Wall Street

Stop Bashing Obama Over Paid Wall Street Speeches

"The conversation between centrist politics and global finance shouldn’t be allowed to break down."

Keep talking.

Photographer: Isaac Brekken/Getty Images for National Clean Energy Summit

OK, so Barack Obama, less than 100 days out of the White House, has agreed – according to Fox Business, quoting sources within Cantor Fitzgerald LP – to give a speech at the firm’s health-care conference later this year. For this, Obama is apparently going to be paid $400,000. The former president hasn’t confirmed this himself, and even if it turns out to be true, he may still withdraw. But talking heads everywhere are already attacking his decision. The newest Fox News superstar, Tucker Carlson, insisted it was "indefensible."

Except it isn’t. Obama should be praised, for two reasons: first, for refusing to buy the notion that there is something inherently corrupt about delivering a paid speech; and second, for recognizing that channels of communication between finance and centrist politics continue to be important, even in this age of angry populism.

When Hillary Clinton was attacked, during the Democratic presidential primary and after, for delivering paid speeches to Wall Street banks – for just over half of what Obama is supposedly going to be paid – the criticism made a distinct argument. Anyone being paid such sums for a speech or a question-and-answer session must, by this way of thinking, be in Wall Street’s pocket. The strong implication: Speaking fees are bribery by another name.

As Senator Bernie Sanders put it sarcastically: "I kind of think if you’re going to be paid $225,000 for a speech, it must be a fantastic speech …. $225,000 is an extraordinary speech. A Shakespearean speech." Sanders’s attacks on Clinton’s speeches were effective: this one was delivered in the run-up to the Michigan primary, which he startled everyone by winning – a defeat for Clinton that presaged her loss there to Donald Trump in November.

This was an illogical argument when it was used against Clinton, and it is even more illogical when used against Obama. It rests on the laughable assumption that the average firm is only interested in paying to hear from famous people who do them favors, or who pander to them. (By that logic it’s difficult to see why William Shatner, for example, would then get paid the big bucks. Or Mike Tyson.) In fact, when Clinton’s speeches to Wall Street were finally leaked, the most interesting fact about them is that she didn’t pander. She made the case to her audience that, "even if not 100 percent true," the perception "that somehow the game is rigged" was a problem for everyone because "public trust is at the core of both a free-market economy and a democracy."

Which brings us to the second reason why Obama’s decision to speak at a Cantor Fitzgerald conference – if he sticks with it – is praiseworthy: Because the conversation between centrist politics and global finance shouldn’t be allowed to break down.

In the years after the financial crisis, it was important for politicians to speak directly and collegially to Wall Street and make the point that it shouldn’t ignore the growing public anger about its apparent impunity. It was important for Clinton to defend political compromise then, and it is important for Obama to defend his health-care legacy now, when its financial underpinnings look increasingly unstable. If you claim that politicians should talk to financiers only in combative soundbites, you’re asking for the sort of permanent confrontation that helps nobody.

We’re living in the sort of world where posturing too often counts for more than facts, where communication matters less the more content it contains. This is a world where Trump could declare on the campaign trail that his opponents were “totally controlled by Goldman Sachs and then quietly pack his presidential administration with cronies from Wall Street.

It might be easy for the political center to, at this moment, make a false god of "perception." But that would be as inauthentic as Trump’s populist anger. Stand up straight and repeat the liberal centrists’ creed: We talk to everybody, because everyone might help us craft a workable compromise. Transparent, well-regulated, credible markets help us all. Compromise works.

So yes, Obama should go and talk to Cantor Fitzgerald, and he should be paid the going rate for speeches for recent ex-presidents. Perhaps, if the criticism gets too cutting, he should donate the fee to charity. But even if he decides to hang on to it, that’s not corruption. In fact, it would be a sign that some people, at least, aren’t willing to dump common sense for populist posturing.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

    To contact the author of this story:
    Mihir Sharma at m.s.sharma@gmail.com

    To contact the editor responsible for this story:
    Jonathan Landman at jlandman4@bloomberg.net

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