President Obama is a bailout-backer who set records for raising cash from the financial sector. During his administration the revolving door between Wall Street and the government has spun as fast as ever. So how could Obama possibly run as the anti-Wall Street candidate?
Because his likely general election opponent is Mitt Romney.
As the Occupy Wall Street protests spread across the country, and bailed-out megabanks like Citibank and Bank of America report multibillion-dollar quarterly profits, the Obama campaign has signaled it will try to run against bankers. As the Washington Post reported, "Obama plans to turn anti-Wall Street anger on Mitt Romney, Republicans."
Obama's motivation is obvious: Nobody likes the banks. Whether Obama likes banks is an open question.
Obama holds the record for the most money ever raised from Wall Street -- $15.8 million in 2008. The $1 million Obama hauled from the executives and employees of Goldman Sachs is the largest sum a candidate has raised from one company since the McCain-Feingold campaign finance restrictions were imposed in 2002.
In the fall of 2008, Obama was the only person outside of the Bush administration who could have blocked the massive bailout of Wall Street. But he instead assured the bill's passage, and then rewarded its authors, Ben Bernanke and Tim Geithner, with reappointment and promotion, respectively.
The revolving door spins as fast as ever. Goldman alumni populate the Obama administration, and Obama administration alumni populate Citigroup and Goldman and lobby for Bank of America. Obama's first chief of staff, Rahm Emanuel, worked for Goldman Sachs, and his new chief of staff, Bill Daley, is also a banker and Fannie Mae alumnus.
What about the Democrats' much touted Wall Street "reform" bill? Goldman Sachs CEO Lloyd Blankfein declared "Goldman will be among the biggest beneficiaries" of the legislation. The biggest banks have only gotten bigger. And Moody's credit rating agency finds that the biggest commercial banks are still very likely to get a bailout were they to fail. The Hill staffers who wrote the bill are already working for the banks.
Obama and his party are clearly not scourges of Wall Street. But at least they're not as bank-friendly as Romney. Amazingly, Romney has actually outraised Obama in the securities and investment industry, $3.6 million to $1.6 million, according to data from the Center for Responsive Politics.
Romney, who made his wealth in finance, fiercely defends corporate America and sticks up for Wall Street. "Wall Street is connected to Main Street," Romney said at a forum this month, pushing back on the White House's verbal lashings of the banks. "Let's not fight any street in America." He wrote off Occupy Wall Street as "class warfare" and told conservative radio host Hugh Hewitt that "if we want America to have lots of good jobs with rising incomes, we want to see business doing well in America."
In general, Romney's correct about business. Regarding Wall Street, though, he's wrong. Business in a free market profits from providing value, and the financial sector provides liquidity and -- theoretically -- optimizes the distribution of capital, getting money to those who can do the most with it. But the free-market rules don't apply to Wall Street anymore.
Banks make profits largely by offloading their risk onto taxpayers, while rolling some of their profits into lobbying for special favors. Bank of America this week moved its risky derivatives business from Merrill Lynch to a subsidiary bolstered by FDIC insurance. Call it socialized risk for private profit. Another big bank trick recently: borrowing from the Federal Reserve for free and then lending to the U.S. Treasury, with interest, at no risk.
It's a knee-jerk Republican response to defend business. But it's unconservative today to defend the big banks. Ron Paul, in Tuesday night's GOP debate, was the only one who seemed to get this. When asked about the Occupy Wall Street anger, he knocked Herman Cain for "blaming the victims," and then went on a populist riff: "Guess who they bailed out? The big corporations. The people who were ripping off the people. ... The middle class got stuck. They lost their jobs, and they lost their houses."
Jon Huntsman also got it right in a Wednesday Wall Street Journal column laying out a plan to strip the too-big-to-fail banks of their privilege. Huntsman also pointed out that Romney hasn't addressed the too-big-to-fail question at all.
Most Americans -- left, center and right -- have a negative opinion of Wall Street. Seventy-eight percent assign Wall Street a good chunk of the blame for the current economy.
Democrats know this. Obama's attacks on Wall Street may be naked opportunism. But by standing with the titans of finance, Romney is not only playing tone-deaf politics, he's also being unfaithful to the free market.
Timothy P. Carney, The Examiner's senior political columnist, can be contacted at email@example.com. His column appears Monday and Thursday, and his stories and blog posts appear on ExaminerPolitics.com.