Who's Wall Street's Candidate in the Presidential Race?
Last week, the suits were working hard on their booze intake at Ulysses' pub, a tony bar and oyster joint just south of Wall Street. And no wonder: Following a global panic, the Dow Jones plunged more than 400 points before settling into a 128-point mini-meltdown. The Federal Reserve may have stanched the bleeding by announcing the largest interest-rate cut in 20 years, but the smell of fear was in the air, mingling with the Guinness fumes. But while everyone else was busy drowning their sorrows, 15 Wall Street professionals gathered at a table to ask themselves a question rarely heard this far south in Manhattan: How can we help Hillary Clinton get into the White House?
The notion of stockbrokers and commodity traders phonebanking for a Democrat was so counterintuitive, so bizarre, that members of the foreign press jumped all over the event, which had been posted on Clinton's campaign website. As the small herd of Hillary supporters huddled to the thump of house music and discussed fundraisers they could nag their friends to attend, a reporter from Le Figaro scribbled furiously on his notepad. A German radio reporter stuck her microphone in every face she could, gawking as if she'd just found an exotic species of snow leopard. As a Russian television crew set up a camera and blasted lights at the table, the Clinton supporters shifted in their chairs, wondering how they had suddenly become such a spectacle. "Who the fuck knew there'd be so much media here?" said one flabbergasted woman.
After all, Hillary Clinton hasn't exactly been making nice with high finance lately. In response to the subprime meltdown, the senator recently proposed freezing all home foreclosures for 90 days, as well as locking the interest rates of adjustable-rate mortgages into place for five years. Clinton joined Barack Obama and John Edwards in demanding that the tax rates of hedge-fund and private-equity managers be more than doubled, to 35 percent. Any way you look at it, that's hardly welcome news to some of the other folks leaning against the bar.
"I'm not a big fan of socialized health care, I don't believe in big government, I'm a fan of free enterpriseso I'm a fan of Mitt Romney," said Jay Smelcer, an insurance broker who nursed his beer a few yards from the Clinton crew. In fact, the only thing he likes about Hillary Clinton is how thoroughly so many people despise her: "I'd prefer Hillary wins [the primary], because she's not as electable. But on the other hand, she spins everything so well!" Another Wall Street professional, a bullet-headed, broad-shouldered man who refused to give his name, is backing Rudy all the way and vowed to sabotage the Clinton cabal. "I've had a couple of people come up to me and say, Is this the Hillary Clinton thing?' " he joked. "I'm like, No!' "
But as strange as it may sound, the numbers don't lie: Wall Street loves Hillary. According to figures from the Center for Responsive Politics, professionals from the securities and investment industry around the nation have given the Clinton campaign more than $4.7 million, compared with $4.5 million each for Barack Obama and Rudy Giuliani. Mitt Romney, the establishment Republican candidate, has raised some $1 million less in securities and investment money than Clinton. And when you look at the New York figures alone, the comparison is even starker: According to a Bloomberg analysis of the most recent campaign-finance records, Clinton raised four times more Wall Street cash than Obama, and more than the entire Republican field combined.
According to Republican political consultant Jim Innocenzi, the financial sector's remarkable generosity is simply a case of money chasing power. Wall Street contributions simply act like a futures market; it's always smart to get on the good side of the frontrunner, no matter their politics. "I can promise you that if Mike Huckabee is the nominee, there will be people on Wall Street that will give him money," Innocenzi said. Take John McCain, for example. Seven months ago, observers were writing off his chances, and his campaign was nearly broke. But now that he's won the New Hampshire and South Carolina primaries, New York moneymen are flocking to his side. Even as Clinton's stockbrokers were schmoozing downtown, McCain was hosting a $2,300-per-head private fundraiser at the St. Regis Hotel; the event's co-chairs included private-equity giant Henry Kravis and hedge-fund bigwig Ray Dalio.
But down at Ulysses', Clinton's Wall Street volunteers said all they cared about was the direction of this country under George W. Bush. Marcus Relthford, who works in account management at the RiskMetrics Group, organized the Clinton event and walked around passing out Hillary buttons. "Here you are," he said. "Show your pride!" According to Relthford, his line of work will just have to suffer if that's what it takes to help the little guy.
"Hillary has spent a lot of time working as a senator in New York, and now as a candidate, trying to find ways to work together with the business community," Relthford said. "On the other hand, Hillary is somebody that wants to be a defender of the average American citizen. You know, when we have crises like the foreclosures, when we look at subprime mortgages, I think she feelsand I think most of us who are Democrats feelthat we have to do the things that are going to protect the average American." But Relthford admitted that Clinton's stand on taxes made her a tough sell among his colleagues. "I can tell you that most of my friends in hedge funds are not supporting the same candidate I am," he laughed sheepishly.
Rick Reynecs, another RiskMetrics account manager, sipped from a glass of beer as he watched the Russian camera team roll tape. Reynecs used to be "your classic Wall Street Republican," he said, but eight years of Bush changed his politics forever. "It was this administration's lack of leadership in world affairs" that put him over the edge, he added. "One thing I don't like is faith-based politics. I don't like George Bush justifying a decision by saying that he talked to God." Unlike his colleague Relthford, Reynecs claimed that there are a lot more folks like him down Wall Street way than people think. "I think it's a sign of things to come," he said. "I think Hillary Clinton is definitely going to get a lot of support from some more conservative circles. I'm fairly certain I'm not the only former Republican disillusioned with George Bush."
Christina, who works in statistical analysis at the Federal Reserve Bank and refused to give her last name, agreed that the financial sector was going to have to accept that under a Clinton presidency, more regulation would be inevitable. "I think that Wall Street is going to be fine," she said. "So I'm not worried about some CEO losing his job."
But what kind of regulation would there be under Clinton? After all, that's partly what Wall Street's paying all that money to help decide. According to Keith Leggett, a senior economist with the American Bankers Association, a Wall Street lobbying group, the Democratic Congress is already moving on several fronts: predatory lending in the housing market; credit-card marketing practices and fees; credit-rating agencies that gave junk-mortgage-backed securities triple-A ratings and convinced investment firms to dig their own graves. But in his own understated way, Leggett promised that the housing market had already taken care of a lot of the problems, and argued that the feds would just screw things up if they went too fast.
"When we look at these markets, they have for the large partthe subprime market, and the securitization of subprime loanslargely disappeared," Leggett said. "This gives policy-makers the ability to go forward in a prudent and thoughtful fashion, to ensure that if you are going to engage in legislation, you do it in a manner that does not create unintended consequences."
This being an election year, Congress only has until the summer to work out the legislation before its members fly back to hit the stump. Many of these issues will simply have to wait until the next president shows up for work. And assuming Clinton makes it all the way, that's when she'll show her gaggle of earnest Wall Street volunteers what she's made of. As Relthford and his new friends confabbed about the next campaign event, three foreign-born Wall Street tradersfrom London, Mexico, and Indiasucked down the suds a few feet away and doubted that anything would really change. "George Bush is on his way out, so anything else makes me happy," sniffed the Brit, who refused to give his name. "But it's interesting how much like Pakistan your politics have become. The family name is all that mattersa few more cycles and then Chelsea can run things."
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