Wall Street Might Need to Make Up With Obama
After yesterday’s electoral victory by President Barack Obama is there any reason to think relations between the administration and Wall Street will be any warmer?
Based on where the nation’s biggest financial firms put their money, a healthy measure of skepticism is understandable.
Of the 10 biggest donors to Obama during the 2012 election cycle, none were from Wall Street, according to data compiled by Bloomberg. Topping the list was the U.S. government, or rather its employees -- they gave a combined $325,295. The rest of Obama’s donor list was dominated by Silicon Valley and universities.
Compare that to the donor roster for losing candidate Republican Mitt Romney: Eight of his top 10 contributors were either commercial or investment banks, accounting firms or investment funds. Topping the list was Goldman Sachs Group Inc., which was responsible for $502,930, followed by Morgan Stanley, with $406,330. Again, all amounts attributed to the companies reflect contributions by employees.
The reversal from four years ago is in keeping with Wall Street’s antipathy to one of the signature pieces of legislation Obama signed into law, the Dodd-Frank Act of 2010. The law, a response to the financial crisis of 2008, places restraints on some of Wall Street’s most profitable activities and is designed to make the financial system less susceptible to meltdowns.
In the 2008 election, Goldman Sachs and its employees gave even more to Obama than they shipped to Romney this year -- $572,544. JPMorgan Chase & Co. was next among financial industry donors, giving Obama $468,431. This time the firm didn’t crack Obama’s top 10.
Romney, of course, along with the Republican Party, promised to roll back Dodd-Frank, which they blamed for everything from disappointing economic growth, to banks’ reluctance to lend, to the declining competitiveness of the U.S. financial industry.
Dodd-Frank wasn’t the only issue that aggravated Wall Street. Obama, according to the financiers’ jeremiad, was “demonizing” them after the president tossed off a few choice barbs about “fat cat bankers” back in 2009.
OK, so maybe that was a trifle unkind, but it was understandable politically. The rhetoric, remember, was in line with the general sentiment at the time -- that bankers were unrepentant for the part they played in the near-collapse and wanted nothing so much as a return to business as usual. (When did bankers become so sensitive, anyway?)
And yet there is room for a reset. Obama won without the financial industry’s backing and may not feel much of an obligation to play nice. But Wall Street needs him.
Think about it. Sherrod Brown, Democrat of Ohio, won re- election. He is the sponsor of a bill to break up or cap the size of the nation’s biggest banks. Then there’s the industry’s bete noire, Elizabeth Warren, who won the race for a Senate seat in Massachusetts. She was the architect of the Consumer Financial Protection Bureau, which bankers have tried every which way to neuter.
So it might not hurt if Wall Street had a friend in Obama again.
(James Greiff is a member of Bloomberg View’s editorial board.)
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