Obama pushes myth that fat cats favor the GOP
By: Timothy P. Carney
Senior Examiner Columnist
October 22, 2010
(photos.com)

Lobbyists, special interests, and Wall Street fat cats are spending wildly to elect Republicans this election -- maybe even as much as they are spending to elect Democrats.

Obama claims on the campaign trail that Republicans plan "to put special interests back in the driver's seat," and points as evidence to industry spending on the GOP's behalf.

As is typically the case when it comes to special interests, the facts don't square with Obama's rhetoric.

Begin with the gross numbers. The latest campaign finance figures collected by the Center for Responsive Politics show that most of the top industries -- including the ones Obama constantly demonizes -- have given more money to Democrats than to Republicans.

Lawyers and law firms have given more in direct contributions than any other industry this election, topping $100 million according to the CRP's latest figures. As usual, the industry has favored Democrats -- this cycle by a three-to-one margin.

Health professionals are the No. 2 donor, and they have split their contributions evenly between the parties, with Charlie Crist, independent Fla., easily the top recipient.

Wall Street, which supposedly owns the GOP, has actually invested more in Democratic candidates. According to data at CRP, 54 percent of Wall Street contributions have gone to Democrats this election, including 57 percent of the industry's PAC money. These numbers don't include third-quarter contributions, which likely cut into the Democrats' lead for the cycle -- notwithstanding $2,000 from Bank of America's CEO to House Financial Services Committee Chairman Barney Frank, D-Mass.

You wouldn't know Wall Street was favoring Democrats from reading the media's coverage of campaign spending. And they say the media has no liberal bias. Either because of laziness or bias, reporters tend to make the facts fit a traditional -- and morally satisfying -- narrative.

For instance, the Washington Post in February published an article about Wall Street giving to congressional campaigns. This Post piece ran when numbers had just come in for 2009, and Democrats had pocketed 65 percent of Wall Street cash that year, the most one-sided year on record. But in the fourth quarter, Democrats had only barely outraised the GOP from the industry, so the Post ran the headline: "Wall Street shifting political contributions to Republicans."

To put a finer point on it, check out the giving of the PAC for the Securities Industry and Financial Markets Association, which is the largest and most powerful Wall Street lobby, representing the likes of Bank of America, Citigroup, and Goldman Sachs: $192,000 to Democratic candidates and PACs, and $160,830 to Republican candidates and PACs, through mid-October.

While SIFMA's PAC has favored Republican Senate candidates this cycle over their Democratic counterparts, the lobby has favored House Democrats even in this year's third quarter -- after the financial regulation bill, and after a GOP House majority became more likely than not.

And this past week, Obama nominated SIFMA Chairman Thomas Nides, chief operating officer of Morgan Stanley and an Obama donor, to a top spot at the State Department.

Looking more broadly at K Street's campaign spending, the Obama narrative also falls apart. Lobbyists have favored Democrats 65 percent to 34 percent this cycle. Harry Reid, with more than half-a-million from lobbyists, is the industry's favorite lawmaker, and the top five recipients of lobbyist cash are Democrats.

Speaking of Reid, don't forget the drug industry. According to CRP, drug company employees, executives, and PACs have given 54 percent of their contributions to Democrats, and the drug lobby has shelled out millions in independent expenditures to help Democrats who voted for the Pharma-friendly health care bill. The main lobby group, Pharmaceutical Researchers and Manufacturers of America, has given about 70 percent of its money to Democrats, including 62 percent last quarter.

Democrats have attacked expenditures by groups sympathetic to the GOP, particularly the U.S. Chamber of Commerce, which has spent tens of millions on ad buys, about 90 percent of which support Republicans. But the Wall Street Journal reported last week that the chamber is being outspent by the American Federation of State, County, and Municipal Employees, which only backs Democrats.

It's not a simple picture. As of now, outside spending favors Republicans, while the official Democratic committees are outspending the GOP committees. When all campaign spending is counted after November, Republicans may end up getting more from Wall Street. Commercial banks and Goldman Sachs are already favoring the GOP with their donations.

The upshot on big money this election: Both sides are getting plenty, in about equal measure. Who's getting more? It depends on how you count.

This much is clear, though: Obama is no knight in shining armor fighting the monied interests.

Wall Street's Fat Cats Are Still In Charge
Most Americans now know that Wall Street bankers are so greedy as to never be trusted, and I suppose it is a sign of progress that our president now seems to grasp the obvious. How depressing, though, that a man who was elected as a consequence of one of the boldest grass-roots populist campaigns in this nation's history should now feel obligated to offer the disclaimer that "I did not run for office to be helping out a bunch of fat cat bankers on Wall Street."

But whatever his intentions, Barack Obama has in fact accomplished just that, to the immense anger of the public that elected him. Thus, it is understandable that, in his "60 Minutes" interview last Sunday, Obama lashed out at the ingrate bankers whose greed he had served but who have failed to seriously increase lending or forestall foreclosures and instead shamelessly pocketed the cash the government threw their way:

"They're still puzzled why is it that people are mad at the banks. Well, let's see," he said. "You guys are drawing down $10 [million], $20 million bonuses after America went through the worst economic year that it's gone through in--in decades, and you guys caused the problem. And we've got 10 percent unemployment."

But what did the president expect from those guys after he and his Republican predecessor were so quick to reward them so handsomely for their failures? In a reversal of the guiding principles of the meritocracy that informed Obama's own success story, the president promoted, rather than flunked, the people who got it all wrong.

One of those was Larry Summers, who as Bill Clinton's treasury secretary pushed through the radical deregulation that enabled disastrous Wall Street greed. But although Summers pocketed a cool $15 million from Wall Street in 2008 as he was advising Obama the candidate, he seems at last to have gained some awareness that the rules of the game he helped write now need to be changed. Speaking of the very bankers who once so handsomely paid him for his services, Summers, now Obama's top economic adviser, told CNN: "Here is what I think they don't get. ... It was their irresponsible risk-taking in many cases that brought the economy to collapse."

Summers is upset that the banking bandits he once so slavishly adored are now opposing even the tepid legislative reforms that the administration supports. The banking lobby is in full-frontal assault mode on efforts of Senate Democrats, led by Chris Dodd, to establish a single bank regulator who might actually bring the industry to heel.

The largest of the banks--the very ones that led the charge into the financial abyss--are fiercely lobbying against the very sensible and all-too-limited proposals that would increase their capital requirements and empower the government to prevent them from growing to unmanageable proportions once again. They are even more incensed about attempts to regulate the rewards that bankers reap from risking the capital of their depositors and the taxpayers who ultimately foot the bill.

However, Obama's stern rhetoric apparently did not move the top banking honchos who failed to show up for this week's White House meeting with the president. The heads of Goldman Sachs and Morgan Stanley waited until the morning of the Monday meeting to catch a plane and then claimed that fog prevented their journey.

Citigroup Chief Executive Vikram S. Pandit couldn't make the meeting with the president who had saved his corporation from bankruptcy because he was too busy lining up new private financing to allow Citigroup to escape the bonus confines and other limits stipulated by the government bailout program.

No bank bears greater responsibility for the economic debacle that has caused such worldwide suffering than Citigroup, whose immense growth was made possible by legislation that Summers and his then-mentor, Clinton Treasury Secretary Robert Rubin, successfully promoted in the late 1990s. Rubin was rewarded for his efforts with a top job at Citigroup, which was formed from one of the largest mergers in history and which paid him $120 million before its fortunes plummeted. The bank is by no means out of the swamp of its own creation, as it still holds a huge portfolio of toxic assets, is still sustained by substantial public assistance and was trading Tuesday at less than $4 a share--a tiny fraction of its value before Rubin led it astray.

It was Rubin, as an Obama adviser, who pushed for Pandit's selection as head of Citigroup. Perhaps Obama could enlist Rubin's aid in getting Pandit to accept the president's invitations to the White House. But of course there is no expectation of getting Rubin and Pandit to pay back the bankrupted homeowners they swindled.

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