shows that the president is more concerned with reaching out to the independent voters and to the Republicans who now control the House and have greater numbers in the Senate.

Per CNN,

Daley is the son of legendary Chicago Mayor Richard J. Daley and brother of the city’s current mayor, Richard M. Daley. He runs Midwest operations for the investment bank JP Morgan Chase, and his appointment is expected to help patch up Obama’s frosty relations with the business community after nasty battles over health care reform, taxes and government regulations.

So I am open-minded about this. Clearly Obama needs a change in program and needs someone who can reach across the aisle. But reaching across the aisle is not the same as capitulating.

Even the Huffington Post reporting is fairly sanguine on this.

Daley, the son and brother of Chicago mayors, has always been the Inside Daley, the one who deals quietly with the powers that be in the city and country — the brokers of money, commerce, family and tribal politics.

Daley is an ancestral Democrat, which means that he believes in the government’s role in helping people survive and live a decent life. He is an Irishman through and through, with a fierce faith in friends and loyalty. He is a big-city guy, at home in big-city haunts.

But he is not an ideologue of the left or right. He helped Bill Clinton pass free-trade agreements, even though Democratic union bosses hated them. Now a banker, he opposed some provisions of the bank-reform bill. He also expressed skepticism about the political and substantive wisdom of Obama’s spending a year on health care reform. He’s not for government for government’s sake.

The question for Daley is “who’s your daddy?” The revolving door between Wall Street and Washington power elites is still revolving. His predecessors have proven to be lap-dogs. As a big bank insider, Daley knows. He knows the games being played. He knows the scare tactics used to manipulate Washington for what they are, scare tactics designed to keep the status quo. He knows the business tactics and the business ethics. He knows the compensation structure and what it incents. He knows what management really cares about. He knows why executives shun shareholder empowerment. He knows why they offshore so many jobs. He knows why trading operations are housed where they are and how trans-national banks play the regulatory arbitrage game globally. He knows if the books are cooked. He knows if Primary Dealers get a heads up on Fed market actions and why they win in trading virtually every day, whichever way the markets move. He knows if they trade against their customers. He knows why they fight transparency. He knows why they fear Elizabeth Warren and may attempt to castrate her budget.

With this knowledge comes a greater responsibility.

Our financial system is past its prime. It is not longer suitable for the evolving society. So will Daley stand for the entrenched interests, or muster the courage to help the President usher in a new age by rigorous enforcement and funding of Dodd-Frank, such as it is, and by pressing for additional measures to close gaps in the legislation? Should a new crisis emerge, will he allow the process of creative destruction to take place with adequate systemic safeguards as proposed by Bill Black and Randall Wray? Will he permit bondholders to take the haircuts their risks and rewards warrant or will he support the big bank subsidy of implicit TBTF status?

Bill Daley, who’s your daddy?

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3 Comments »

  1. daley is yet another foot-hold for a big bank to latch onto in the white house; and the less-than-honorable claim to having helped pass NAFTA as part of the disgraceful clinton administration should qualify him for the same unemployment line that he generously helped so many middle-class US citizens to join. he opposes heath-care reform and the consumer protection agency. i’m sure he’ll do his level best to limit elizabeth warren’s access to the oval office … as if the occupant actually wants to have anything to do with her anyway.

    this is just another item on the checklist suggesting that the hopey-changey hypocrite in the white house deserves the label “one-term-obama”

    Comment by michael — January 7, 2011 @ 8:55 AM | Reply

  2. Bill Daley is part of the revolving door between Wall Street and Washington power elites. Why would he take any action against the interests of his class and his own interest? Unlike the majority of Americans these elites always fight for their own interests. When will the majority learn to look beyond the rhetoric and discover their true self interests? It is all about the economics.

    These elites continue to take from the people and the government even to the detriment of the nation. It was the middle and lower classes that made our nation an industrial giant, the largest consumer economy and the largest FIRE economy. And somehow the elites think that it was their labor that made this country great. Somewhere along the way they forgot the huge government regulatory, tax and contracting subsidies which created a majority of their wealth. They have forgotten how much wealth the take from the rest of us, including paying lower wages but charging high fees and prices. It is all so easy when you are a government and business elite. It is so easy to forget the rest of the economy when you are in control of the government, the law and the rules.

    At what point to they finally understand that we cannot survive under an economic system that forces us to substitute debt for income in order to provide food, shelter, clothing, energy and health care for our families. How long can the consumer continue to consume on borrowed money? How long can they continue to force us to pay for their foolish debts, wars, no bid contracts, tax entitlements and subsidies? This will not end well.
    No, Mr. Delay will not change the benefits his class receives. He will only continue their class war against the rest of us. Why not he knows and wants the prize that the rest of us can provide to them: the continued destruction of all classes but the elite and the transfer of our wealth to their pockets. They never have enough.

    Watch out Elizabeth Warren, they have you in their sites and will stop at nothing to destroy the new agency. They are looking for a new financial bubble.

    Comment by ella — January 7, 2011 @ 9:52 AM | Reply

  3. Comrades will eventually come to the new rally?

    Comment by Jerry J — January 7, 2011 @ 11:30 PM | Reply


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