NEW YORK — Looking back, the end of Wall Street’s love affair with President Barack Obama came at a meeting in the Oval Office.
Surrounded by 13 of the nation’s biggest financial CEOs, Obama fired the first shot: “My administration is all that stands between you and the pitchforks.” A few months later he tongue-lashed them as “fat cats” and struck a populist tone to raise taxes on the rich and slap tough new regulations on their businesses.
There was no surprise after all this that financial executives would respond with their checkbooks. For every dollar that Wall Street has given to Obama this election, it has given three to Romney.
Election Day might mark the official breakup between Wall Street and Obama. But, with the race as tight as it is, the question is whether the lopsided Romney support will help the industry or cause it four more years of agony.
“Money always wants a seat at the table,” said Jeff Connaughton, a former lobbyist and political aide who has written about Wall Street’s influence in Washington. “If Obama wins a second term, Wall Street is going to want to have a seat at that table and not a re-elected president who feels spiteful.”
Wall Street has plenty of reasons to support Romney, the former Massachusetts governor.
Obama and a Democratic Congress put in place a far-reaching overhaul of the financial system known as Dodd-Frank. Critics contend that the law adds burdensome regulations that squeeze profits and hinder recovery.
Obama also supports raising taxes on the wealthy and investment managers. He has sometimes struck a populist tone amid complaints by Occupy Wall Street activists and other critics that no senior executives have gone to jail for causing the financial crisis.
The financial sector has bet big on Romney. The industry – including insurance and real estate – has so far sent $52.4 million in campaign donations to Romney, according to data compiled by the Center for Responsive Politics. That’s almost 19 percent more spent on ousting Obama than the $44.2 million the financial sector spent on putting him into the White House in 2008.
If the president wins re-election, he wouldn’t necessarily bring down the hammer on Wall Street. Even though Obama wouldn’t be able to run again, congressional Democrats may still have to curry favor with the financial services industry, Connaughton noted.
Tuesday’s election may be Wall Street’s last chance to avoid the brunt of Dodd-Frank, many of whose regulations have yet to go into effect. Romney has said he would “repeal and replace” the law, saying he supports certain provisions. Regulators have yet to implement many Dodd-Frank rules, including the Volcker Rule that would sharply limit firms’ ability to trade with their own funds.