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October 20, 2014

On Eve of Midterm Elections, Public Incorrectly Sees Both Parties Equally Close to Wall Street

By Alex Formuzis, Communications Director

According to a new national survey, 51 percent of likely voters believe both Republicans and Democrats in Washington, D.C. are equally cozy with Wall Street. The poll, commissioned by Politico and conducted between October 3-October 11, finds that of the remaining likely voters, 39 percent think Republicans are closer to Wall Street compared to just 9 percent who believe Democrats are friendlier with the financial industry.  

This is regrettably similar to results Better Markets found in a poll it commissioned earlier this year, which found the American people thought Washington and Wall Street was in cahoots. 

Talk about a failure to communicate!  While both parties take too much money from Wall Street and spend way too much time worrying about its interests, President Obama and Congressional Democrats fought against a near-unified Republican party to pass financial reform to protect the American people from another devastating financial crash.  It passed the Senate and House  with only three Republican votes in each chamber.

That is presumably why the Wall Street Journal reported today that Goldman Sachs is now the biggest financial Wall Street backer of Republicans.  That wasn’t always true: before President Obama and the Democrats passed financial reform, Goldman gave most of its contributions to Democrats.  Now, as the article is entitled “Goldman Goes Republican.  That’s important because, as the article states, “And who Goldman backs matters. Its employees have long been the biggest source of political money on Wall Street.”

We’re not saying the financial reform law was perfect.  It wasn’t and we advocated for much stronger provisions, but it nonetheless is pretty strong and got to most of the key issues.  More importantly, if regulators and prosecutors implement the law to its full extent, it’ll help protect the American people from another crash and yet more taxpayer-funded Wall Street bailouts.  However, even that has been difficult because Wall Street, its political allies and innumerable purchased mouthpieces continue to fight to prevent it from being implemented, while blaming the law for almost every ill imaginable.

But, this issue isn’t just about polls or credit for legislative accomplishments.  When more than half of the public think both parties are equally chummy with Wall Street, voters are rightly going to think no one in Washington is fighting for them, for Main Street and focusing on the real economy.

True, Wall Street and the big banks have spread their campaign contributions widely across both parties for years.  And, some of the biggest names on Wall Street have held top political jobs in the administrations of Bill Clinton, George W. Bush and Barack Obama. However, people should not forget that, by and large, Republicans fought relentlessly to prevent the passage of the Dodd-Frank financial reform law in the wake of the 2008 crash, and have worked to kill or water down large portions of the landmark law since it was passed in 2010.

Last summer, for example, the chairman of the House Financial Services Committee, Rep. Jeb Hensarling (R-TX) delivered remarks at an event sponsored by the Cato Institute and the Mercatus Center, at which he said: We can never, ever accept a Dodd-Frank world, nor should we.”  It’s not necessarily a surprise that Mr. Hensarling has hauled in more than $3 million in campaign contributions from the financial services industry since 2010.

Earlier this year, Americans for Financial Reform released a report revealing not just how much cash Wall Street and the big banks have spent lobbying against the financial reform law, but also where their campaign contributions have gone.  According to the AFR’s report, of the $202,992,995 contributed by PACs and individuals (in 2013 and 2014) associated with finance, 62% went to Republican candidates and 38% went to Democrats.”

To be fair, there are some Republicans who have worked for financial reform as well so that what happened in 2008 does not occur again. For example, Sen. Sherrod Brown (D-OH) is working with Sen. David Vitter (R-LA) through legislation to put an end to “too-big-to-fail” banks and prevent future taxpayer bailouts. While Sen. John McCain (R-Ariz.) partnered with Sen. Elizabeth Warren (D-Mass.) to introduce the “21st Century Glass Steagall Act”,

And, while only 6 Republicans voted for passage of the financial reform law in 2010, some prominent Republicans supported some very strong provisions, some of which were so strong that Wall Street killed them before they could even get into the law. For example, Sen. Richard Shelby (R-AL) voted for the Brown-Kaufman amendment to limit the size of the biggest banks, but unfortunately it failed to pass.

The 2008 financial crash was the worst since 1929 and it caused the worst economy in the US since the Great Depression of the 1930s.  Millions of Americans are still struggling to dig themselves out of the hole they were put in largely by the reckless trading and gambling by Wall Street’s too-big-to-fail banks.  From lost wages and savings, to millions of Americans still un-or-underemployed, to roughly 20 percent of homes that remain under water, the devastating effects of the 2008 financial crash remain far too real for tens of millions of Americans.

It’s unfortunate that too many fail to see who fought – and continue to fight — Wall Street to prevent that from happening again. 

 
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