THE audience at President Obama’s “fixing Wall Street” speech at Federal Hall this week was packed with Democratic donors and lefty community organizers. Of course, the White House can invite whoever it likes to such events — but the rest of us ought to ponder the message contained in that guest list.
After all, candidate Barack Obama slammed the Bush administration as “the most politicized” in history for rewarding cronies with perks. Indeed, Democrats had savaged the Bushies for inviting donors to social receptions at the White House; one anti-war group even sued because tickets to the 2005 inaugural parade had gone to Bush backers.
It’s thus significant that the crowd invited to hear Obama deliver what the White House billed as a major policy address outlining the president’s vision for financial reform was full of people who arguably helped cause the economic meltdown.
It makes sense that the audience of about 130 would include broad representation from Wall Street firms. But these executives stood out from the typical financial crowd in that they have a strong record of donating to Democrats — including Obama.
Records from the Center for Responsive Politics show that, since 2006, the financial gurus who attended Obama’s speech have made direct, individual contributions of at least $5 million to Democratic coffers, versus just $375,000 to GOP candidates and committees.
That’s far from the Wall Street norm. Over the same period, the financial industry overall gave more to Republicans — $395 million-plus, versus $386 million for Democrats.
The guest list also included top Dem “mega-bundlers” and other major fund-raisers, including Penny Pritzker, the national finance chair for Obama’s presidential campaign.
The White House described the gathering simply as “a largely Wall Street audience.” But that doesn’t cover many of the guests.
Shonali Bhowmik, the president of Little Lamb Recordings, for example, is a New York singer with no clear tie to credit-default swaps — unless you count the fact that she organized and headlined an Obama fund-raiser during the primaries.
Then there was a host of representatives of liberal “community organizations,” including New Jersey Citizen Action, Communities Homeowners and Neighbors Gaining Economic Rights (CHANGER), the Northwest Bronx Community and Clergy Coalition, Democratic Leadership for the 21st Century and Green America — a group urging Americans to “break up with your mega-bank” in favor of “greener, community-committed banks.”
Now there’s a way to kick-start the financial industry.
Other odd invitees included Daniel Mintz, the campaign director of MoveOn.org Political Action, and Andy Tobias, the treasurer of the Democratic National Committee and official moneyman for several other Dem PACs, including the Obama Victory Fund.
Tobias says he did no fund-raising at the event; the White House didn’t respond to a request for comment. And while it’s unlikely that cold campaign cash actually changed hands, the powwow surely opened up the channels between wealthy Wall Street bigwigs, Dem moneymen and those community “activists.”
And that is exact- ly the problem.
Rewarding donors with invites to cool presidential events is hardly new — though there’s a big difference between a dinner party and a policy address with major implications for the US economy. And the hypocrisy is striking, coming from an administration that still preens about its postpartisan purity.
More important, the guest list embodied the very problems Obama’s speech was trying to address.
The president is all for slapping Wall Street with a bunch of new regulations — but the financial crisis was caused in no small part because the safeguards already on the books were being flouted, while those in Washington responsible for enforcement looked the other way.
And the failure of the “cops” had a lot to do with the money the politicians were getting from the banks. The University of Chicago’s Luigi Zingales has noted that, over the last 20 years, the financial industry spent a whopping $2.2 billion in political contributions and another $3.5 billion on lobbying — more than any other industry.
This, combined with the extensive personal ties between banks and powerbrokers in Washington, led government officials to do pretty much what the financial industry wanted — at the eventual expense of the entire US economy.
If Obama really wants to clean up Wall Street, he should put the new regulation aside and focus on the too-cozy relationships between the financial industry and political partisans.
Plus, he should make it clear that economic policy won’t be set by liberal “community organizations” — groups that, by screaming “diversity” and leaning hard on lawmakers to promote lending to unqualified borrowers, played a big role in producing the mortgage meltdown.
At the very least, the president shouldn’t have hosted a Wall Street lovefest celebrating all these bad actors.
clyne.meghan@gmail.com