Later this morning, Reshma Saujani will officially launch her public advocate campaign, an ambitious bid for one of two competitive citywide races this year. But as she lays out her agenda, it won’t be the same Reshma Saujani politicos remember from her 2010 primary against Upper East Side Congresswoman Carolyn Maloney. In that campaign, she embraced her “Pro-Wall Street Democrat” label, but now, Ms. Saujani says she’s focused on a whole new slate of issues.
“Oh my God, so much!” she told Politicker when asked if she’s learned from her experiences since then, including a stint in the public advocate’s office. “Since 2010, I have a record–a progressive record–of accomplishment. There are people in the city who I have helped put on a path of economic prosperity, that are in college because I fought for them. There are people in jobs because I fought for them … In 2010, that was harder to demonstrate, right? Because I was working as a lawyer in the private sector.”
After Vice President Joe Biden infamously told an audience that Mitt Romney is “going to unchain Wall Street,” and concluded they are “going to put y’all back in chains,” Mr. Romney’s campaign cried foul. This was an obvious and unfair allusion to slavery, Mr. Romney’s surrogates argued.
Well, count veteran Congressman Charlie Rangel among Mr. Biden’s critics on the Democratic side of the aisle.
“The Vice President said he’s going to put “y’all in chains,’” Mr. Rangel told The Perez Notes in a recent free-wheeling interview. “Was he talking about slavery? You bet your ass he was. Was he using the vernacular? Yes, he was. Did he think it was cute? Yes, he did. Was it something stupid to say? You bet your life it was stupid.”
President Barack Obama has gone on the attack against Mitt Romney for his career at the private equity firm Bain Capital and cast himself as an aggressive crusader for reform in the financial industry, but he took decidedly more friendly tone toward big business last night at a fundraiser hosted by Hamilton “Tony” James, President and COO of the private equity giant Blackstone Group. In his speech at Mr. James’ home in Manhattan, the president argued his focus on social programs is actually better for big business than the Republicans’ push for more tax cuts.
“I think all of us benefit from the freedom of free enterprise. But if you look at our history, what we also realize is that what makes our markets work and what allows us then to go out and pursue our individual dreams is that there are some things we’ve done in concert,” President Obama said. “There are some things that we’ve done as a common enterprise — making sure that our schools are teaching our kids the skills that they need to compete in a new economy; making certain that we’re investing in science and research so that the next medical breakthrough or the next great business idea takes root right here in the United States; making sure we’re investing in roads and bridges and airports and broadband lines and wireless networks that allow–that provide a platform for businesses and individuals to succeed; and making sure that we’ve got basic rules of the road in place so that the markets function in a transparent, clear way so that small investors have confidence if they invest on Wall Street they’re not going to get bilked by somebody who has more information than them.”
As Air Force Once flew President Barack Obama to New York for a commencement speech at Barnard College, a pair of fundraisers and a taping of The View, White House Press Secretary Jay Carney held a brief mid-air gaggle with reporters where he discussed J.P. Morgan’s $2 billion loss. Though Mr. Carney would not comment on the S.E.C.’s investigationinto the firm, he said the incident proves the need for the Dodd-Frank Wall Street reform bill that was signed into law by the president in 2010.
“What I can say is this event reinforces why it is so important to pass Wall Street reform,” Mr. Carney said according to the press pool report. “The president fought very hard against Republicans and Wall Street lobbyists to get Wall Street reform passed and also worked very hard to ensure the protection bureau was part of it and fought hard to make sure the Volcker rule was part of it.”
Today’s sudden revelation that J.P. Morgan lost $2 billion†had a lot of mouths hanging open, and while the detail’s of the company’s wagers gone wrong aren’t all present, Attorney General Eric Schneiderman argued on MSNBC that the case demonstrates the need of strengthening financial regulations.
“People talk about principles,” Mr. Schneiderman said. “There’s one principle: Unregulated markets always crash. Unregulated markets always produce massive losses on risky bets.”
Almost since the day Barack Obama was sworn in, Wall Street has been warning about the catastrophic consequences of his presidency on its industry and, by implication, on the economy and society beyond. Last year, their house organ, the editorial page of The Wall Street Journal, called the president “a determined man of the left whose goal is to redistribute much larger levels of income across society.” Steven Schwartzman of the Blackstone Group compared his efforts to raise taxes on private equity firms to Hitler’s invasion of Poland in 1939. And if the president wins re-election this fall, “we might as well leave the country,” one billionaire hedge funder proclaimed on CNBC earlier this year.
But Wall Street likes nothing if not winners, and now that Mr. Obama seems more of a favorite in November and the sharpest GOP strategists caution that taking over the Senate remains a longshot, attention among the titans of finance has turned to their last bulwark against runaway regulation: the House of Representatives.
The crux of the concern is the House Committee on Financial Services, through which some of the most critical regulatory legislation, including Sarbanes-Oxley and Dodd-Frank, has passed over the past decade. Because even if Republicans retake the White House, or snatch the Senate away from Democratic hands, it may not matter much for Wall Street if the House flips from Republican to Democrat and the House Banking Committee ends up in the hands of Maxine Waters, the 17-term Democrat from South-Central Los Angeles.
Wall Streeters say that the prospect of Ms. Waters at the helm of the Financial Services Committee could actually make them regret chasing Barney Frank—who was slated to retake the committee before he abruptly announced his retirement this year—out of Congress.
“Just the name,” said one financial industry lobbyist, “sends shivers up the spine.”
Citigroup CEO Vikram Pandit appeared alongside Mayor Michael Bloomberg today at a press conference announcing New York’s top rank in a Citi-commissioned Economic Intelligence Unit research report on the world’s most competitive cities. Mr. Pandit said Citigroup’s current “mission is to help the cities on this list and others compete on the global stage,” so The Politicker asked his thoughts on the Occupy Wall Street protesters and others who blame the financial industry for subverting the democratic process and spreading economic inequality.
“I think the starting point is we have about 24,000 people that are our colleagues in New York City that makes us, I think, the second largest employer in the city. We’ve been here 200 years through ups and downs in the markets and, as the mayor pointed out, the last two, three years have been challenging,” Mr. Pandit said. “It’s very understandable that when we have so many people who want to do more than they’re able to do, want to have the kind of jobs they aspire to, that does create a sense of frustration. And a lot of that anger has been directed at big banks and Wall Street, and that’s understandable too.”
Bonuses paid to New York City financial employees are expected to decline by 14 percent to $19.7 billion during this year’s bonus season, according to an estimate released today by State Comptroller Tom DiNapoli.
“Cash bonuses were down in 2011, reflecting a difficult year on Wall Street,” DiNapoli said. “Profits were down sharply and securities firms in New York City resumed downsizing in the second half of the year. The securities industry, which is a critical component of the economies of New York City and New York State, faces continued challenges as it works through the fallout from the financial crisis and adjusts to regulatory reforms.”
America’s biggest private equity companies have spent millions over the past five years lobbying to keep their tax rates low. Several major private equity firms, including Mitt Romney’s former employer, Bain Capital, have paid for lobbyists to fight for the carried interest tax break, which protects the profits-based compensation that makes up a large portion of private equity executives’ pay from regular tax rates. Carried interest became a hot button issue on the campaign trail when Mr. Romney revealed he pays a tax rate of just about 14.65 percent, in large part due to the low tax rates for carried interest.
The Private Equity & Growth Capital Council, which was formed in 2007 by several of the country’s largest private equity firms, quietly formed a political action committee last spring and began making campaign contributions this past summer. New York City Congressman Joe Crowley was one of the top Democratic beneficiaries of donations from the private equity PAC.