In a lengthy interview with CNBC's John Harwood on Wednesday, President Obama made a clear case to Wall Street: This isn't just another squabble. His obvious goal wasn't to spook the unflappable markets. It was a call for more lobbying.
The entire interview, which can be seen at right, might as well be overlaid with a blinking "CALL YOUR CONGRESSMEMBER NOW" sign. At first, Obama walks the new party line that he'll negotiate with Republicans once the government is operating and the debt ceiling has been raised. But he quickly transitions to his real point. "I'm pretty well known for being a calm guy," he says. But that calmness has been exhausted during this fight — as should CNBC viewers'.
Harwood: Wall Street's been pretty calm about this. The reaction I would say generally speaking has been — Washington fighting, Washington posturing, yada yada yada. Is that the right way for them to look at it?
Obama: No, I think this time is different. I think they should be concerned. I had a chance to speak to some of the financial industry who came down for their typical trip, and I told them that it is not unusual for Democrats and Republicans to disagree. That's the way the Founders designed our government. Democracy is messy.
When you have a situation in which a faction is willing potentially to default on U.S. Government obligations, then we are in trouble. And if they're willing to do it now, they'll be willing to do it later.
Harwood's point is reflected in the markets. Here's what the Dow Jones Industrial Average has done over the past five days — a dip when the shutdown kicked in, but little volatility or decline.
However, the business lobby, as the Associated Press noted, has been an unlikely ally of the Democrats' on the shutdown. The meeting to which Obama refers was with over a dozen CEOs from large financial institutions, who presumably received the same message as the one above. On Monday, as the clock ticked down toward the shutdown, the Chamber of Commerce released a letter signed by over 250 business leaders urging Congress to "raise the debt ceiling in a timely manner and remove any threat to the full faith and credit of the United States government." This is an organization that only last November gave the maximum contribution to try and unseat President Obama and another $198,000 to other Republican candidates. But in this fight, it has his back. Harwood at one point raised the question explicitly.
Harwood: Can these Wall Street guys influence those people?
Obama: I think Wall Street can have an influence. CEOs around the country can have an influence.
I think it is important for them to recognize that this is going to have a profound impact on our economy and their bottom lines, their employees, and their shareholders unless we start seeing a different attitude on the part of that faction in Congress.
Our colleagues at The Atlantic outlined some of the effects those CEOs are likely already seeing. Obama's appearance on CNBC — the NBC family's financial news channel — was meant to link that damage to the actions of his Republican opposition. Obama's hope is that those CEOs might become more active in reaching out to their traditional allies in Republican districts and demand the shutdown be resolved. CEOs may never be as loud as the Tea Partiers embracing the current scenario, but they give a lot more money at fundraisers.