Politics & Policy

The Wall Street Democrats

Pro-business does not mean pro-market.

When President Barack Obama’s vast new regulatory state is completed, Wall Street firms ought to have a competition over the naming rights.

Will it be the CitiDeal? Or the Goldman Society? Or the UBS/J.P. Morgan Joint Initiative for the Establishment of a Social Democracy?

The Democratic majority was bought and paid for by Wall Street and corporate money. The Masters of the Universe helped give us the Masters of the Beltway, in a synergistic exercise that would have dumbfounded even Lenin. When he famously said capitalists would sell the rope to hang them with, he was at least talking of a commercial transaction — not maxing out to a campaign committee.

Back in 2006, Democrats began a hard sell on Wall Street led by New York senator Chuck Schumer and then-representative Rahm Emanuel, now White House chief of staff. The basic pitch was that Democrats were taking Congress, and the financial world should get on board — surely delivered with all the bare-knuckled subtlety for which those two are justly renowned.

Democrats beat Republicans in the Wall Street money chase in 2006, and kept on going. In the 2008 election cycle, Democrats garnered 73 percent of the political donations of Goldman Sachs, as well as the majority of donations from other financial giants such as UBS and Citigroup. They soaked up most of the hedge-fund money, and won the battle for donations from industries as varied as health care, defense, and law.

After Voltaire attended his first orgy and was invited back again, he declined on grounds that once was an experiment, but twice would be perverse. Its experiment has gone horribly wrong, yet Wall Street has persisted in its perversity.

At the end of last year, the Center for Responsive Politics wrote of hedge funds and private equity firms, “This election cycle is proving to be the most left-leaning for the industry.” And it wasn’t just finance. “Democrats have an enormous lead in almost every business sector they denounce,” NR’s Kevin D. Williamson noted in January.

When Obama went to Cooper Union to chide the titans of finance on reform, it was basically a tiff within the family (although there are signs they are starting to warm to the GOP again).

Wall Street has its share of ideologically motivated liberals who wouldn’t blink if Obama called for nationalizing the banks, so long as he continued to support abortion on demand. Goldman Sachs alum Jon Corzine is emblematic of the breed; he made a bundle on Wall Street before devoting himself in all earnestness to bankrupting New Jersey.

Then, there’s fear and greed. The more Washington does, the greater the need to protect yourself, and the greater the opportunities for profit. A writer for the Huffington Post reported on carve-outs in the financial-reform bill. “Obtaining a carve-out isn’t rocket science,” a Republican financial-services lobbyist told the website. “Just give Chairman [Chris] Dodd and Chuck Schumer a [expletive denoting a lot] of money.”

That’s the Democratic appeal writ large. They are running a protection racket. No matter how bad a “reform” is, it could be worse. This is how they bought off the drug companies in the health-care debate — by threatening worse. It is why the insurance companies were conflicted. Yes, they were maligned. But they’d live to fight another day, and in the meantime, the government would mandate that people buy their product.

The entanglement of business and government is potentially lucrative for both sides. Why would GM or Chrysler want a strict free-market regime in the United States?

This is the threat of corporatism — that it’s pro-business and anti-market. Unfettered capitalism represents a threat to existing firms as much as a boon to them because the unforgiving discipline of the market always looms.

The late Austrian intellectual Willi Schlamm once said: “The trouble with socialism is socialism. The trouble with capitalism is capitalists.” And that was well before they sponsored the Obama Democrats.

  Rich Lowry is editor of National Review. © 2010 by King Features Syndicate.

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