It’s easy to understand why Wall Street executives are, for the most part, boycotting the Democratic National convention in Philadelphia: the party’s leftward tilt has made banking titans about as popular here as Giants fans at an Eagles game.
So why would big-money bankers travel from New York to Philly, where they’ll be greeted by scorching heat and verbal abuse from some Bernie Sanders supporter with body odor and hoagie breath?
And make no mistake: Wall Street hasn’t abandoned Hillary Clinton in 2016. In fact, despite the glaring absence of top Wall Street executives and their ilk here in Philadelphia, Democrats—the party of higher taxes on the rich, class warfare, and bank bashing—have oddly become a Wall Street darling of late, with executives pouring money into the Clinton campaign.
What a difference just four years makes.
Consider this: In 2012, GOP nominee Mitt Romney raised about $23 million from the financial industry compared to just $6 million for President Barack Obama. That was no surprise. Romney had worked on Wall Street and was a friendly face. Obama, meanwhile, had passed post-financial crisis legislation that effectively turned the banks into utilities, crimping both their business activities and profits. On top of that, he led a massive crackdown on their business activities that led to huge fines and embarrassing headlines.
Those headlines and regulations haven’t really abated—it’s more like a pause as Obama & co. focus on the 2016 race—and here at the convention, sniping at bankers is de rigueur for just about every speaker.
And yet Hillary Clinton, the party’s presidential nominee, is raking in the bucks, having accumulated $41 million so far from the financial industry compared to a paltry $109,000 for her Republican challenger Donald Trump.
So what gives?
First, it’s instructive to note exactly who’s giving the money to Clinton: It’s mostly private equity tycoons and hedge funders, not executives at the big banks. Contrast that with 2008, when Goldman Sachs was Obama’s second-largest contributor, and the firm’s top two executives, CEO Lloyd Blankfein and President Gary Cohn, were reliably generous Wall Street Democrats. (Clinton infamously earned big speaking fees from Goldman during her hiatus as a private citizen, after she left the Obama White House as secretary of state.)
These days, Goldman isn’t even among Clinton’s top 10 donors. They’ve given just $181,000 to her campaign. (Sure, they’ve pitched a measly $534 at Trump, but we’ll get to that in a bit.) Here’s why: The highly regulated banks are said to be scared to death of not only the bad publicity associated with playing politics—Goldman faced howling criticism over Hillary’s speeches—but also over the fallout for being associated with either party given the amount of regulation they now face.
In other words, showing favoritism to one candidate means being the target of the other, especially once the winner settles into the White House. Bottom line: A bad bet on Trump (or Clinton) could lead to trouble down the road. Hedge funds and private equity houses don’t face those same rules and regulations, which is why they’re free to give as they wish.
But again: Why would anyone who makes money in finance support Hillary Clinton, who’s tacked so far to the left to win the Democratic nomination she’s starting to look and sound like Bernie Sanders?
The dirty little secret among the financier donors here in Philly (i.e., those brave enough to show their faces) is that Hillary’s left turn is a ruse, especially when it comes to Wall Street. They’re betting she’s more like her husband than she is the unkempt senator from Vermont, no matter how much she tries to appeal to his followers.
Remember: As president, Bill Clinton presided over a booming economy and deregulated the financial industry. (Never mind that he had a tax-cutting GOP Congress, or that his bank deregulation set the stage for the 2008 financial collapse). That’s why the Clinton name still carries a lot of weight among financiers and their ilk, who tell me that once Hillary gets elected she will be as Wall Street friendly as Bill was.
As for Trump: Who knows what he might do to Wall Street? The financiers who have done business with him tell me he’s never really been a supply-siding tax cutter (though his economic plan reduces taxes dramatically on the one-percenters while Clinton’s does just the opposite). I’m also told he loves paying off politicians to get real estate deals done (hence his contributions to the Clintons over the years) and that his policies on trade—like calling for an end to NAFTA—could crash the stock market.
Then again, those same financiers also think Donald is crazy, given his apparent love affair with Russian President (that is, dictator) Vladmir Putin, not to mention the 10,000 other crazy things he’s said during the campaign.
So financiers are running to the devil they know: Hillary Clinton. Even the big banks that have largely held on to their chips so far are said to be talking about stepping up their contributions to Clinton once the conventions are over, gambling that she’ll become more centrist to win a general election.
And make no mistake: It’s a gamble. Those banks better hope Clinton starts to sound like her husband instead of Sanders or Obama, or it’s going to be another long four years for the fat cats.
Charles Gasparino is a Senior Correspondent at Fox Business Network and a columnist for Men’s Fitness. Follow him on Twitter.