President Barack Obama has vacillated between his pragmatic legislative instincts and the power of populist messages. | AP photo composite by POLITICO Obama's mixed Wall St. message

When President Barack Obama unveiled new restrictions on banks last month, he warned that the industry would fight it and vowed: “If these folks want a fight, it’s a fight I’m ready to have.”

Tough talk, but it was hard to know how seriously to take it, because the president has sent a series of conflicting messages about Wall Street and a host of other big special interests he vowed to confront when he came to office.


In a Dec. 13 interview with “60 Minutes,” for instance, Obama described Wall Street chieftains derisively, calling them “fat cat bankers.”

The next day, after meeting privately at the White House with some of those bankers, the president emerged to announce that he had had a “candid and productive meeting with the CEOs of 12 of our nation’s largest financial institutions” and that he wasn’t interested in “vilifying any one person or institution or industry.”

Throughout his first year in office, Obama has vacillated between his pragmatic legislative instincts and the power of populist messages that can prompt cheers from his progressive base. In the health care debate, Obama didn’t go after insurers until August — after the tea partiers drew blood during the summer town hall meetings.

The contrast between those two messages and governing models has grown only more intense in recent months as independent voters joined the ranks of the disenchanted and began to pose an increasing threat to Obama’s congressional majorities.

Doug Schoen, a Democratic adviser who served in the Clinton administration, is sympathetic to the White House’s struggle to show empathy with angry voters while resisting extreme policy proposals. But he doesn’t think the strategy will work.

“By playing class-based politics, you don’t win votes. While you may rev up the base temporarily, it’s not ultimately good politics or good government,” said Schoen.

And, worse still, “by gyrating back and forth from being a populist to being a responsible centrist, it makes him look synthetic, not believable, because there is no consistent view,” he added.

Jen Psaki, a White House spokeswoman, asserted that the president’s messages have been consistent, but “you can be frustrated and you can be angry and be outraged, which the president is” when it comes to Wall Street’s quick return to big bonuses and oversize compensation packages.

“But there is also a need to continue to grow the economy, and that’s why it’s important that we continue to work with the business community,” she added.

Obama’s message has been especially contradictory in the run-up to the Senate debate over a proposal to revamp regulatory oversight of the financial services industry, an issue expected to come to the floor this week.

In addition to the jarring shift in tone after the December “60 Minutes” interview, Obama on Jan. 6 previewed a new bank tax with reporters, saying “financial firms play an essential role in our economy” and that the purpose of the tax was “not to punish the financial industry” but simply to recover the bailout funds. A week later, while officially unveiling the plan, a defiant president grabbed headlines by declaring: “We want our money back, and we’re gonna get it!”

The president was still in a combative mood a week later, when he unveiled new reforms to rein in banks and labeled the latest round of bonuses “obscene.” But two weeks later, the president told Bloomberg News that he didn’t “begrudge” the $26 million in bonuses awarded to Jamie Dimon of JPMorgan and Lloyd Blankfein of Goldman Sachs.

“I know both those guys; they are very savvy businessmen,” Obama said, setting off a scramble by White House blog writers to try to explain the contraction.

The fluctuating messages have infuriated bank executives, who say they’ve been sandbagged and exploited by the White House, even though many are open to some new regulations and a few have even conceded the bank tax is a small price to pay for removing them from the public’s hit list.

A case in point: The same week Obama held out the bankers as an example of an intransigent special interest in his State of the Union speech, the White House had quietly called on them to dispatch their “phalanx of lobbyists” — as Obama has dubbed them — to salvage his reappointment of Federal Reserve Chairman Ben Bernanke.

The White House isn’t likely to lose sleep over hurt feelings among the bankers. But the administration is monitoring a more troubling trend: Polls show voters increasingly believe that Obama has failed to stand up to special interests or that he’s more concerned about those interests than average people.

A poll commissioned by campaign finance advocates last month found that a majority of both Democrats and Republicans say special interests have gained rather than lost influence since Obama took office.

“People think special interests are dominant,” said Stan Greenberg, a leading Democratic pollster who worked with Republican pollster Mark McKinnon.

Before Republican Sen. Scott Brown’s victory in the Massachusetts special election, Democracy Corps, Greenberg’s research group, surveyed independent voters and found that 49 percent of them said Obama and the Democratic Congress were more concerned with bailing out Wall Street than with creating jobs, while 41 percent disagreed with that.

Those voters, by 48 percent to 16 percent, said Obama “puts Wall Street ahead of the middle class.”

After Obama’s State of the Union speech, in which he bemoaned the bailout and highlighted the bank tax and financial regulatory reform, the percentage of independents who said Obama was more concerned with Wall Street than with the middle class plummeted 50 points.

“Obama’s strong words for the banks clearly resonated,” the researchers concluded.

But Democracy Corps found reason for caution in its post-speech polling as well.

“For these voters whose attitudes shifted from disapproval to approval of Obama’s performance as president, one consistent question remained: Can he deliver? Unlike most attributes that shifted during the speech, ‘promises things that sound good but won’t be able to get them done’ remained very high, registering at 78 percent before the speech and 74 percent after it,” the report said.

That is raising the stakes on Obama to deliver not just on health care reform but also on jobs and regulation reform.

An unanswered question for now is whether Obama’s inconsistent treatment of the banks has provoked greater resistance to his Wall Street regulation reform proposals.

Republican leaders certainly seem to think it has. House Minority Leader John Boehner has been openly courting Wall Street, asking bank executives to shift their political giving to reward Republicans who oppose the Democratic proposals.

Glen Bolger, a Republican polling expert who worked on a bipartisan survey that found results similar to those of Democracy Corps, said Obama is risking being seen as “just another politician who couldn’t or wouldn’t stand up to the special interests.”

Still, Bolger sees a potential escape hatch for Obama and congressional Democrats: an improved economy. “America is a lot more forgiving if the economy is doing well,” said Bolger.

But failure to pass regulation reform and other legislative priorities “will be another brick in the wall if the economy isn’t doing well,” he added.