Posted on 06/11/2011 1:12:13 PM PDT by neverdem
Do Republican leaders in Congress answer to Tea Party activists or to Wall Street? That question will be answered in the next few weeks as the debt-ceiling fight comes to a head. The choice that GOP leaders make will influence more than fiscal policy or the financial markets; it will also shape the 2012 election and reveal the true identity of today's Republican Party.
Wall Street has been urging Republicans to approve more government borrowing for months, arguing that it is too risky to use the debt-ceiling cap as a hostage in the budget battle. That message was delivered during a series of meetings in April between GOP leaders and top Wall Street executives and has been repeated often by the finance sector's ubiquitous lobbyists on Capitol Hill. As Rep. Michael Grimm, a Republican from Staten Island told The Wall Street Journal: "Wall Street understands that if we default on our obligations, our markets are going to crash. ... They're doing their job and talking to a lot of members."
So far, these pleas for prudence haven't gotten much traction. This isn't surprising. Wall Street and the Republican Party have long been drifting apart, and the GOP has been leaning more and more toward the Tea Party, which demands that the debt ceiling not be raised without drastic reductions to government spending.
Tea Party supporters have turned this issue into a fealty test, threatening to mount primary challenges against Speaker John Boehner and other top House Republicans if they vote to raise the debt ceiling without huge budget cuts. William Temple, chair of the Tea Party Founding Fathers, has said that his group will grade Republican members of Congress on only one issue this year: their position on the debt ceiling.
Disagreement over the debt ceiling is yet more evidence that Wall Street and the Republican Party increasingly inhabit separate worlds. Over the past 15 years, the Republican Party has become ever more dependent on downscale voters from rural and small-town America, as well as more beholden to the religious right. In contrast, the financial industry - which is largely based in the most cosmopolitan parts of blue America - has become a more complex and global business that is increasingly dominated by highly educated leaders with postgraduate degrees from elite universities.
While John Boehner grew up working in his father's bar and got a B.A. at Xavier University in Cincinnati, Jamie Dimon of JPMorgan grew up as a broker's son on Park Avenue before earning degrees from Tufts and Harvard Business School. The two top Republicans on the House Financial Services Committee - Spencer Bachus and Randy Neugebauer - were small-business men in the South before going into politics. Wall Street's top hedge-fund managers, meanwhile, include a number of PhDs such as former math professor James Simons and the computer scientist David Shaw.
To be sure, there are plenty of hardcore conservatives on Wall Street. But most in the finance world are more pragmatic than ideological. Many Wall Street leaders saw tax increases as inevitable as the Bush presidency came to a close, and didn't have a problem with Obama's proposal to raise rates on the wealthy. Bankers also believe that government has an important role to play in managing the economy and making investments in education, science, infrastructure, and other areas.
Once upon a time, the Republican Party took a pragmatic view of taxes - Reagan rolled back 40 percent of his tax cuts - and saw a role for government. But those days are long gone. And the ideological rigidity of today's GOP is unnerving to Wall Streeters who view the world as inherently complex.
In turn, with anti-elite populism surging in conservative states, Republicans see major risks in getting too close to Wall Street - even as the party quietly does the Street's bidding on a host of regulatory issues. Many of the Republicans who backed the Troubled Asset Relief Program have now spent three years abjectly apologizing for their vote or were ousted by primary challenges from the right.
The first two years of the Obama administration did help bring Wall Street and the Republicans closer together again. But according to campaign records, there has not actually been a seismic shift of Wall Street money to the GOP. Democrats only narrowly raised less money than Republicans from the securities and investment sector in the 2010 election cycle.
If Republicans go to the brink or beyond on the debt ceiling, they will likely lose whatever ground they have regained with Wall Street amid an anti-Obama backlash. This could have big implications for fundraising in the 2012 election. After the legal profession, no industry gives more in political donations than financial services. The GOP's disadvantage here hurt the party not just in 2008 but also in 2006 when the Democrats regained the Congress.
By taking an absolutist stance on the debt ceiling, the GOP is handing the advantage back to Democratic Party fundraisers. Wall Street may not be a haven of liberalism. But it is more likely to back a Democratic Party that wants to raise taxes on the rich and impose new regulations than to support Republicans who are crazy enough up to blow up the economy on principle.
Fanniegate: Gamechanger For The GOP?
The Republican Party and especially its Tea Party wing have just acquired a new weapon of mass destruction — and it has nothing to do with any of Congressman Wiener’s rogue body parts. If they deploy this weapon effectively in the next election cycle — a big if — then they have the biggest opportunity to move the country rightward since Ronald Reagan took the oath of office back in 1981.The Tea Party WMD stockpile is currently stored in book form: Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon. By Gretchen Morgenson, one of America’s best business journalists who is currently at The New York Times, and noted financial analyst Joshua Rosner, Reckless Endangerment gives the best available account of how the growing chaos in the mortgage and personal finance markets and the rampant bundling of dubious loans into exotically toxic securities plunged the world, and millions of American families, into the gravest financial crisis since World War Two. It is gripping reading as well, and its explanations are clear enough that readers without any background in finance will have no trouble following the plot. The villains? An unholy alliance between Wall Street, the Democratic establishment, community organizing groups like ACORN and La Raza, and politicians like Barney Frank, Nancy Pelosi and Henry Cisneros. (Frank got a cushy job for a lover, Pelosi got a job and layoff protection for a son, Cisneros apparently got a license to mint money bilking Mexican-Americans of their life savings in cheesy housing developments.)
Top obama Donors 2008 cycle:
University of California $1,591,395
Goldman Sachs $994,795
Harvard University $854,747
Microsoft Corp $833,617
Google Inc $803,436
Citigroup Inc $701,290
JPMorgan Chase & Co $695,132
Time Warner $590,084
Sidley Austin LLP $588,598
Stanford University $586,557
National Amusements Inc $551,683
UBS AG $543,219
Wilmerhale Llp $542,618
Skadden, Arps et al $530,839
IBM Corp $528,822
Columbia University $528,302
Morgan Stanley $514,881
General Electric $499,130
US Government $494,820
Latham & Watkins $493,835
No Unions?
Unions do soft money...
Only the cheats, liars and thieves on Wall St. are complaining.
Who are they calling the US Government?
Elite- a superior group.
US Government $494,820
Good question.
Republicans were never inline with Walstreet. President Bush never did anything for Walstreet bankers. He was an example that the Teaprty needs to lead them. President Bush please come back!
Has that ever been a question? Despite the media packaging of the GOP as the party of "the rich", Wall Street has for decades been pro-Democrat. Big business needs big government to protect it from the more responsive small companies that constitute a real threat. The GOP is and ought to remain the party of ordinary working Americans, including small business.
Screw Wall Street. They made their bed with the RATs they do not deserve our consideration. Save our worries for small business and our grandchildren.
Most likely they are individual donations from US government workers.
Well, Boehner is sidetracking and slow-walking Tea Party-mandated attempts to defund, then repeal, ObamaCare.
Howell Raines, former editor of The New York Times, wrote an October 2008 article in Conde Nast Portfolio that the RNC and business think-tank heavies had thrown in with the Democrats on a major political deal to give the Dems a national single-payer healthcare "system", which will resemble the Soviet system when it's done. They're going to make the expense go away, by making the patients go away. (If you're rich, you can go to Grand Cayman or Singapore to see a competent doctor.)
Wall Street demands that employee health care be flushed. That's all there is to it. Done deal, game over.
Now Boehner's job is not to rock the boat, while slipping the responsibility as much as possible for refusing to rock the RiNO-ObamaCare boat. He's putting us all on, and fronting us off.
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