Wall Street is Already Making its Bet for 2016: Hillary Clinton
The election ended less than two weeks ago and a few contests are still in doubt, but the overall result turned out well for one party. I’m not talking about Republicans. The financial services industry won big. In the 2014 election cycle, the industry invested $420 million in Senate and House races. 62% went to Republicans and 38% to Democrats. To be clear, Wall Street doesn’t make campaign contributions. They invest, and they expect a return on that investment. To put Wall Street’s investment in some context, lawyers and lobbyists only kicked in $130 million, and the health care industry ponied up $123 million. These totals are undoubtedly understated because not all campaign contributions have to be disclosed. With Republicans firmly in control of the Senate and enjoying an even bigger majority in the House, the industry has to feel good about the prospects of watering down Dodd-Frank and keeping their tax preferences.
In the 2012 elections the financial services industry invested in $89 million, with 77% directed to the Romney campaign. It financed another $582 million in congressional campaigns, with two-thirds winding up in Republican coffers. Obviously the Presidential bet didn’t work out, but it certainly didn’t hurt the financial services industry in the ensuing two years.
The industry is already focused on the 2016 presidential cycle. With their strong preference for Republicans in the last two cycles, you might expect that the financial services industry is going to back one or more Republican candidates. As William Cohan reports in “Why Wall Street Loves Hillary,” Wall Street isn’t wedded to Republicans:
Wall Street does not seem to be the slightest bit shy about coming out for Hillary—and are now contributing their money to prove it. While Priorities USA Action, a super PAC dedicated to getting Clinton elected in 2016, does not have any Wall Street banks among its top 50 donors to date, there have been large contributions from wealthy hedge funds, such as Renaissance Technologies, which has donated $4 million (the largest single contribution); D.E. Shaw, whose employees have donated $1.375 million; Khosla Ventures and Soros Fund Management, which have each donated $1 million; and Ripplewood Holdings, a private equity firm, which contributed $400,000. There are many Wall Street financiers who have donated $25,000—by design, the maximum contribution—to the Ready for Hillary superPAC.
Wall Street is interested in winners, rather than Republicans or Democrats. They will invest enough money in a candidate so that they own that candidate on the issues that matter to Wall Street. It’s that simple. If Mrs. Clinton wins the Democratic nomination and the next election, she would be the first female President and first spouse of a former President elected to America’s highest office. In one sense, her election would represent a huge step forward for the United States. However, on the things that really matter she’d simply be one in a long line of Presidents who owe their election to Wall Street. If Mrs. Clinton becomes President, Wall Street will flood her administration with the intellectual sons and daughters of Robert Rubin, Larry Summers, and Roger Altman. In my opinion, breaking Wall Street’s control may be more important and a bigger precedent than electing the first female president.