John Heilemann is a progressive, and thus believes that Wall Street greed and deregulation, not government mortgage policies, caused the financial crisis, Obama saved capitalism when he should perhaps have simply nationalized the entire financial industry, and those deluded bankers don’t understand the righteous anger of the workers and the peasants. It is the moderate Obama, you see, that has been standing between them and the pitchfork-waving mob.
Personally, I think all that is a crock, but Heilemann’s gossipy account of the politics of Wall Street “reform” is amusing, and I do believe that he is accurately reporting the Street’s disenchantment with the Chosen One. I’d say where those bankers were clueless was back in 2008 when they allowed image, demeanor, and style to persuade them to believe that ideas and political polarities don’t really matter.
The speed and severity of the swing from enchantment to enmity would be difficult to overstate. When Obama was sworn into office, Democrats on Wall Street rejoiced at the ascension of a president in whom they saw many qualities to admire: brains, composure, bi-partisan instincts, an aversion to class-based combat. And many Wall Street Republicansâ€”after witnessing the horror show that constituted John McCainâ€™s response to the financial crisisâ€”quietly admitted relief that the other guy had prevailed.
Today, itâ€™s hard to find anyone on Wall Street who doesnâ€™t speak of Obama as if he were an unholy hybrid of Bernie Sanders and Eldridge Cleaver. One night not long ago, over dinner with ten executives in the finance industry, I heard the president described as â€œhostile to business,â€ â€œanti-wealth,â€ and â€œanti-capitalismâ€; as a â€œredistributionist,â€ a â€œvilifier,â€ and a â€œthug.â€ A few days later, I recounted this experience to the same Wall Street CEO whoâ€™d called the Volcker Rule a testicular blow, and mentioned Iâ€™d been told that one of the most prominent megabank chiefs, who once boasted to friends of voting for Obama, now refers to him privately as a â€œChicago mob guy.â€ Do all your brethren feel this way? I asked. â€œOh, not everybodyâ€”just most of them,â€ he replied. â€œJamie [Dimon]? Lloyd [Blankfein]? They might not say Obamaâ€™s a socialist, but they come pretty close.â€ …
At Goldman and elsewhere, the belief is strong that the case against Wall Streetâ€™s most storied firm was politically motivated; lately, Blankfein has taken to trashing Obama to his friends in unusually brutal personal terms. Dimonâ€”who is fond of declaring, â€œIâ€™m a patriot!â€ in meetings with White House officialsâ€”recently described himself publicly as â€œa wavering Democrat.â€
And even those less bruised than them have found the experience traumatizing. â€œTheyâ€™re not accustomed to being engaged in politics this way,â€ says a private-equity investor. â€œTheir skin isnâ€™t toughened. They actually take [the attacks by Obama] personally. This is a profession with a lot of smart people, but who arenâ€™t necessarily terribly introspective. They think they actually deserve to make all this money. So any attack on their livelihood is, ahem, unpleasant.â€
Maybe it was inevitable that the dewy-eyed affair between Wall Street and the White House would so quickly and nastily come a cropper. For more than 30 years, the approach of every administration to the financial industry has been either laissez-faire or actively deregulatory. On the left, much blame is placed at the feet of Clinton, Rubin and his then-deputy, Summers, but in truth they were merely part of a continuum that stretched back to Jimmy Carter. Considering how close the financial system came in 2008 to Armageddon, the consensus for imposing new rules and greater order was nearly universal (among the sane, at least). Yet that does little to lessen the sense of shockâ€”of violation, reallyâ€”that Wall Street feels. …
There are those who reckon that, what with the wailing and gnashing among both the plutocrats and the populists, Obama has actually found the political sweet spot. â€œMain Street is mad at the president because heâ€™s too close to Wall Street, and Wall Street is mad at him because heâ€™s too populist,â€ Altman says. â€œTherefore, almost by definition, heâ€™s in the right place.â€
Yet the political and financial implications of the rift between Obama and Wall Street may be significant. Already, Goldman, JPMorgan, UBS, and many other financial-services firms are shifting their contributions toward the GOP. Not long ago, a big-time Obama Wall Street fund-raiser asked his go-to guy at one of the megabanks that had lavishly supported the candidate in 2008 what level of donations the president might expect from the firmâ€™s people in 2012. The answer was less than a tenth of the previous total.