COMMENTS: Fat Cat Bankers Meet the President

CBS' primetime news magazine 60 Minutes obtained the soundbite that set up the Story of the Day. "I did not run for office to be helping out a bunch of--you know--fat cat bankers on Wall Street," President Barack Obama told Steve Kroft. All three newscasts led with the follow-up. The trio of White House correspondents covered the President's meeting with those same fat cats to urge them to extend more credit to small businesses and to mortgage borrowers. In attendance were the chief executives of the major banks that received, and for the most part repaid, TARP bailout funds from the Treasury Department.

NBC's Savannah Guthrie interpreted the President as making "a show of his frustration with Wall Street" when she ran a second 60 Minutes soundbite: "The people on Wall Street still do not get it." She called his tone "angry, frustrated." On CBS, Chip Reid exaggerated when he referred to Obama's words as "angry, populist rhetoric." His assessment that the meeting "seemed a bit awkward" avoided such sensationalism.

ABC's Jake Tapper told us that the banks are extending $600bn less in credit to consumers and businesses than they were a year ago. The federal program for homeowners to renegotiate their mortgages was supposed to apply to 4m loans whereas 760K applications have been filed and only 31K have been granted. NBC's Guthrie reported that lending to small business "has decreased for the last four consecutive quarters." CBS' Reid reminded us that the President also called the same group of bankers to the White House in March (here and here) to make the same pitch to extend credit. The bankers "said the same thing, that they would do everything in their power to increase lending. Since then lending by the big banks has decreased steadily."

So what are banks doing with their capital instead? CBS' Wyatt Andrews filed a Reality Check: $20bn has been used by Citigroup to repay much of its TARP bailout loan and $45bn from Bank of America; $17bn has been set aside by Goldman Sachs to pay year-end bonuses. CNBC's economist Steve Liesman told NBC anchor Brian Williams that Wells Fargo would repay $25bn to TARP. All the paybacks mean that the leverage for the federal government to make the banks loosen credit is "slim to none," CNBC's Liesman observed. "At the end of the day the government is tremendously conflicted here. They want the banks to lend to small business but they also have to regulate the banks. And they do not want them making lousy loans out there."


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