Wall Street Bets On The Democrats

According to the Center for Responsive Politics, even the financial industry has had it with the Republican Party. Bloomberg has the story, via The Politicker. As one financial industry heavyweight puts it in the article, "[w]hen the party with no power can raise more money than the party with all the power, it means people are pretty disturbed about the country's condition."

Democrats got $13.6 million, or 52 percent of the financial industry's $26.3 million in political donations in 2005, said the Center for Responsive Politics, a nonpartisan Washington group that researches the influence of money on elections and public policy. In the two years leading up to the 2004 presidential election, Republicans received 52 percent of the $91.6 million given by the industry.

"Wall Street wants change" on issues such as the Iraq war and the budget deficit, said James Torrey, chairman of the Torrey Funds, which manages about $1 billion. "I'm finding people who are registered Republicans who are saying to me, 'what can I do to help?' "

The securities and investment industry is among the biggest sources of campaign cash in U.S. politics. The industry's 2004 contribution total to candidates and parties was higher than any group except lawyers, health professionals and the real estate industry, according to the center, which studied Federal Election Commission records.

I can't say I'm 100% thrilled with this development, though. For one thing, it's not as if the financial industry has been a force for progressive change in America. To say that their money is less than clean would be a vast understatement. And it's also not as if the majority of this money is going to the Paul Wellstones of the Democratic Party. According to the article, "the two most successful fund-raisers in 2005 on Wall Street" were Joe Lieberman and Hillary Clinton.

That said, it's always a good thing to see the Republicans lose a key constituency. And this also seems to be something of a leading indicator, politically speaking. Wall Street doesn't want to be shut out of Congress next January, so these donations can be seen as a bet on the Democrats to win in November. Perhaps most importantly, this move can be read as a vote of no confidence in the weak Republican leadership -- or alternately, a vote of confidence in Democratic leadership. Led by Rove, the Republicans will be shouting from the rooftops about the disaster that will ensue if Democrats take over one or both houses of Congress, both in terms of national security and the economy. With retired Generals publicly decrying the Republicans' failures on national security and Wall Street backing the Democrats, those claims become less and less convincing.

Tags: Democrats, Money, Wall Street (all tags)

Comments

20 Comments

Correct, this is an indicator

Wall street in general funds political conservatism; they are bound to several industries and follow macro economic trend line.

They're not too interested in microeconomics or specific policies as, the investment banking community is more interested in creating markets for moving cash of all types, good, bad, green, red.

and pink.. >:)

by turnerbroadcasting 2006-04-24 11:23AM | 0 recs
Re: Wall Street Bets On The Democrats

I'm sorry, but am I missing something?  Is going from 52% Republican, 48% Democrat in the two years leading up to 2004... to 52% Democrat, 48% Republican in 2005 really that much of a development?

It may very well be.... but to my eyes it's still pretty much close enough to 50-50.
 

by wintersnowman 2006-04-24 11:46AM | 0 recs
Re: Wall Street Bets On The Democrats

Go to the underlying data: it's all distorted by the fact that two Democratic incumbent Senators whose constituents work on Wall Street -- Clinton and Lieberman -- are both up for reelection this year.  Take them out of the equation, and the Republicans are slightly ahead.

Indeed, note that among Dems, the money's going primarily to Clinton, Lieberman, Ford, Bayh, Cantwell and Nelson (FL) -- not quite the Class Warrior wing of the party.

by Adam B 2006-04-24 11:53AM | 0 recs
Re: Wall Street Bets On The Democrats

True, but who cares.  It's that much less for Republican candidates.  As someone who used to work for an investment firm in New York, this is very interesting news.  

by Eric11 2006-04-24 12:27PM | 0 recs
Re: Wall Street Bets On The Democrats

What's the logical argument for taking them out of the equation though? It's not as if either of them was just elected or switched parties. In years past, with both of them in the Senate Democratic caucus, Republicans still got the majority of donations. It's a slight shift, but it's still a shift.

by Scott Shields 2006-04-24 12:31PM | 0 recs
Re: Wall Street Bets On The Democrats

In the two years before their own re-elections, they're going to get the bulk of their funding.  All I really intended to suggest was that money given to "local" races may not be indicative of any ideological shift in the industry.  

Oddly, the 2004 gap can be entirely explained by the $4.4M more than Bush got than Kerry from the industry.  Otherwise, the top six recipients of funds in that cycle were all Dems:  Schumer,  Lieberman (includes Presidential money), Daschle, Obama, Bowles, and Dodd.  So now, I think there's even less of a story here.

But there's a wealth of data available on that site, so feel free to explore.  (For example, the size of the 1996 split -- $7M in the GOP's favor -- can mostly be explained by the fact that they had a presidential primary fight and we didn't.)

by Adam B 2006-04-24 12:58PM | 0 recs
Re: Wall Street Bets On The Democrats

She is from NY, he is from CT, it makes complete sense that they would be up on top.  I bet ya Menendez will be close to the top soon too.  

by JAmbro 2006-04-24 11:55AM | 0 recs
Not much sense, actually

Wall Street is a national/international center of financial activity giving to Federal elected officials.

Why should hometown boys or girls get preferential treatment?

(On the general point, I don't think the null hypothesis has exactly been blasted into a thousand pieces here. But I'll await more expert analysis...)

by skeptic06 2006-04-24 12:51PM | 0 recs
Re: Not much sense, actually

I'm not going to argue about whether they should give preferential treatment to hometown folks, but the fact is, they do.  The top recipient of Senate funds every year is a New Yorker, including Rick Lazio in 2000.  Otherwise, it's been mostly Schumer, with some Hillary, some D'Amato, etc.  In 1992, the top three were Bob Abrams, Liz Holtzman and Al D'Amato.

Remember: this includes employee gifts as well as corporate PACs.  Most people give where they live, and based on issues that can extend beyond What's Best For The Job.

by Adam B 2006-04-24 01:58PM | 0 recs
Re: Not much sense, actually

Point taken.

The sense has been duly demonstrated!

by skeptic06 2006-04-24 03:03PM | 0 recs
Re: Wall Street Bets On The Democrats

"I'm finding people who are registered Republicans who are saying to me, 'what can I do to help?' "

Vote Democrat - duh

by jesusquintana 2006-04-24 01:10PM | 0 recs
Shades of 1992

In 1992 the trend was even sharper in favor of the Democrats.  I remember it being explained as the result of the economy:  GOP policies had so impoverished GOP contributors that they had less to contribute to continuing failure.  

In this case, however, I think the money may be seeking a continuation of the pro-business status quo, regardless of any change in the party in power.  I would say that this reminds me of what happened the following year, in 1993, except the change there was in the executive, not the legislative, and the Democrats in Congress misjudged the moment, and lost their ass in 1994.  

Wall Street, so to speak, is hoping to keep Congress as a barrier between their purchased privileges and an increasingly angry American people.  The sooner the elites can negotiate a new consensus, the less will change.  
.

by Grand Moff Texan 2006-04-24 01:42PM | 0 recs
Re: Wall Street Bets On The Democrats

I've heard of studies that showed the economy and corporations have generally fared better under Dems--especially Clinton.

I wonder if the Dems can make hay out of this by stressing the need for a balanced budget and stabilzing foreign policy to really tap US economic potential?

Taken further, there are a lot of issues, like Homeland Security, the Environment, alternative power and health care that are going to require a government-industry partnerships that the GOP has no stomach for.

Can the Dems generate excitement in the business communities by stressing the need for government to work with industry to solve the nation's biggest problems...instead of Bush's laissez-faire that doesn't really produce any results beyond tax dodges?

I know it sounds DLC, but I really think there's potential here.

They need to get some famous  Dem business people to put together a report on challenges, etc., and develop a policy from that.

by Bush Bites 2006-04-24 02:34PM | 0 recs
It's not just Wall Street. Other big donors too

In the VA-05 something similar is happening, and it's crucial to funding a Democratic victory. You see, southside Virginia runs on agriculture and pre-globalization jobs. The farmers occupy most of the land, but most of the capital is held by a few families who pretty much own everything. In some mill-towns, one company (family) employs most of the workers, and in most of southside, just a few old-money types own all the malls, movie theatres, and hotels.

These folks don't necessarily want to buy politicians, they just want good government that protects the economy where they do business, and they don't particularly like that their donations to Virgil "MZM-Scandal" Goode now reflect poorly on them as well. Moreover, these are the folks who give a bit to both sides, and recently they've been hedging their bets on the incumbent and they're making nice for whoever his replacement will be, even if he's not replaced until 2008. Another factor pursuading them to nudge Al Weed along a bit more: They know that even if Virgil gets elected, if Democrats retake the house, they'll remember how he flipped to the Elephant party for a spot on appropriations, they'll bury him on committee appointments, and he won't be able to do a damn thing for southside Virginia anymore.

We don't get a lot of national attention down here -- although I don't really know why; this race is a perfect test-case for everything the blogosphere's vast knowledge base can do to put progressive Democrats in office even in rural districts -- so even the large-dollar donations are mostly in-district. This measurement comes by way of Wall Street, but you can bet business-owners and diversified investors everywhere are doing the same all throughout the country.

P.S. Now that I think of it: maybe money doesn't corrupt so much as long as it's diversified -- what's good for the country is then good for the investor, right? Still corrupts, just not so much, eh?

by msnook 2006-04-24 10:02PM | 0 recs
In defense of Wall Street and Clinton(s)

1. Wall Street has been slowly drifting our way for some time.

2. This is a legacy (deserved) of Bill Clinton.

3. Democrats are good for the economy.

4. Wall Street performs about 40-50% better under Democrats.

5. The GOP supports old money, old economy.

6. The oil shock is the wake up call that the old economy is down for the count and is not coming back.

7. It's a consumer service economy these days.  Dems want to give consumers more money.  More money buys more services.

8. The internet + progressives = good.  The internet + conservatives = police state.

9. Police states aren't good for big business.

The business of America is business.  And if business thinks the Democrats are a better choice, so be it.  

Just make sure to kick Wall Street in the ass everyday with a useful tip, like: "If workers make more money, you will make more money, too."

by jcjcjc 2006-04-25 03:48AM | 0 recs
PS

And if Mexicans make more money...

If black folks make more money...

If gays make more money...

If gun-toting redneck hate-mongers make more money...

Progressive politics is just good business.  Doing the right thing can't be bad.

by jcjcjc 2006-04-25 03:51AM | 0 recs
Re: Wall Street Bets On The Democrats

Wall Street supported Clinton twice.

Best it ever did was with a D president and R Congress

by Don Surber 2006-04-25 04:54AM | 0 recs
Re: Wall Street Bets On The Democrats

I'm skeptical about the significance of this, but:

Is there any value to noting that Democrats have only 45% of the Senate seats, and about 35% of the House -- so 52% of dollars going to Democrats is actually a disproportionately large amount?

by mesquite 2006-04-25 11:53AM | 0 recs
Re: Wall Street Bets On The Democrats

This is just putting there eggs in more than one basket, since Bush is week.

by Dameocrat 2006-04-25 02:55PM | 0 recs
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