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Why Wall Street supports politicians who swear never to help again

The only reason Wall Street exists today is because Barack Obama linked arms with George W. Bush to help pass TARP. The only reason the Republicans are likely to take the House next month is because they have successfully pinned TARP on the Democrats and have sworn -- including on Page 2 of their pledge -- to never allow another bailout. Yet Wall Street money is rushing toward the GOP. Rushing, in other words, to the very people who've pledged not to save them again if anything should go wrong. Max Abelson reports on the thinking:

"What people care about is they want a more pro-business regime -- that's it," one of the city's most important hedge fund managers said in a very brief interview.

But between dread about sovereign debt, the housing market, unemployment, third-quarter losses and deflation -- if not inflation, too -- it does not seem impossible that another financial crisis could somehow happen again. And if Wall Street gets its way, it will have nudged into power a party that has deafeningly proclaimed the evils of government intervention.

Does Wall Street's support of a party that's openly pledged not to save them mean it has accepted it shouldn't be bailed out again? Interviews with executives suggested not, for three reasons. They think that another crisis won't happen, or that if it does, they will not need another bailout because of reforms, or that if they do, our country's leaders would oblige, no matter who's in power.

By Ezra Klein  | October 7, 2010; 1:25 PM ET
 
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Comments

Why would you would take seriously the words coming out of the mouths of politicians?

Of course they (Democrats or Republicans) will bail out Wall Street again, and again and again if necessary. Everyone knows it, nobody more than these people on Wall Street. Your quoting of their having "openly pledged" not to do so comes from actually listening to what they say and taking it seriously, which I find hilarious.

Though, in fairness, I imagine it would be tough to just come here and write "this guy is full of s##t...

Posted by: zeppelin003 | October 7, 2010 1:52 PM | Report abuse

So...these Wall Street people want a tax cut and a bail-out?

I guess that's what everyone wants. But they are pretty brazen about it and also seem likely to get it and that is what get's me upset. Where is the sense of responsibility to fellow citizens?

Posted by: ideallydc | October 7, 2010 2:33 PM | Report abuse

Because they think they own them regardless of what they say, and they count on there being enough responsible adults in the Dem Party to pass what is needed. It's a con game, really.

Posted by: Mimikatz | October 7, 2010 2:56 PM | Report abuse

The bailout was a success (except for those who worked at Lehman). Now the focus is on the year end bonuses and the calculation is that the Republicans will somehow find a way to roll back some of the provisions of the Dodd/Frank bill (pipe dream if you ask me). It's all a short term calculation. Bigger question is without Federal backing, who will buy any new securitized mortgages? Answer: very few brave souls.

Posted by: agoldhammer | October 7, 2010 3:22 PM | Report abuse

Wall Street is the equivalent of the guy in Tennessee who didn't pay his fire department fee and then expected the fire department to come and help him when he needed in. And like the guy in Tennessee, whose reward for his studpidity is going to be a brand new house paid for by his insurance company, if Wall Street stuffs some more barrels full of trash and sets them on fire, they WILL be rescued again. Based on their own interest, thier position is totally rational. The problem is that the rest of the country is too d_mn dumb to understand that Wall Street's interest is not their interest. It's not only Kansas that has something the matter with it.

Posted by: guesswhosue | October 7, 2010 4:19 PM | Report abuse

Wall Street is the equivalent of the guy in Tennessee who didn't pay his fire department fee and then expected the fire department to come and help him when he needed in. And like the guy in Tennessee, whose reward for his studpidity is going to be a brand new house paid for by his insurance company, if Wall Street stuffs some more barrels full of trash and sets them on fire, they WILL be rescued again. Based on their own interest, thier position is totally rational. The problem is that the rest of the country is too d_mn dumb to understand that Wall Street's interest is not their interest. It's not only Kansas that has something the matter with it.

Posted by: guesswhosue | October 7, 2010 4:19 PM | Report abuse

Well the problem is that Wall St. has pretty successfully TURNED their interest into the whole country's. Our economy now runs on debt -- securitized debt that is entirely structured around big financial institutions. Our financial safety net has similarly transitioned away from defined, contractual benefits like pensions to assets like houses and various retirement funds. So again, if Wall Street implodes, so does your financial future.

Posted by: NS12345 | October 7, 2010 5:29 PM | Report abuse

Because Wall Street owns the Republican Party. Or a piece of it at least.

Posted by: krazen1211 | October 7, 2010 6:26 PM | Report abuse

Because Wall Street owns the Republican Party. Or a piece of it at least.

Posted by: krazen1211 | October 7, 2010 6:26 PM | Report abuse

This is about having a compliant congress. If wall street needs another TARP, they will get one. There is no doubt in my mind, that, knowing what they know now, Congress would approve TARP all over again. It was one of those things where congressmen were simply "allowed" to vote against it, as long as it would ultimately pass.

saying you're against TARP is like saying you are against dropping the bomb on Japan: sure, you can SAY that, but it already happened, and everyone knows that if the same scenario comes up a second time, they'd do it again.

Posted by: constans | October 7, 2010 8:46 PM | Report abuse

This is the clincher: ...if they do [need another bailout], our country's leaders would oblige, no matter who's in power.

And the Republicans will oblige them in many other ways, so what's not to love about them?

Posted by: julie18 | October 8, 2010 10:58 AM | Report abuse

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