The aggressive pushback from the Obama campaign this week after its surrogate, Newark Mayor Cory Booker, called criticism of Mitt Romney’s private equity firm Bain Capital “nauseating” and said it was time to “stop attacking private equity,” has exposed a broader tension between Democrats looking to capitalize on popular anger with big banks and the party’s dependence on Wall Street for campaign donations and local tax revenue.
Wary of alienating bankers who have turned sharply away from the president since 2008, Northeastern Democrats with close ties to finance are cringing at the prospect of five more months of anti-Wall Street rhetoric before ballots are cast in November—and the campaign is flexing its muscles to shove a growing number of dissident party members back in line and on message.
“Northeastern Democrats are hiding” now that the Obama campaign has responded to the intraparty criticisms by redoubling its attacks on Romney’s experience at Bain, said veteran New York Democratic political consultant Hank Sheinkopf. “It's all about the money. The first rule of congressional service is get reelected. And that means money.” And the money, of course, is on Wall Street.
The criticisms began last week after the campaign debuted the first in what became a series of videos featuring workers laid off from businesses Bain had owned, and financier and former administration “auto czar” Steven Rattner called the line of attack “unfair.” Then Booker, the rising Democratic star with close ties to billionaire New York Mayor Michael Bloomberg, chimed in on NBC’s Meet the Press. Former Pennsylvania governor Ed Rendell followed up by calling the attacks “very disappointing.”
“I get that some people just think the whole idea of private equity is bad and doesn’t contribute. I’m just saying I’m not one of those people,” Massachusetts Gov. Deval Patrick, a close ally of the White House who’s also worked with top Obama political adviser David Axelrod, told CNN Tuesday, keeping up the steady drumbeat of dissent. Boston has a robust financial industry that has found an ally in Republican Sen. Scott Brown, whose work on their behalf during the Dodd-Frank fight has endeared him to Wall Street banks as well.
The Obama campaign, insistent on the strategic value of undermining Mitt Romney’s claim that his experience buying, reorganizing, and selling companies at Bain makes him a veteran “job creator,” has forcefully rejected those complaints. Obama on Monday referred to Romney by name, a rarity for the president, to argue that the Republican had made his business experience the “main calling card for why he should be president,” and that while his goal of maximizing profits was appropriate for a businessman, it’s “not always going to be good for communities or businesses or workers.”
“Republicans have tried to make this debate about capitalism and private equity. And Democrats are going to group therapy analyzing their comments.”
Sen. Chuck Schumer, the New York lawmaker who corralled Wall Street donations to help finance the Democratic takeover of Congress in 2006, has improved what had traditionally been a frosty relationship between the party and Big Finance, and leading party officials are taking care not to alienate more of those donors. Schumer has not commented on the Bain attacks.
“This cannot be a campaign about getting even,” said Robert Zimmerman, a New York fundraiser for Obama and a member of the Democratic National Committee. “What concerns me this past week is that Republicans have tried to make this debate a debate about capitalism and private equity. And Democrats are going to group therapy analyzing their comments.”
Schumer has previously acknowledged that his party’s aggressive push for the 2010 Dodd-Frank reform law intended to better regulate financial markets in the aftermath of the 2008 meltdown has dented the party’s brand on Wall Street—which could be further damaged by the president’s extended attack on private equity firms like Bain.
“People like Schumer are very nervous about this and worry about that industry because it’s such a big part of New York tax revenue,” said David Callahan, co-founder of the think tank Demos and author of Fortunes of Change: The Rise of the Liberal Rich. “A lot of mayors or governors want to depict themselves as creating a business-friendly environment. A lot of Democrats are dependent upon Wall Street money, and it’s very risky to piss that money off.”
Obama raised more money from Goldman Sachs employees than those of any other private company in his 2008 campaign, and Wall Street accounted for more than 20 percent of his historic $750 million haul, according to Reuters. Bain Capital itself has seemed partial to Democrats, with employees giving $92,270 to Obama over his last two campaigns, while Romney has collected $229,650. Altogether, the company’s workers have given Democrats more than $1.3 million since 2008—more than twice what Republicans have received.
Obama set the broad contours for his reelection campaign in Kansas last December with a populist speech about the need to reduce income inequality and rein in Wall Street, and even some of the same New York fundraisers and bankers thrilled by his recent embrace of gay marriage are turned off by his ongoing broadsides against private equity and other risky financial activity.
While the Dodd-Frank law and its efforts to crack down on the financial industry have alienated some top executives, conversations with party operatives and fundraisers—and the back and forth last week between the campaign and its wayward surrogates—suggest the president and national Democrats in general are still figuring out how fiery their rhetoric should be, a longstanding issue for the party.
In the spring of 2000, some Democratic strategists were aghast at Vice President Al Gore’s sharp turn toward populist appeals as the general election campaign got underway. He seemed to be rebuking Bill Clinton’s business-friendly “New Democrat” approach that they thought had been vital to his becoming the first Democratic president since FDR to win a second full term in the White House.
“Al started talking about standing up for the people and not the powerful; it was a big message point,” said Tad Devine, a seasoned Democratic consultant who worked for Gore that year, and for John Kerry in 2004. “When Joe Lieberman got picked to go on the ticket, he wasn’t that comfortable with that. So sometimes, within a campaign itself, even at the highest level, there might be some discomfort with a rhetorical approach.”
This year, even those strategists in the Northeast who are hewing to the campaign’s official line are taking care to implicitly warn the president not to take his attacks too far.
“I think it’s possible to thoughtfully critique the finance sector while still agreeing that they are a fundamental engine for economic growth in our country,” said Jennifer Cunningham, the influential New York Democratic consultant who guided the same-sex marriage law through the state legislature last year, thanks in part to help from socially liberal Republicans on Wall Street.