Brat's stunning landslide win over Cantor in the June 10 primary gives Republicans the opportunity to change from being the party of Blackstone to the party of Baugh.
Brat beat Cantor, despite being outspent $5.5 million to $250,000, by running against corporate welfare. "I will fight to end crony capitalist programs that benefit the rich and powerful," Brat said in his victory speech Tuesday night.
Brat explained on the trail that he’s pro-business, but "I’m against Big Business in bed with Big Government."
Of Wall Street bankers who precipitated the 2008 crisis, Brat said, "instead of going to jail, they went on Eric's Rolodex."
Immigration became Brat's biggest issue, and he cast that in terms of corporate interests versus the middle class. Of increased immigration, Brat said, “big business gets the cheap labor and the American people pay the tab.”
Cantor was vulnerable to this attack because of his policies and his donors.
There was nothing extraordinarily corporatist about Cantor’s voting record, but he was a party man in a party that often chooses the business lobby over free enterprise.
Cantor helped usher the 2008 bailout to passage. He was the Chamber of Commerce's most important ally in reauthorizing the Export-Import Bank in 2012, and was expected to play the same role again this year. He voted for the insurers' and drug makers' beloved Medicare prescription drug bill in 2003, and for the Republicans' pork-filled energy bill in 2005.
Cantor's fundraising was all Wall Street and K Street. His campaign raised more than $2 million from political action committees. Combine his campaign with his ERIC PAC, which Cantor used to help elect other Republicans, and you've got $1.2 million in money from the “securities and investment” industry in 2013 and 2014, according to the Center for Responsive Politics.
Employees, executives, and the PAC of Goldman Sachs, where Cantor's wife once was a vice president, provided $100,000 to ERIC PAC and $27,000 to Cantor's campaign. And of course, the good folks at Blackstone Group provided nearly $40,000 to ERIC PAC, and a league leading $66,000 to Cantor's campaign.
As with his votes, Cantor’s fundraising record doesn’t reflect some personal obeisance to Wall Street—it was another dimension of Cantor being a team player.
Democrats, you see, have guys like Sen. Chuck Schumer of New York as their liaisons to Wall Street. Most of the senators and congressmen from New York, New Jersey and Connecticut are expected to funnel money from Wall Street to the Democratic Party. Republicans, though, hold almost no seats in the New York City area. And so Eric Cantor became their Wall Street liaison.
Somebody had to be the House GOP’s guy on Wall Street, and with his wife's background, Cantor made as much sense as anyone.
The relationship was a close one. “He rang the bell and they came" with contributions one financial lobbyist told me. Cantor’s old chief of staff, John Emling, is Citigroup’s co-director for federal affairs. His old communications director, Laena Fallon, now runs the communications shop at the Financial Services Forum. Other Cantor alum lobby for banks and hedge funds.
Cantor's defeat leaves a hole. Now who will be the House GOP's Wall Street guy? Normally, that job could fall to the Financial Services Committee chairman. But the man with that gavel today, Jeb Hensarling, is notably a lukewarm fundraiser -- a fact that has stunted his ambitions for a party leadership job. More importantly, Hensarling's free-market views put him at odds with the financial sectors on 2014's most pressing issues before his committee: Fannie Mae, terrorism insurance subsidies, flood insurance subsidies and export-financing subsidies.
So what’s the GOP to do about Wall Street?
Maybe Republicans should take a cue from the voters of Virginia’s 7th District and forget about the big banks and the hedge funds.
Cantor's closeness to Wall Street was supposed to be a strength. It proved a liability. This is true for the GOP as a whole. Bush bailed out Wall Street, which helped push the Democrats to victory in 2008. Mitt Romney sidled up to Wall Street, and Democrats used that fact to drag down the GOP in 2012.
Maybe then, when Republicans speak of "free markets," voters won't assume that's code for "corporate profits." If the GOP stops seeking love on Wall Street, it may find votes on Main Street — or West Broad Street, as the case may be.Timothy P. Carney, The Washington Examiner's senior political columnist, can be contacted at email@example.com. His column appears Sunday and Wednesday on washingtonexaminer.com.