President Barack Obama’s estrangement from Wall Street is costing him money in fewer campaign donations even as it is fueling his argument for re- election.
Since the start of his campaign through Aug. 20, Obama has spent an estimated $132 million on television commercials, with $22 million -- or 17 percent -- on an ad defending the new law he signed tightening bank oversight and criticizing Republican challenger Mitt Romney’s opposition to it.
“Rather than attack the industry, he’s been able to use Romney’s positions and focus on that as opposed to doing what the conventional wisdom suggested and run a very populist campaign focused on bashing Wall Street,” said Elizabeth Wilner, vice president of New York-based Kantar Media’s CMAG, a company that tracks television ads.
As Obama takes the stage at Bank of America Stadium in Charlotte to accept the Democratic nomination, some of the political ramifications of the Wall Street Reform and Consumer Protection Act are already on display.
Employees in the financial, insurance and real estate industries, which pumped $43 million into the president’s campaign four years ago, have given Romney $29 million this year, more than twice the $12 million they’ve donated to Obama’s re-election, according to the Center for Responsive Politics, a Washington-based research group.
Meanwhile, public opinion on the bank measure favors the president. Voters support the law by a 53-point margin, 73 percent to 20 percent, according to a July 18 Lake Research Partners survey. Republicans back the measure by a 20-point margin, and independents by 50 points, the survey showed.
That explains why Obama’s re-election campaign has highlighted his signing the law and Romney’s opposition to it. More than half of the $22 million he spent on the commercial went to airing it nationwide during the London Summer Olympics.
“They very clearly decided that the message of that ad was something they wanted Americans across the country to see,” Wilner said.
The commercial featured the president facing the camera and criticizing Romney for advocating repeal of the law, called Dodd-Frank for Democratic sponsors former Senator Chris Dodd of Connecticut and Representative Barney Frank of Massachusetts, and enacted over Republican opposition -- including that of Romney’s running mate, Representative Paul Ryan of Wisconsin.
“Governor Romney’s plan would cut taxes for the folks at the very top, roll back regulations on big banks, and he says that if we do our economy will grow and everyone will benefit,” Obama says in the ad. “But you know what? We tried that top- down approach. It’s what caused the mess in the first place.”
The president’s re-election supporters, echoing attacks made by Romney’s primary rivals, have focused on the former private-equity investor’s tenure at Bain Capital LLC, which he co-founded. The campaign and its allies have aired more than 1,000 TV ads that are critical of Romney’s stewardship of the private-equity firm.
The pro-Obama super-political action committee Priorities USA Action ran an ad featuring an ex-employee of GS Steel in Kansas City, formerly owned by Bain Capital. “This was a booming place,” the former employee, Donnie Box, says in the ad, “and Mitt Romney and Bain Capital turned it into a junkyard, just making money and leaving.”
It is “a backdoor attempt to attack Wall Street without doing so directly,” said David Primo, a political science professor at the University of Rochester in New York. “It’s an attempt to go after Wall Street while holding out your hand for money.”
Republicans have tried to inoculate Romney against those attacks by painting Obama as Wall Street’s favorite candidate. The pro-Republican American Future Fund, a nonprofit group that doesn’t disclose its donors, spent $1.3 million on commercials criticizing Obama’s support of the bank bailout and the prevalence of White House aides with ties to the investment community, according to CMAG.
Wall Street Ties
The ad doesn’t name the administration individuals who have moved between the financial community and the White House. They include Chief of Staff Jack Lew, who formerly worked at Citigroup Inc. (C), and Gene Sperling, director of the National Economic Council, who was a consultant at Goldman Sachs Group Inc. (GS)
“Obama won’t admit to supporting Wall Street but Wall Street sure supports President Obama,” the ad says.
That isn’t the case when it comes to campaign donations.
Obama raised $15.8 million from employees in the securities and investment industry and their families in 2008, more than anyone else, according to the center. This cycle, Romney has collected $11.5 million from the industry compared with $4.2 million for Obama through July 31.
The president held a financial industry fundraiser that same month in New York, acknowledging that his support has fallen on Wall Street.
“So many people in this room were active in 2008,” he said. “So many of you have had to defend me from your co- workers over the last three years.”
Robert Wolf, the former chairman of UBS AG (UBSN)’s Americas unit who raised more than $500,000 for Obama in both 2008 and this cycle, said the campaign is holding fewer financial-industry fundraisers this year, and those always sell out.
“Not everyone decides how they want to vote based on the Dodd-Frank bill,” said Wolf, who is chief executive officer of New York-based 32 Advisors LLC.
Romney’s support on Wall Street extends beyond the debate over the new regulations, said Emil Henry Jr., a former Bush administration assistant Treasury secretary.
“The president has shown an inability to provide leadership on the pressing financial issues of our time such as debt, deficits and entitlement reform,” said Henry, who has organized fundraising events for Romney. “These issues are primary for many in the financial services community.”
To contact the reporter on this story: Jonathan D. Salant in Washington at email@example.com
To contact the editor responsible for this story: Jeanne Cummings at firstname.lastname@example.org