Read

Search form

This Is the Worst Election for Wall Street in Decades

This Is the Worst Election for Wall Street in Decades
Wed, 11/7/2012 - by Nathan Vardi
This article originally appeared on Forbes

In October, Wall Street hosted a rich fundraiser at the Hilton New York for Mitt Romney. Hedge fund, private equity and investment banking big shots were among the nearly 200 co-chairs of the event that cost $1,000 to attend. Those who shelled out $5,000 got to leave with a photo with vice-presidential hopeful Paul Ryan, who was the big draw of the event.

Wall Street made a huge bet on Mitt Romney and lost. The financial services sector contributed $61 million to Mitt Romney’s campaign compared to giving only $18.7 million to Barack Obama, according to the Center for Responsive Politics. The $80 million spent on the two 2012 presidential campaigns by the finance sector was more than any other single industry. The finance sector includes insurance and real estate, but make no mistake, Wall Street’s most important firms led the way. Employees of securities and investment firms gave $20 million to the Romney campaign and employees of just Goldman Sachs, once a Democratic money stronghold, gave Romney’s campaign about $900,000, compared to the $136,000 Goldman employees sent to the Obama campaign. Bank of America’s employees also were big givers to Romney’s campaign.

And that was just the cash that went directly to the campaigns. Wall Street was by far the biggest single sector donor to super PACs, with the securities and investments industry investing $94 million, much of it to groups that supported Romney. Much of this cash came from investment managers like Ken Griffin, Paul Singer, Robert Mercer, John Paulson, and Joe Ricketts.

Wall Street’s overwhelming support for Romney represented a big shift from 2008, when many in the financial sector enthusiastically backed Obama. In some ways they were supporting one of their own, given Romney’s private equity background as founder of Bain Capital. But they were largely motivated by their disdain for policies Obama directed against them and the derisive names he called them.

They say elections have consequences and Wall Street is probably going to experience at least some fallout from Obama’s victory. One of the reason’s that Wall Street backed Romney was that he promised to get rid of the Dodd-Frank financial reform law. Now, some elements of the law that Wall Street hates most and have yet to go into effect, like limiting the big banks from making speculative bets, will likely be implemented soon.

In addition, the carried interest tax trick, which has allowed private equity and hedge fund investors to pay lower capital gains taxes on rich performance fees as opposed to higher ordinary income tax rates, will be under direct threat. In fact, all dividend and capital gains tax rates may very well increase in a second Obama term, which Wall Street won’t like at all.

But perhaps the biggest loss for Wall Street from the 2012 election will be to its reputation. The finance sector also poured money into Scott Brown’s Massachusetts Senate race, but failed to defeat Elizabeth Warren, a Wall Street foe who helped create the Consumer Financial Protection Bureau. Wall Street is increasingly looking small. It was unable to win a battle against a man many on Wall Street came to see as an enemy. Who is afraid of Wall Street? The place has lost its deterrent threat.

Add new comment

Sign Up

Article Tabs

carbon emissions, Pakistan coal plants, Pakistan coal generation, Pakistan energy policy

On its projected track, Pakistan will generate a total capacity of over 23,000 megawatts of electricity from coal in the next few years to overcome its steep energy requirements.

student loans, student debt, college debt, Student Loan Asset Backed Securities, subprime mortgage securities, collateralized debt, Federal Family Education Loan Program, Student Income Loans, Student Income Loans

A crucial difference between the subprime debt bubble and the student debt bubble is that the properties that comprised subprime mortgage securities served as collateral to the mortgage debt.

DiEM25, austerity policies, Brexit, Lexit, Democracy in Europe Movement, Grexit

Former Greek finance minister Yanis Varoufakis responds to his critics and lays out DiEM25’s plan for resisting within the European Union.

Five Star Movement, Beppe Grillo, anti-corruption movement, populist politics, Euro-skeptic party, Italian political corruption, Silvio Berlusconi, Virginia Raggi, Chiara Appendino

The transparency and political openness that helped the 5 Star Movement rise to power must now bring the party's current and future proposals to the forefront if it hopes to achieve any lasting change.

Occupy Wall Street, rising inequality, park occupations, financialization, debt, David Graeber, Occupy legacy, social protests, economic justice, Jeremy Corbyn

Five years after Occupy, organizer and anthropologist David Graeber speaks to ROAR about the power of finance, the history of inequality and the legacy of the movement.

Wells Fargo crimes, Wells Fargo accounts scam, Wells Fargo foreclosures, mortgage-backed securities, subprime loans, Wall Street crimes, John Stumpf

Despite all of the fines paid to the Consumer Financial Protection Bureau, Wells Fargo continues to deny any allegations of wrongdoing. Now a former employee is disputing that claim.

Posted 5 days 14 hours ago
occupy, activism, creative activism, alt-right, white supremacy, neo-nazi, bigotry, racism, sexism, white nationalism, white genocide, Milo Yiannopoulos, Richard Bertrand Spencer, Gabriella Coleman, hacktivism, Anonymous, hacker, whistleblower, digital ac

We're introducing a new segment for all those times you think to yourself, "Wow, that's fucked up." First topic: white supremacists.

Posted 4 days 20 hours ago
blockchain currencies, blockchain technologies, crypto currencies, Bitcoin, Federal Reserve, Bank of England, fractional reserve lending, Central Bank Digital Currency, bank bailouts, bail-ins

Central Bank Digital Currencies could supplant the money now created by private banks.

Posted 6 days 16 hours ago
carbon emissions, Pakistan coal plants, Pakistan coal generation, Pakistan energy policy

On its projected track, Pakistan will generate a total capacity of over 23,000 megawatts of electricity from coal in the next few years to overcome its steep energy requirements.

Posted 2 days 20 hours ago
student loans, student debt, college debt, Student Loan Asset Backed Securities, subprime mortgage securities, collateralized debt, Federal Family Education Loan Program, Student Income Loans, Student Income Loans

A crucial difference between the subprime debt bubble and the student debt bubble is that the properties that comprised subprime mortgage securities served as collateral to the mortgage debt.

Posted 2 days 20 hours ago
Wells Fargo crimes, Wells Fargo accounts scam, Wells Fargo foreclosures, mortgage-backed securities, subprime loans, Wall Street crimes, John Stumpf

Despite all of the fines paid to the Consumer Financial Protection Bureau, Wells Fargo continues to deny any allegations of wrongdoing. Now a former employee is disputing that claim.

student loans, student debt, college debt, Student Loan Asset Backed Securities, subprime mortgage securities, collateralized debt, Federal Family Education Loan Program, Student Income Loans, Student Income Loans

A crucial difference between the subprime debt bubble and the student debt bubble is that the properties that comprised subprime mortgage securities served as collateral to the mortgage debt.

National Health Service, NHS, NHS cuts, austerity cuts, U.K. austerity policies, Patients Association, Stepping Hill Hospital, Stockport NHS Watch

Stepping Hill Hospital is operating under intense financial pressure – but is still saving lives – as the U.K. government continues to make billions of pounds’ worth of cuts to Britain’s NHS.

AFL-CIO, union organizing, Keystone XL pipeline, jobs versus environment, Dakota Access Pipeline, Standing Rock Sioux tribe, Standing Rock protests, Communications Workers of America, National Nurses United

In sharp contrast to Richard Trumka and the AFL-CIO, some unions really want to restrain climate change and are now vocally opposing the Dakota Access Pipeline.

DiEM25, austerity policies, Brexit, Lexit, Democracy in Europe Movement, Grexit

Former Greek finance minister Yanis Varoufakis responds to his critics and lays out DiEM25’s plan for resisting within the European Union.