This past week, both Politico and The Weekly Standard ran stories blaming Republican failure to develop new populist policies on the party’s dependence on Wall Street campaign cash. First, Jonathan Martin wrote:
With ambitious politicians trekking to Wall Street to raise cash and frequently sending their former staffers to lobby for the banks on K Street, the ardor elected Republicans may have for cracking down on financial institutions is diminished.
“If [breaking up the banks] even got to the stage where politicians were talking about it, then there would be a discussion of, ‘Well, how are we ever going to fund our campaigns,’” predicted [Ramesh] Ponnuru.
More recently, Matthew Continetti added:
Ending corporate welfare and breaking up the big banks may sound swell, it may be the right thing to do, but you won’t see a Republican politician advocating these policies because that politician depends on campaign funds from banks … Thus the Republican quandary: Crack down on Wall Street and watch the party’s financial resources dry up.
Would Republican politicians really become penniless over night if they took on Wall Street?
Republicans do take lots of Wall Street cash. In 2012, the “Securities & Investment” industry gave $68,983,126 to the Republican Party and it’s committees (RNC, NRCC, and NRSC). Only “Retired” persons gave more money to the GOP ($74,869,776). And Wall Street gave double what the Real Estate sector gave ($35,718,935) and more than triple what oil and gas companies gave ($18,330,684). The “Securities & Investment” sector was also the top donor for every top member of the House Republican leadership team (Speaker Boehner, Majority Leader Cantor, and Majority Whip McCarthy).
But there are a lot of different industries that give money to Republicans. All together Wall Street made up just 12 percent of all cash raised by Republicans in 2012. And Wall Street doesn’t give all its money to Republicans. The “Securities & Investment” sector gave $54,963,434 to Democrats in 2012 alone.
And even if an enterprising Republican did take on the banks, would all their Wall Street funding really dry up? It hasn’t for Sen. Richard Shelby, R-La., who voted for a Sen. Sherrod Brown, D-Ohio, bill in 2010 that would have capped a single bank’s borrowing at 2 percent of GDP. He still managed to collect $848,338 from Wall Street in 2012, more than double what he collected from any other sector.
Replacing every cent that Wall Street gives would be difficult. But no industry is monolithic. There are plenty of voices on Wall Street that want to see big banks taken down a notch.
More importantly, it is not like Wall Street has any vested interest in the conservative movement. They back winners. As recently as 2008 Wall Street gave far more to Democrats (57 percent) than they did to Republicans (43 percent).
If Republicans can’t figure out how to develop a new agenda, one that visibly takes on Wall Street, they will end up losing elections, and the Wall Street campaign cash that only comes with winning, anyway.