Washington The sweeping overhaul of the nation’s financial industry is President Barack Obama’s answer to the nation’s outrage over Wall Street bailouts.
But come November if more Americans don’t have jobs, Democrats in Congress could very well lose theirs, too.
That’s clearly not lost on party leaders.
“This law will send a clear warning: no longer will we allow recklessness on Wall Street to cause joblessness on Main Street,” House Speaker Nancy Pelosi declared after the House and Senate reached agreement around dawn Friday on a measure overhauling rules overseeing the financial industry. “The legislation will end the era of taxpayer-funded bailouts and too-big-to-fail financial firms, and it will be fully paid for, with Wall Street footing the bill.”
Her carefully worded pitch was by design a nod to populist anger coursing through the electorate.
The still-fragile economy and persistently high unemployment are by far the foremost issues on voters’ minds in a tough election year for the party in power. Democrats are on the defense while Republicans have enthusiasm on their side four months before the first midterm elections of Obama’s presidency. Democrats are counting on bills like the health care overhaul and the financial regulation to help level the playing field. A remake of U.S. energy policy could be next.
Nothing short of the Democrats’ grip on power in Washington is at stake in November. And the outcome will shape the remainder of Obama’s first term and, perhaps, his likely 2012 re-election race.
A year in the making, the financial regulatory legislation couldn’t have come at a better time for the president, a gift as he headed to Canada for global economic talks with world leaders at the end of a challenging week. In Canada, Obama called for more stimulus to keep the world economy growing but ran into strong opposition from countries wanting to put deficit reduction first.
He fired the Afghanistan commander who raised doubts about the White House national security team. A deep-sea robot jostled a cap collecting crude oil from BP’s spewing Gulf Coast well. A judge blocked the administration’s offshore drilling moratorium. And Republicans again blocked his election-year stimulus jobs bill, a top agenda item for House and Senate Democrats looking to maintain majorities in Congress.
The unemployment rate still is hovering around 10 percent. Even though the economy is improving in some places, many people aren’t feeling it because they don’t have jobs. Most people — 72 percent in the latest Associated Press-GfK poll — describe the nation’s economy as poor. Fewer than half approve of how Obama is handling the economy and unemployment.
It’s not clear that voters want what the Democrats are selling — particularly the critical middle of the electorate that decides close races and that’s skeptical of Obama’s prescriptions. In praising the financial overhaul bill, Obama sought to strike a delicate balance between the need for free markets and the need for government intervention as he applauded the lawmakers’ latest action.
“Our economic growth and prosperity depend on a strong, robust financial sector, and I will continue to do what I can to foster and support a dynamic private sector,” he said. “But we’ve all seen what happens when there’s inadequate oversight and insufficient transparency on Wall Street.”
The latest AP-GfK poll shows that people are skeptical about Obama’s financial regulatory overhaul even though they don’t consider him responsible for the recession. An overwhelming majority blamed financial institutions and the federal government in the poll. More than half blamed Bush; a quarter blamed Obama.