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

The head-shaving by more than 40 protesters this week signals the Occupy Central's determination to oppose China's continued support for indirect elections to appoint Hong Kong’s chief executive.

Any statement that mass surveillance is not performed in New Zealand is categorically false. If you live in there, you're being watched.

The Arroyo Sustainable Economies Organization has release a bold blueprint to turn notoriously unequal and sprawling Los Angeles into a community-oriented, resource-sharing city for all.

Shifting toward community-based renewable power is a strong thread running through Scotland's Radical Independence Campaign, and a free Scotland could inspire other countries to relinquish their fossil fuel addiction.

If the people at the UN are not ready to take action, they should move to the side, because the people will.

If you want to fully understand the game at play in the bankruptcies and privatization of public assets in Detroit, Argentina, and Europe, play Monopoly.

Posted 5 days 14 hours ago

Britain’s political system is broken to the point where many people in Northern England actually want to join Scotland to escape austerity measures.

Posted 4 days 13 hours ago

SeaChange: We All Live Downstream is a two-week journey by boat that's raising awareness and generating community activism around climate issues before people hit the streets in Manhattan.

Posted 6 days 15 hours ago

Senate Joint Resolution 19 calls for a constitutional amendment to overturn the Supreme Court Decision that opened the floodgates for corporate spending to influence political elections.

Posted 6 days 15 hours ago

In addition to speaking with a common voice on climate justice and the policies needed to achieve it, today's "movement of movements" needs to reach beyond environmentalists.

Posted 4 days 13 hours ago

The power of truth-tellers like Edward Snowden is that they dispel a whole mythology carefully constructed by the corporate cinema, the corporate academy and the corporate media.

Climate change has already cut into the global food supply and is fueling wars and natural disasters, and governments are unprepared to protect populations.

The fear of continued violence is again on Egyptians' minds after numerous reports of Muslim Brotherhood violence occurred in recent days following the country’s “second revolution” that ousted President Mohamed Morsi.

Global Revolution In Europe

“This spontaneous and popular movement is not swayed by any political organization, but is propelled by and is a response to the national and collective urge from our hearts.

Opinion: How to succeed in reoccupation without really trying

I’ve lately been getting the feeling that Occupy Wall Street’s past successes are starting to go to the heads of some people in the movement.

Sign Up