Last week’s Politico Magazine ran a story quoting Wall Street executives who have become saddened and bewildered by how little pull they have in Washington:
“… it may be the first time since the Great Depression that the New York banker class has been this disconnected from both parties simultaneously. The pervasive dismay, alienation and hopelessness comes through in recent conversations with CEOs, hedge fund managers and private equity officials—all of them major Wall Street donors who’ve seen their influence in Washington tested and who are now uncertain whether and how to re-engage. ‘Like the rest of America, Wall Street is looking at Washington and saying whether we agree or disagree, they’re looking at both parties with complete revulsion,’ one private equity executive told us.”
The executives, almost all of whom declined to go on the record, say they don’t feel they’ve enjoyed either public respect or a private connection with the Obama administration. At the same time, they feel Mitt Romney was a terrible messenger, and they’ve been “turned off” by the Republicans this year. This puts the executives in a strange and awkward position: They don’t know who to give their money to.
The article doesn’t name specific policy grievances the bankers have. It’s possible that’s because they don’t really have that much to complain about. After its completion last week, even the once-despised Volcker Rule was pronounced “reasonable and one that the industry can live with” by the former chairman and CEO of Wells Fargo. From Bloomberg News, the day the rule was released:
“Goldman Sachs climbed 1.2 percent to $169.73 in New York, the stock’s highest close since it touched an almost three-year peak on Sept. 20. Morgan Stanley, which got 30 percent of its revenue in the 12 months through September from principal trading, climbed 1.3 percent to $30.77.”
You could see how the mere existence of Dodd-Frank would be offensive to Wall Street. But after the law passed, the finance industry, as ably documented by the Washington Monthly earlier this year, shifted its attention to the rule-making process, making sure the law was interpreted in a way “the industry can live with.”
These specifics are not to be found among the bankers’ anonymous laments to Politico. Their complaints come down to respect. They don’t feel they’re getting it, in the pre-2008 sense that they get every meeting and everything they want. The article inadvertently builds a powerful case that Wall Street has spent the last five years realizing there are people other than donors whom elected officials answer to, and these people have some power, too.
The people—voters—have had good reason to feel less respectful. If the finance industry is curious about why it’s so much harder to get a meeting in Washington, it could start its research in any number of places. Just this morning, Bloomberg News published an investigative piece about how, well after 2008, Bank of America hired a contractor that worked to prevent homeowners from modifying their loans under an Obama administration program designed to get homeowners above water.
“Instead of helping homeowners as promised under agreements with the U.S. Treasury Department, Bank of America stalled them with repeated requests for paperwork and incorrect income calculations, according to nine former Urban Lending employees. Some borrowers were sent into foreclosure or pricier loan modifications padded with fees resulting from the delays.”
It’s not that hard to figure out what everyone’s still so mad about.