Tea Party Has Wall Street Grudgingly Married to Democrats
Will America's largest banks, hamstrung by a new regulatory era imparted by the Obama administration, be forced to taper their support of the Republican party and embrace a Democratic caucus that has been accused of vilifying the financial services industry?
If the U.S. government's credibility survives the latest bout of budget brinkmanship with a last minute deal to raise the federal debt limit, financial heavyweights such as Goldman Sachs
Such a scenario, while counterintuitive, would actually be in line with recent trends in the political largess of Wall Street's most powerful players.
The last time major financial intermediaries were staring down an abyss of total collapse -- the 2008 financial crisis -- their lobbying budgets and employee contributions tilted decidedly toward the Democratic party and presidential candidate Barack Obama, who was running on a platform that counted financial regulation as a centerpiece issue.
There was a clear rationale at the time. While Obama and his Democratic colleagues made no secret of their intent to drive regulatory stakes through the heart of Wall Street's proprietary and derivative trading desks, at least there was a hope that those lawmakers could propel the industry from the brink of collapse. The alternative, after all, was a Republican party that voted down the first iteration of then-Treasury Secretary Hank Paulson's Troubled Asset Relief Program just days after the collapse of investment bank Lehman Brothers .
As weeks dragged on between the failure of Lehman Brothers and the eventual implementation of TARP, which included the support of a only small minority of Republican legislators, many lawmakers in the party took to the House and Senate floor to advocate balancing the federal budget and letting banks fail as an alternative to the extraordinary measures eventually taken by the Treasury and the Federal Reserve .
Would a Republican ticket headlined by John McCain and Sarah Palin have the political will to get banks out of the crisis and the economy out of a free-fall? Political giving by banks and their employees indicates a decided "no" vote. Wall Street political spending went roughly 60% toward the Democratic party in the 2008 election.
The economy and banks eventually recovered and as expected, a Democratic majority took on Wall Street with strict legislation such as the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. In the 2010 mid-term and the 2012 election cycles, it is also no surprise Wall Street money moved back behind the Republican ticket, especially as a fiscally moderate ex-private equity heavyweight, Mitt Romney, headlined the party's ticket.