A few years ago, Larry Summers, then the director of President Barack Obama’s National Economic Council, held a private meeting with some of Wall Street’s top bankers and executives.
Although the worst of the financial crisis was over by then, summers – now seen as a candidate to be the next chairman of the U.S. Federal Reserve – chastised bankers for being out of touch, saying they didn’t understand how angry average Americans were with them, according to a participant in the meeting.
A spokeswoman for Summers said it sounded like something he might have said, though she did not provide more specific confirmation.
Five years after the collapse of Lehman Brothers and two years after the start of the Occupy Wall Street movement, Wall Street has drastically changed under an onslaught of new regulations and by some accounts become more conscious of its image on Main Street.
Still, a new Reuters/Ipsos poll shows Main Street animus against bankers and their role in the financial crisis persists. (Click on http://link.reuters.com/sud23v for the results)
The anti-Wall Street sentiment bodes ill for the sector: It serves to pressure lawmakers and regulators into further restraining perceived excesses on Wall Street, threatening the long-term profitability of the industry.
Kenneth Feinberg, the so-called pay czar who was charged by the U.S. government with keeping bonuses in check at bailed-out firms after the crisis, agreed with the respondents that pay was still too high on Wall Street but said he didn’t believe it was the government’s job to regulate compensation.
“American history teaches us that there’s always been a wide chasm between Wall Street and Main Street,” Feinberg said. “I don’t think anything that Wall Street can do will bridge that divide.