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Updated Wednesday, December 16, 2009 9:30 am TWN, By Tom Raum, AP



	U.S. President Barack Obama, right, speaks to a speaker phone while meeting with financial services industry leaders in the Roosevelt Room of the White House in Washington, Monday, Dec. 14. Obama opened a meeting with top bankers at the White House on Monday that was aimed at persuading them to help lift the country out of the U.S. economic crisis. (Reuters) Enlarge Photo

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Obama implores top bankers to increase lending

Obama earlier in the year tried — with little apparent effect — to jawbone the leader of China into letting Chinese currency rise with market forces to help right global financial imbalances.

In 1961, President John F. Kennedy "jawboned" the steel industry into overturning a price increase after first encouraging labor to lower wage demands. President Lyndon Johnson was acknowledged by friend and foe alike as a master of the art of twisting arms.

George W. Bush criticized departing President Bill Clinton for not attempting to lower oil prices by "jawboning" OPEC to increase supply. But the former Texas oilman did no better on that score with OPEC after taking office. Clinton tried to use the White House pulpit to coax an end to a major league baseball strike in 1995, but it was ended without his intervention.

"Politically, the bankers are an unpopular group these days," said Democratic pollster Mark Mellman. "People believe that banks helped to create the desperate economic situation that we're in and that they've gotten a lot of money and haven't helped the economy in exchange."

Mellman also said Obama's jawboning "will only help to show the American people that he's focused on this issue. Honestly, that helps whether the banks respond or not."

The White House said Obama plans a similar meeting on Dec. 22 with heads of smaller financial institutions.

Using a sports analogy, Obama told the bankers Americans might be more sympathetic to outsize pay if those who got it were in the equivalent of a financial World Series, according to a senior administration official who lacked authorization to speak publicly and spoke on the condition of anonymity.

The bankers told Obama they are shifting from cash bonuses to longer-term payouts such as stock, but Obama said that was not good enough because the public was likely to still see it as excessive, this official said.

The bankers have said the amount of lending is limited by factors beyond their control: The sluggish economy and tighter oversight by regulators. The slow economy has businesses reluctant to expand — and makes banks more grim about their prospects. Loan applications are down.

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