This Is the Worst Election for Wall Street in Decades

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.

Article Tabs

An emerging relationship between the state and a commons-based civil society is starting to challenge the narrow thinking of the U.K.’s main political parties

Only by pooling resources do voters stand a chance – and in cities, towns and rural districts across America, grassroots community groups are already fighting to ensure that their voices are heard.

TPP Investment Chapter, corporate trade deals, corporate trade agreements, Julian Assange, investor-state dispute settlement, ISDS, fast track authority, fast track legislation, Transatlantic Trade and Investment Partnership, TTIP, TPP, Trans-Pacific Part

The classified document, which was supposed to be kept secret for four years, highlights the creation of a supra-national court where foreign firms can "sue" states and obtain taxpayer compensation for "expected future profits."

Community Environmental Legal Defense Fund, community bill of rights, Mothers Against Drilling in Our Neighborhoods

Across the country, battles are raging as communities attempt to protect the air, soil and water within their borders and the safety of their residents.

prison divestment campaign, criminal justice reform, Columbia Prison Divest, Corrections Corporation of America, GEO Group, Dream Defenders, incarceration rates, Student Alliance for Prison Reform

Columbia Prison Divest pressured the university to dump $8 million in Corrections Corporation of America, the country’s largest private prison company, as well as shares in other behemoths of the private security industry.

Until the federal government gets serious about bailing out America’s students and instituting free, public higher education for all who apply, America’s student debtors should refuse to make any further payments.

Posted 6 days 13 hours ago

Indigenous women make up 4.3% of Canada's female population – but represent almost half of the number of women murdered in the country.

Posted 4 days 4 hours ago

In this week’s episode of Act Out!, Eleanor talks clowns, burning cars and the riots against austerity in Europe, while looking at the role of art in activism and giving you some tools to get started.

Posted 5 days 12 hours ago
money in politics, Citizens United, Edward Snowden, kleptocracy, surveillance programs, NSA, whistleblowers

Welcome to 1% Elections, the privatization of the State, a fourth branch of government, and the demobilization of "We the People."

Posted 6 days 12 hours ago
water wars, California drought, water barons, Western Growers, California breadbasket, Primary Water Institute, underground water reserves, underground water regulations, primary water

It’s no longer just the farmers against the ranchers or the urbanites – it’s the people against the new “water barons” like Goldman Sachs, JPMorgan Chase, Monsanto and the Bush family, who are buying up global water at unprecedented pace.

A report that Rahm Emanuel’s administration invested money from the city teachers’ union in private equity funds run by some of the mayor’s biggest campaign donors is adding fuel to the charges that he neglects all but his wealthy backers.

Katharine Jefferts Schori, climate deniers, climate denial, Pope Francis, Bill and Melinda Gates Foundation, fossil fuel divestments divestment movement

Katharine Jefferts Schori, one of the most powerful women in Christianity, says those who reject the underlying science of climate change are turning their backs on God’s gift of knowledge.

Until the federal government gets serious about bailing out America’s students and instituting free, public higher education for all who apply, America’s student debtors should refuse to make any further payments.

Barnesville, Gulfport Energy, Environmental Protection Agency, Antero

A tiny town in eastern Ohio is being sued by an Oklahoma-based oil and gas company that bought more than 180 million gallons of water from the town last year.

Sign Up