Why Obama Is Down and Romney Is Up on Wall Street
Jessica Rettig

More pro-business donors in the 'anybody-but-Obama' camp

He's met with the Donald (Trump, that is), and mingled with types like Jamie Dimon, CEO of JPMorgan Chase, in the past week. He's also attended high-priced Manhattan fundraisers in his honor. Former Mass. Gov. Mitt Romney, a onetime exec at private equity investment firm Bain Capital, is no stranger to Wall Street, and that's beginning to look like a real advantage as he continues his campaign for the presidency.

Obama's policies as president have been a disappointment for many in the business world, and his anti-rich rhetoric -- in 2009, for example, he called those on Wall Street "fat cat bankers" -- hasn't helped him win their favor either. That's been terrific so far for Romney, whose longtime business experience has reportedly put him on the receiving end of Obama's finance industry losses.

As many as 100 Wall Street donors, including many investors, who previously backed Obama in 2008 have switched to Romney's side, Bloomberg reported this week. And according to an insider familiar with Romney's recent fundraising efforts, the numbers from the next Federal Election Committee filing period which ends Friday (September 30), should show even better support from individuals on Wall Street for the campaign.

Romney -- and pretty much everyone else in the 2012 Republican nomination field -- is winning the financial industry by default, says Mike Green, a partner at La Jolla, Calif.-based Benham and Green Capital Management. It's been popular on Wall Street and among those who work in financial services around the nation to be in the "anybody-but-Obama camp," he says, largely due to the uncertainty that Obama-sponsored legislation, like the healthcare law and the Dodd-Frank financial reform law, has introduced to the business world. Obama's oft-expressed desire to raise taxes on high earners has also debased some old support from the industry.

Notably, Green says that Obama's policies shouldn't have been a surprise to the business world since they were apparent even before his 2008 presidential run. "Everything in his past said he was going to be bad for business," he says. "All that was always there. Why people didn't see it is beyond me."

During the 2008 campaign, Obama convinced voters, and many of his Wall Street donors, that his leadership would be good for the economy, according to Phil Levy, a scholar at the conservative American Enterprise Institute. Since taking the presidency, however, Obama hasn't been able to commit to the pro-business policies that some had expected or that helped past Democratic president Bill Clinton strengthen the economy, he says. "President Obama did a masterful job as a candidate of being all things to all people," Levy says, adding that Obama's financial team during his last campaign, which included Clinton administration alums like former Treasury Secretary Larry Summers, had also given him extra credibility with the business community. "Part of what's happened is that both in polices and rhetoric he's done some things that have really alarmed Wall Street."

Obama's campaign has the help of super-rich mogul Warren Buffett, who's come out publicly in support of the president's policies and is scheduled to attend an Obama fundraiser Friday. In addition, the campaign says that Obama has made up for his lost supporters on Wall Street with roughly 230,000 new donors from all over the country that he didn't have in 2008. Indeed, as the majority of Obama's backers through the second quarter funded him in smaller amounts ($250 or less), he still retained high-dollar financial support from individuals on Wall Street and the broader business world. "It's no surprise that the Romney campaign is raising money from Wall Street by saying they want to repeal consumer protections and allow Wall Street to write its own rules," Obama spokesman Ben LaBolt said in a statement. "The President has attracted support from Americans across the country, including business leaders, who recognize the President's leadership in putting us on a path to recovery and laying the foundation for a fairer economy -- and believe we should pass his plan to create jobs and provide middle class security."

Even so, according to Bill Whalen, a fellow at the conservative-leaning Hoover Institution at Stanford University, it will be tough for Obama to win back Wall Street's lost confidence given his record. "The financial community has to make a call based on what he's done the last four years, and what the president will do in the next four years. Obviously they're not pleased in the direction he has gone and they're very uncomfortable with the thought of what he might do next," he says.

Where Obama has moved away from Wall Street's interests since the last campaign, Romney, by contrast, has spent much of the last few years demonstrating he's on the same page, Whalen says. Though he wasn't technically on Wall Street, his work as a venture capitalist for Bain Capital has earned him the designation of "turnaround specialist" by some in the financial industry, an attribute that sets him apart from others in the GOP field, like Texas Gov. Rick Perry, his top competitor. Romney's 25 years in the private sector working with top businesses also provides him with an influential, nationwide network that may not be as accessible for Obama or the longtime Texas politician. "He's been part and parcel to capitalism," says Whalen. "Part of Romney's sales pitch is that he can go in and speak the language, no interpreter necessary."

Romney's past support for an individual mandate in Massachusetts' state healthcare plan does raise some flags among the conservative business community and could influence where he stands among the rest of the primary players, says Green. However, since most businesses outside Massachusetts are concerned with the federal healthcare law, Romney's pledge to undo it upon taking office, on top of his pro-business jobs plan, makes him electable, he says.

His laid-back strategy also seems to be helping him with big business and Wall Street, as others in the race, including Obama, have come under the gun for aggressive policy or bold statements, according to GOP strategist Cheri Jacobus, who is not aligned with any 2012 presidential campaigns. "People are very comfortable with him. He's not winning by leaps and bounds. He is winning incrementally by being trusted, solid, reliable, consistent. And when you're looking for somebody to fix the economy, those are some pretty darn good qualities to have," she says. "Wall Street wants stability. I don't think they buy so much into the slogan of hope and change."