Politics makes strange bedfellows.
Wall Street has been the subject of much ire from Democrats under the Obama administration. Dodd-Frank has thrown shackles around Wall Street’s penchant for big risk-taking; rising stars in the party like Sen. Elizabeth Warren (D-MA) are crusading to break up the nation’s biggest banks; even moderate Wall Street voices like Larry Summers – a Democrat – has been excoriated by members from his own party for being too cozy with the financial industry.
Yet, Wall Street may now represent the president’s – and nation’s –best hope in ending the current crisis that has shut down the government and thrown the nation on a path towards a calamitous default. Here’s why:
On Wednesday, President Obama summoned 19 CEOs from the nation’s largest banks to drive home a simple message: we can’t let Republicans drive the nation into default. Wall Street seemed to agree.
“There’s precedent for a government shutdown…there’s no precedent for default,” Goldman Sachs CEO Lloyd Blankfein told reporters following the meeting. “I’m not anxious to be part of the process that witnesses it.”
The hope – it would seem – is that the looming threat of economic calamity would force business leaders to ratchet up pressure on Republican leadership to broker a deal with the more moderate factions of their party. United, they might have the political heft to fend off the radical faction of Tea Party members that have, to this point, dictated the GOP strategy.
It’s a signal of a major departure from recent norms: It wasn’t too long ago that the interests of Wall Street drove the Republican party’s agenda. Yet with the rise of a grassroots funded Tea Party, that influence has severely waned.
Despite that, the business lobby still pulls significant purse strings with Republican leadership:
According to data compiled by OpenSecrets.org, Wall Street donors (those in finance, insurance, and real estate) make up the overwhelming share of contributors currently bankrolling the Republican leadership’s reelection efforts.
Case in point: Senate Minority Leader Mitch McConnell.
Wall Street donors make up the biggest share of McConnell’s 2014 reelection war chest – – which will prove a necessary asset as he faces a tense reelection effort in his home state. In sum, The group has contributed nearly $3 million to his campaign, far outpacing any other donor class.
The same can be said for virtually every major GOP leader in the House (all of whom are up for reelection in 2014): House Speaker John Boehner, House Majority Leader Eric Cantor, and the party’s whip Kevin McCarthy all rely on Wall Street as their single biggest donor group.
It’s unlikely that wealthy base will sit idly by and allow Republicans to send the nation over an economic cliff.
As they say: “money talks” – – and Republicans may be forced to listen.
Jesse Bergman