Will Wall Street Get a Bigger Return on Investment with Republicans?
Commercial Banking Leans GOP
Interestingly, the commercial banking industry has been and remains more Republican in its political contributions -- according to the Washington Post, "after a brief dalliance with Democrats" -- commercial banks gave nearly twice as much to Republicans during the last three months of 2009.
What is bothering Wall Street about the Democratic party? While Wall Street clearly dislikes efforts to regulate it more and limit executive compensation, the straw that broke the camel's back was the January proposal to impose a TARP (Troubled Asset Relief Program) tax on financial firms. When Obama followed up a few days later with a plan to restrict the growth of large banks, The Washington Post quoted an anonymous banker as saying, "I'm not voting for him again."
But will Republicans be any better for Wall Street? After all, Republican candidates are also trying to curry favor with voters by spurring public outrage over bailouts and budget deficits -- part of which are due to those bailouts. Republicans might tone down their language a bit compared to Democrats -- but if President Obama is any indication, Democrats are trying to be on both sides of the Wall Street issue.
Outrage Or Empathy?
Obama has referred to Wall Street bonuses in a way that both captures public outrage over them and expresses empathy for Wall Street banker's plight. How so? According to the Washington Post, Obama has called outsize Wall Street bonuses "shameful" and "obscene" while also assuring business executives that he does not "begrudge people success or wealth."
Why should the average American care about this? Because Wall Street's interests do not always line up with theirs. For example, I am guessing that Wall Street is much happier about using up to $23.7 trillion in taxpayer cash and guarantees to keep its bankers in multimillion dollar bonuses than the taxpayers are.
And thanks to that bailout, Wall Street had a fantastically profitable 2009. Now it's using those profits to tilt Washington policy so it can preserve the heads-I-win, tails-you-lose regulatory structure that caused the financial crisis for the next generation of bankers.
If that means more Republicans in Washington, that's fine with Wall Street.