Middle-Class Revulsion

Joel Kotkin writes at RCP:

Middle-class revulsion with the political mainstream has been driven by slow economic growth, stagnant wages, a dysfunctional education system, and, for smaller businesses, a tightening regulatory regime. Homeownership is now at a nearly half-century low. New business start-ups, for the first time in three decades, are not keeping up with the number of deaths. Both stats reveal a real decline in aspiration. Most Americans, in a stunning reversal of past trends, see a worse future for their offspring than themselves. Who can blame them? Middle-class breadwinners and working-class wage-earners now suffer from deteriorating health and shorter lifespans.

In other words, middle-class Americans could certainly use a champion. But those who chose Trump went off the rails.

He isn't cheering Clinton, either:

By elevating this disingenuous demagogue, Trump voters have assisted in the further ascendency of the oligarch class. The forces coalescing around Hillary Clinton -- mainstream Wall Street, particularly hedge funds, beltway lobbyists, the big media, Silicon Valley, Hollywood, and green capitalists -- do not share the priorities of Middle America. Bernie Sanders made an issue of Clinton’s Wall Street support, but the Vermont socialist was always too marginal, cranky and, ultimately, too doctrinaire to win even in today’s Democratic Party.

With Sanders conveniently dispatched, the crony-capitalist class is assured its worldview prevails. They can check all the boxes that Rob Atkinson has labeled as“the Davos application” of open immigration, greater globalization, free trade, and higher carbon prices.

Clinton, Podesta, and Coroprate Fleeces

At the Democratic debate on Saturday, Clinton committed a gaffe when she said that Wall Street supported her because of 9/11.

Hunter Walker reports at Yahoo:

At the barbecue on Sunday, reporters surrounded Clinton’s top aides ahead of her speech and peppered them with questions about the remark. Clinton’s campaign chairman, John Podesta, pointed to Clinton’s record pushing for increased financial regulatory reform during her time in Congress and on the campaign trail.

“I think she’s got a strong record on Wall Street reform. She’s put forward the strongest policies on Wall Street reform,” Podesta said.

Podesta, who was wearing a fleece jacket that bore the logo of Equilibrium Capital, a $1 billion financial and investment company, also pointed out that Clinton met with union leaders who represented Wall Street-area workers in the aftermath of 9/11.

John Podesta is quite comfortable with corporate fleeces, On December 12, 2013, Eric Lipton reported at The New York Times:

The defense contractor Northrop Grumman gave money to the left-leaning Center for American Progress, founded by John D. Podesta, as the nonprofit group at times bemoaned what it called theharmful impact of major reductions in Pentagon spending.

Pacific Gas and Electric sent in a donation as Mr. Podesta championed government incentives to promote solar energy and other renewable sources that the California company buys more of than nearly any other utility.

The pharmaceutical giant Eli Lilly was also a donor because of what it said was the Center for American Progress’s advocacy for patients’ rights — and just as the debate heated up in Washington over potential cuts to the Medicare program that covers Lilly’s most profitable drugs.

Mr. Podesta, named a senior adviser to President Obama, is not currently a lobbyist and therefore does not have to worry about the Obama administration’s self-imposed ban on hiring lobbyists to administration jobs. But he will nonetheless arrive at the White House after having run an organization that has taken millions of dollars in corporate donations in recent years and has its own team of lobbyists who have pushed an agenda that sometimes echoes the interests of these corporate supporters.

...
But Mr. Podesta, who was paid $220,000 last year by the center and who last served as a registered lobbyist in 2006, also arrives at the White House after serving on the corporate boards of at least two companies with ties to the clean-energy industry, Equilibrium Capital of Portland, Ore., and Jouleof Bedford, Mass. The future of both companies depends in part on environmental policies set by the government and heavily promoted by the White House.

Mr. Podesta has also served on an advisory board to Gryphon Technologies, a Washington-based contractor that has done work for the Defense Department and Homeland Security, an assignment that earned him $10,000 this year. In addition, he earned $90,000 as a consultant to the HJW Foundation of West Chester, Pa, according to an aide working with him on the disclosure report he is preparing. HJW is a nonprofit group run by Hansjörg Wyss, a billionaire businessman and major contributor to the Center for American Progress. 

FLASHBACK 2009 FROM BLOOMBERG:

With Obama bemoaning the prevalence of lobbyists in Washington, weekly family dinners at the Podesta households occasionally have grown awkward. Lobbying power couple Tony and Heather Podesta take turns hosting meals with Tony's brother, Obama transition boss John Podesta, and his wife, Mary, a mutual funds association lawyer. Now, sometimes, "we'll say something, and John won't respond. There'll be silence," says Heather, who changes the subject to wine or contemporary art. "Frankly, we're counting the days until the end of the transition so things can go back to normal."
Still, John's temporary gig hasn't exactly been bad for business. Tony and Heather have separate firms: He built his, The Podesta Group, into one of Washington's 10 largest lobbying outfits over the last two decades, while she started her fast-growing firm, Heather Podesta+Partners, two years ago. Both say they're signing clients at an unparalleled clip.

Tony and Heather have since split. 

HRC Cray-Cray

At Politico, Glenn Thrush writes of last night's D debate:

The pressure of the dual Sanders-O’Malley attack on Clinton’s Wall Street connections prompted her to say one of the craziest things she’s uttered in public during this campaign or any other. When Sanders acidly pointed out that Clinton has raked in millions from the wealthy executives at Citigroup, Morgan Stanley and Goldman Sachs, she riposted with a clever reference to gender politics: “You know, not only do I have hundreds of thousands of donors, most of them small, and I'm very proud that for the first time a majority of my donors are women, 60%.”

Cool. But things got weird. Even though Bill Clinton had close ties to Wall Street (his Treasury Secretary Bob Rubin would go on to become head of Citigroup) and financial sector’s donors ponied up plenty of cash for her 2000 New York Senate run, she claimed that the main reason bankers have flocked to her cause is – wait for it – because of the September 11, 2001 attack on the World Trade Center. “So I— I represented New York, and I represented New York on 9/11 when we were attacked,” she said, as the moderators from CBS gaped, gob-smacked. “Where were we attacked? We were attacked in downtown Manhattan where Wall Street is. I did spend a whole lot of time and effort helping them rebuild. That was good for New York. It was good for the economy, and it was a way to rebuke the terrorists who had attacked our country.”

Needless to say, the remark – delivered in her emphatic shout-voice -- raised eyebrows 24 hours after the terror attacks in Paris killed more than 120 people. And it’s not likely to go away. A cascade of obligatory, outraged piling-on ensued: “@HillaryClinton, you reached a new low tonight by using 9/11 to defend your campaign donations,” Tweeted RNC Chairman Reince Priebus.

HRC, Jeb, and Wall Street

Reuters reports:

Jeb Bush is leading the U.S. presidential campaign by at least one measure: financial support from Wall Street. 

The former Florida governor who is seeking the Republican presidential nomination received more financial backing than any competitor - Democrat or Republican - from employees of the major Wall Street banks between July and the end of September, campaign filings released on Thursday show. 

Employees from Bank of America (BAC.N), Citigroup (C.N), Credit Suisse (MLPN.P), Goldman Sachs (GS.N), HSBC HSBCUK.UL, JPMorgan Chase JPN.N, Morgan Stanley(MS.N) and UBS UBSAG.UL gave Bush a combined $107,000. He also received the maximum-allowed $2,700 from billionaire hedge fund manager Leon Cooperman. 

The sums are miniscule compared to Bush's total haul for the quarter of $13.4 million. But his popularity among financiers is starkly different from his standing in the multitude of national polls. 

Bush, seen as a moderate in the crowded Republican field where 14 candidates are competing for the nomination, trails Donald Trump, Ben Carson and Carly Fiorina, three candidates who have never held elected office, in every major poll.

The second most popular candidate on Wall Street according to giving patterns is Democratic front-runner and former Secretary of State Hillary Clinton. She took in nearly $84,000 from employees of the same banks.

American Crossroads and Public Equity

The Hill reports:

The Republican super-PAC American Crossroads is trying to flip the script on the Obama campaign's repeated attacks on Mitt Romney's private-equity past.

American Crossroads, the outside spending group affiliated with Karl Rove, released a new Web video Tuesday blasting the president for his "failed investment strategies" with public funds, most notably the now-bankrupt solar company Solyndra.

"Obama's attacking private equity, but what's his record on public equity investing?" asks a narrator in the video.

The attack ad came on the same day that the Romney campaign revived GOP criticism of Obama's green-energy programs.

  

The Word from the Fat Cats

John Heileman's New York profile of the Obama campaign is getting attention for acknowledging that it will run a fear campaign against Romney. More significant material lies deeper in the piece.  Bill Burton says he is having trouble raising money for the pro-Obama Super PAC because of the president's past denunciations of such groups.

But one of the most vaunted fat-cat-wranglers in Democratic history tells me that this is only part of the story. “There are several things going on,” this person explains. “Number one is the shabby treatment the president has given his donors. Unlike Clinton, who loved them and accommodated them, Obama announced he didn’t like big money and gave them the back of the hand. Point two is the president’s campaign announced—or not announced, they let it out, it got in the press, it got in the ether—that they were going to raise $1 billion. So when they come to you and say, ‘We need two-fifty,’ the answer is, ‘What the f--- do you need my two-fifty for? You’re going to raise a billion! Not a hundred million. A f---ing billion dollars!’ You’re getting into federal-budget territory with that kind of claim.

“Three is the Obama donors aren’t scared. They think this is a slam dunk. They don’t think the president’s in trouble. They look at the Republican-primary process and say, That group of f---ing clowns? Fourth, Burton and his partner are great guys, but they have no experience in fund-raising. They thought that with the patina of the White House, the checks would just roll in. Wrong.

“Then, everybody looks to George Soros. ‘Why won’t George throw in?’ I know George pretty well. Early on, he wanted to come in to make his case on the economy. George doesn’t want legislation tweaked. He doesn’t want a rule changed. He wants his ideas heard out. But George couldn’t get a meeting in the White House. And then George is saying, ‘Where are the Obama money people with their 5 and 10 million dollars? Where is Penny Pritzker, Exhibit A? Why isn’t she throwing in 10 million?’ And that is a very good question.”

A prominent private-equity player in Gotham who supports Obama agrees with all of that but adds another insight. “Among rich Republicans, the view of Obama is that he’s the Devil,” this person says. “But on the Democratic side, certainly on Wall Street, there’s no visceral reaction against Romney. So if I give $10 million, I’m out the $10 million, and I’m gonna pay more in taxes if Obama wins. And I’m doing it against somebody who—I may not agree with his social views, but I don’t think he’s a bad person. And I’m not really into negative advertising, which is what a super-PAC would do … Then there’s the fact nobody on Wall Street thinks Obama gives a s--- about them. They think his attitude is, ‘If I lose Wall Street, it’s not the end of the world.’ And they’re right.”

Obama Makes Peace with Wall Street?

On Tuesday, Hans Nichols reported at Bloomberg:

Jim Messina, President Barack Obama’s campaign manager, assured a group of Democratic donors from the financial services industry that Obama won’t demonize Wall Street as he stresses populist appeals in his re-election campaign, according to two people at the meeting.

...

In response to a question, Messina told the group of Wall Street donors that the president plans to run against Romney, not the industry that made the former governor of Massachusetts millions, according to one of the people, who spoke on condition of anonymity to discuss the private meeting.

...

Messina also discussed the president’s reversal in encouraging donors to contribute to independent political action committees backing Obama, the person said. Messina’s remarks to the group echoed a public e-mail he sent to supporters saying,“We can’t allow for two sets of rules in this election whereby the Republican nominee is the beneficiary of unlimited spending and Democrats unilaterally disarm.”

Campaign officials said the decision was made after seeing the Republicans’ so-called super-PACs emerge as the dominant spending force in the party’s early presidential contests. In last week’s federal financial filings, one set of the groups, American Crossroads and Crossroads Grassroots Policy Strategies, reported raising $51 million last year.

Elizabeth Warren, Banks, and the Crossroads Groups

Crossroads GPS has gone after Elizabeth Warren on her ties to the financial services industry and Occupy Wall Street. Michael Beckel writes at The Open Secrets blog:

Crossroads Grassroots Policy Strategies -- the conservative nonprofit advocacy group founded with assistance from GOP strategist Karl Rove -- wants you to believe that Democratic Senate candidate Elizabeth Warren is too close to Big Finance. However, last month, the group criticized her for being too close to the Occupy Wall Street movement.

Warren has called Crossroads GPS' new ad “factually wrong and morally wrong.”

Who is funding these attacks? For its part, Crossroads GPS is not legally required to publicly disclose its donors, but its sister organization -- a super PAC known as American Crossroads -- is. And American Crossroads has significant ties to the finance sector and other wealthy business interests.

Larry Sabato, the director of the Center for Politics at the University of Virginia, called the pair of Crossroads GPS-produced ads some of the "least effective" ads he has seen.

"Rarely do you see such diametrically opposing attacks made by the same group within a short period of time," Sabato told OpenSecrets Blog. "Given her liberal ideology, a viewer could believe that Warren had some sympathy for the Occupy Wall Street demonstrators, but to make her somehow sympathetic to big bankers and Wall Street? That strains credulity."

For her part, Warren helped create the President Barack Obama's Consumer Financial Protection Bureau -- a new regulatory body that many finance sector interests spent heavily to oppose.

Wall Street Money

In 2008, President Obama did well raising campaign money from hedge funds and other elements of the financial community. Nicholas Confessore and Griff Palmer write at The New York Times:

It is no secret that the relationship between President Obama and Wall Street has chilled. A striking measure of that is the latest campaign finance reports.

Mitt Romney has raised far more money than Mr. Obama this year from the firms that have been among Wall Street’s top sources of donations for the two candidates.

That gap underscores the growing alienation from Mr. Obama among many rank-and-file financial professionals and Mr. Romney’s aggressive and successful efforts to woo them.

The imbalance exists at large investment banks and hedge funds, private equity firms and commercial banks, according to a New York Times analysis of the firms that accounted for the most campaign contributions from the industry to Mr. Romney and Mr. Obama in 2008, based on data from the Federal Election Commission and the nonpartisan Center for Responsive Politics

The President and Wall Street

In an article in The Washington Examiner, Timothy Carney notes that the president has close ties to Wall Street:

Obama raised $14.8 million from Wall Street in the 2008 election, according to the Center for Responsive Politics -- more than any politician ever, and more than George W. Bush raised in both of his elections combined. From the fattest cat, Goldman Sachs, Obama raised $997,095, more than four times McCain's Goldman haul and more than any candidate has raised from any single company since the McCain-Feingold campaign finance regulations.

In 2008, the Center reports, the securities industry gave 56 percent of its presidential contributions to Democrats. In comparison with Obama's total, McCain only got $8.7 million.

As Carney points out, the industry has been sympathetic to the administration's agenda. After the House passed its regulatory bill a few days ago, the CEO of the Securities Industry and Financial Markets Association wrote: “While we may disagree on certain policy details, there is no doubt that the industry shares the same goal of reforming our financial system as President Obama and the Congress. We stand committed to further constructive engagement on these issues as the legislative process moves forward."

Filling Gaps in the White House Website, Part 5

On June 16, the president did a couple of media interviews, mainly about economic policy and financial services regulation. As of this post, neither is on the White House website.

CNBC asked about entitlement reform:

Well, this is something that keeps me awake at night. There's no doubt that we've got a serious problem in terms of our long-term deficit and debt. I make no apologies for having acted short-term to deal with our recession. I think the vast majority of economists, conservative and liberal, felt that extraordinary interventions were necessary to prevent us from slipping into a potentially deep depression. But as soon as this economy recovers, and that means planning now and starting to take some steps now to deal with it, we're going to have to close that gap between the amount of money coming in and the money—amount of money going out. I have said before and I will repeat, I believe that we can reform entitlements in a way that makes it more sustainable. But most experts will tell you that the biggest driver of those deficits is health care costs. And no matter what else I do, if health care is still going up 5, 6, 7, 8 percent a year, if it's going up three times faster than wages, then we are going to see a federal government that is broke.

The Wall Street Journal asked about tax rates and tax reform:

I do think that tackling tax reform, both on the individual side and on the corporate side at some point — akin to what was done in 1986, where you clear out some of the underbrush and you make sure that the base is broad, but everybody knows what it is that they’re paying and there aren’t a whole bunch of loopholes; there is serious enforcement and predictability — that kind of reform could end up generating the revenues that we need to run the basics of our government while actually in some cases lowering some rates. But that requires that everybody buy into a simpler, fairer system.

The one thing that I think is very important to understand is that there’s no free lunch, and sometimes politicians have been pretty irresponsible in saying you can have a prescription drug plan, you can have two wars, we can do a whole bunch of things, but we’re going to cut your taxes at the same time. And at some point something has to give.