Sen. Barack Obama has made a big deal of his refusal to take money from lobbyists, but he’s been quieter on another campaign finance fact: from the industries behind our financial crisis, Obama has taken much more money than John McCain has. Now, with his open-ended and unspecific calls for new financial regulations, Obama has issued a dog-whistle call to financial firms and their lobbyists.
On Tuesday night, in the second debate, Obama answered a question on the economy by stating, “we’re going to have to change the culture in Washington so that lobbyists and special interests aren’t driving the process and your voices aren’t being drowned out.” He’s absolutely correct. Wall Street and banks have outsize influence in Washington, driving policies (pushed by both parties) that helped lead to our current mess.
But Obama is pretty cozy with those industries: According to the Center for Responsive Politics, Obama has received more than John McCain in donations from commercial banks ($2.4 million to $2.1 million), hedge funds and private equity ($2.2 million to $1.5 million), and securities and investment ($10.9 million to $7.6 million). Obama’s lead over McCain in this last category (which is basically Wall Street) is more than twice all the money ($914,000) McCain has taken from lobbyists.
The top two Wall Street donors this cycle, Goldman Sachs and Morgan Stanley, have both favored Obama—Goldman by a three-to-one ratio. Of course, Obama is the second-leading recipient of Fannie Mae money in history.
Obama talks tough on the finance industry, but he curiously stays vague. Obama spent the entire first portion of the debate Tuesday calling for more regulation of the financial sector without providing specifics. In his first four answers Tuesday night, Obama used the word “regulate” (or some variation) seven times.
Specifics? His website calls for bankruptcy reform and curbs on “predatory lending,” but that’s as close as he gets to Wall Street. McCain, perhaps because of his own unease on the economic front—and perhaps because he is himself a regulation fan—has not asked Obama the relevant questions here: Just which regulation Republicans “shredded” to cause our crisis? Just which regulations would Obama push?
The result, if things don’t change, is that Obama will enter the White House with a broad mandate to regulate the economy, and with no articulated plan. Declaring I’m going to regulate the financial sector, but I’m not yet sure how, is tantamount to ringing a dinner bell for lobbyists; and his donors’ lobbyists will answer.
Obama is not likely so naïve as to believe that big business and lobbyists universally lobby to be left alone and are staunch opponents of regulation. To begin with, Wall Street’s regulator, the Securities and Exchange Commission (SEC), was created, according to the SEC’s website, “to restore investor confidence in our capital markets.” In other words, Wall Street regulation was initially created by Wall Street in order to drive more capital to Wall Street. The campaign finance numbers cited above confirm the financial firms aren’t all laissez-faire types—especially not their lobbyists.
Increasing government control over the financial sector inevitably increases the influence these lobbyists have. Nobody expects Obama to back down from regulating, and so if he wants to keep lobbyists from taking control of the show, he needs to give specifics.
Here, recall the words of Congressman Charlie Rangel. The Harlem Democrat—a master at raising funds from Wall Street, banks, developers, and nearly everyone else affected by his work as chairman of the tax-writing Ways & Means Committee—when asked how he would change tax law, responded, “I have to say everything is on the table.” That’s a dog-whistle to the companies and lobbyists: Come-a-calling, with bundled cash in hand, because I can either make or break you.
There is no reason to assume Obama is playing the same game as Rangel, and there’s little hope anyone can convince him not to push a raft of new regulations. Therefore, it’s McCain’s and the media’s job to make Obama get deeper than his vague attacks on “deregulation” and his broad promise to regulate.
As long as Obama leaves “everything on the table,” he’s handing the keys over to lobbyists for the financial firms that have favored him in this election—and gotten us into this mess in the first place.
Examiner columnist Timothy P. Carney is editor of the Evans-Novak Political Report. His Examiner column appears on Fridays.
