Goldman Sachs chief Lloyd Blankfein, Morgan Stanley CEO John Mack, and Citigroup chairman Dick Parsons were all supposed to be in Washington yesterday to meet with President Obama at the White House. But then a tiny patch of fog materialized in the skies overhead and they had to retreat to their offices, victims of a force even more powerful than Wall Street's mightiest: Mother Nature. So how did that go down in Washington?
Not surprisingly, the president wasn't too happy about the snub. President Obama, reports Andrew Ross Sorkin, "didn't exactly look thrilled as he stared at the Polycom speakerphone in front of him." (The three men joined by phone.) And although the three seemed to be sort of bummed they couldn't be there in person—"You could hear it in Mr. Mack and Mr. Blankfein's voice when they got on the call," reports Sorkin—the fact they missed it sent an unmistakable message, and also said a good deal about the shift that's taken place in recent months:
That awkward moment on speakerphone in the White House, for better or worse, spoke volumes about how the balance of power between Wall Street and Washington has shifted again, back in Wall Street's favor.
Now that Citigroup has given back its bailout money—and Wells Fargo announced late on Monday that it would, too—whatever leverage Washington had over the financial services industry seems to be quickly eroding.
Executive compensation, leverage limits and lending standards were all issues that Washington said it planned to change — and when the taxpayers were the shareholders of these firms, it probably could have done so. But now the White House has been left in the position of extending invitations, rather than exercising its clout. And in the figurative and literal sense, it is getting stood up.
That's one way to read it. Or maybe their absence really was due to the foggy weather, they really did want to attend, and they never had any intention of sending a message to Washington, in which case the whole thing has been totally blown out of proportion. You decide!