Thursday, October 29, 2009

Ungrateful Wall Street Disses Obama Fundraiser

The Wall Street recipients of the Obama administration’s largesse are paying him back by withdrawing their fundraising presence.

The firms which received the most bailout money, including Goldman Sachs, Citigroup and J.P. Morgan Chase, will be sending less than a dozen representatives to a major Democratic fundraising event headed by President Obama in NYC. These are the same firms that raised millions of dollars for him during his presidential campaign, during which he spent a record amount estimated at $750 million. They are projected to donate less than a combined $92,000 to this affair.

Ostensibly this is because they are worried about the appearance that their donations will be seen as quid pro quo for their no-strings-attached lines of credit and direct loans. It is also an attempt to tamp down populist anger at the billion-dollar bonuses to be paid out in January 2010 for their 2009 performance, the profits from which were largely due to the backing of the full faith and credit of the United States Treasury.

But they also feel resentful and put upon by the regulatory zeal and tough talk coming out of Washington. As reported in the NY Times:

There is some failure in the finance industry to appreciate the level of public antagonism toward whatever Wall Street symbolizes,” said Orin Kramer, a partner in an investment firm who is a Democratic fund-raiser and one of the event’s chairmen. “But in order to save the capitalist system, the administration has to be responsive to the public mood, and that is a nuance which can get lost on Wall Street."

Dr. Daniel E. Fass, another chairman of the event who lives surrounded by financiers in Greenwich, Conn., said: “The investment community feels very put-upon. They feel there is no reason why they shouldn’t earn $1 million to $200 million a year, and they don’t want to be held responsible for the global financial meltdown.” Dr. Fass added, “How much that will be reflected in their support for the president remains to be seen.”

To expect a quid pro quo was understandable. The enormity of the assistance provided to the financial sector is estimated at $12.9 trillion and counting.

Now that the firms have gotten what they sought (explicit government backing for any future losses, loud proclamations that the worst is over, loss of urgency for meaningful change), Obama no longer is useful. Because the strength of the sector lies in the bets it makes for its own benefit, Wall Street has probably placed its bets elsewhere, perhaps even further to the right, awaiting the inevitable change of guard in the face of continuing American human misery.

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