The White House is moving swiftly to stem the fallout from a potentially damaging interview President Obama gave on Tuesday, in which, it was reported, he did not "begrudge" the multibillion-dollar bonuses of Wall Street executives.
Administration aides insisted, in email exchanges with the Huffington Post, that the quote was largely overplayed. The story, they say, made it appear as if the president didn't mind massive compensation packages when he was simply stating that he didn't fault anyone for his or her personal or professional success. Moreover, they added, the president has made similar remarks many times before without getting the critical reception he received on Wednesday morning.
"The president has said countless times, as he did in the interview, that he doesn't 'begrudge' the success of Americans, but he also expressed 'shock' at the size of bonuses and made clear that there are a number of steps that need to be taken to change the culture of Wall Street," spokesperson Jen Psaki told the Huffington Post. "[That is] a sentiment he has consistently expressed since long before he took office."
On Wednesday morning, Bloomberg Business Week published the write-up of the 30-minute interview it conducted with the president the day before. The story led with Obama saying he does not "begrudge" the $17 million bonus awarded to JPMorgan Chase CEO Jamie Dimon or the $9 million issued to Goldman Sachs CEO Lloyd Blankfein. Acknowledging it was "an extraordinary amount of money," Obama went on to note that "there are some baseball players who are making more than that and don't get to the World Series either, so I'm shocked by that as well."
The National Republican Congressional Committee was quick on the attack, sending the story to reporters under the title: "OBAMA SUDDENLY SCALES BACK ANTI-WALL STREET RHETORIC." On the opposite end of the ideological spectrum -- and at a slightly more elevated intellectual level -- Paul Krugman of the New York Times called the president "clueless."
"First of all, to my knowledge, irresponsible behavior by baseball players hasn't brought the world economy to the brink of collapse and cost millions of innocent Americans their jobs and/or houses," Krugman wrote. "And more specifically, not only has the financial industry has been bailed out with taxpayer commitments; it continues to rely on a taxpayer backstop for its stability."
But White House aides insist that the president is far from casual about executive compensation packages on Wall Street -- though, as reported by ABC's Jake Tapper, the rhetoric was a far cry from when the president called the bonus culture on Wall Street "obscene" and "shameful." Providing a full transcript of the interview, administration officials argued that Obama's quote was far more nuanced than Bloomberg reported.
BLOOMBERG: Let's talk bonuses for a minute: Lloyd Blankfein, $9 million; Jamie Dimon, $17 million. Now, granted, those were in stock and less than what some had expected. But are those numbers okay?
THE PRESIDENT: Well, look, first of all, I know both those guys. They're very savvy businessmen. And I, like most of the American people, don't begrudge people success or wealth. That's part of the free market system. I do think that the compensation packages that we've seen over the last decade at least have not matched up always to performance. I think that shareholders oftentimes have not had any significant say in the pay structures for CEOs.
BLOOMBERG: Seventeen million dollars is a lot for Main Street to stomach.
THE PRESIDENT: Listen, $17 million is an extraordinary amount of money. Of course, there are some baseball players who are making more than that who don't get to the World Series either. So I'm shocked by that as well. I guess the main principle we want to promote is a simple principle of "say on pay," that shareholders have a chance to actually scrutinize what CEOs are getting paid. And I think that serves as a restraint and helps align performance with pay. The other thing we do think is the more that pay comes in the form of stock that requires proven performance over a certain period of time as opposed to quarterly earnings is a fairer way of measuring CEOs' success and ultimately will make the performance of American businesses better.
Bloomberg, to its credit, did highlight much of Obama's plan to rein in excessive compensation packages. But it did so midway down the article, at a distance from the more inflammatory portions of the president's quote.
But what has White House aides even more bothered, however, is that fact that the president was simply using a tried and tested talking point only to have it treated like a major revelation. On that front, they're right.
In February 2009, Obama gave a speech on executive compensation in which he declared that, in American, "we don't disparage wealth. We don't begrudge anybody for achieving success. And we believe that success should be rewarded." In March 2009, Obama told the Business Roundtable that the job of a lawmaker is "not to disparage wealth, but to expand its reach." And in a brief statement on executive compensation in October 2009, Obama repeated the lines: "We don't disparage wealth; we don't begrudge anybody for doing well. We believe in success. But it does offend our values when executives of big financial firms -- firms that are struggling -- pay themselves huge bonuses, even as they continue to rely on taxpayer assistance to stay afloat.