Thursday, May 24, 2012

Obama's Economic Attacks Could Backfire

At the New York Times, "Strategy on Rival’s Career Holds Pitfalls for President":

Last week, a few dozen hedge fund and investment executives arrived at the Park Avenue home of Hamilton E. James, president of the private equity firm Blackstone. Each had paid $35,800 to spend two hours at a fund-raiser with President Obama, but the timing proved awkward: A few hours earlier, Mr. Obama’s campaign had begun a blistering attack on Mitt Romney’s career in private equity, the same business in which Mr. James has earned his many millions.

“Campaigns do what campaigns have to do,” Mr. James later told friends. But not everyone was as forgiving. “People were incredulous,” said one person who attended the dinner. “They could have waited a week.”

Debates over how much to blame — and regulate — Wall Street have stoked tensions between Democrats and the financial industry ever since Mr. Obama took office amid a financial crisis. But now Mr. Obama is leveraging his bully pulpit and advertising dollars to argue that Mr. Romney’s career as a successful financial executive exhibited values that are not those of a good president.

In doing so, he has not only drawn criticism from allies like Steven L. Rattner, the investor and former adviser on the auto industry, and Cory A. Booker, the mayor of Newark and a favorite of New York’s hedge fund world. Mr. Obama may also be testing a bond first formed by Bill Clinton, who persuaded much of his party’s elite that Democrats could be both populist and friendly to Wall Street.

“I think the consensus, such as it was, has badly eroded under the pressure of events,” said William Galston, a former Clinton adviser who is now a senior fellow at the Brookings Institution. “The depth, the severity, and the length of the Great Recession have exacerbated strains within the country and within the Democratic coalition.”

For some Democrats, the line Mr. Obama is trying to walk — between asserting that Mr. Romney’s career at Bain Capital does not support his claim to be a job creator, and criticizing the private equity industry as a whole, between his acknowledgments of the vital role in the economy played by big investors and the scorching attack ads aired by his campaign — is a perilous one.

At stake are not only a political and policy relationship Democrats have nurtured over decades with the financial services industry, but the millions of dollars in campaign cash that have come with it. Already this year, securities and investment firms have given Republicans 59 percent of their donations, according to the Center for Responsive Politics, the party’s highest share since the center began tabulating campaign money. Mr. Obama has raised millions of dollars on Wall Street, but far less than he did four years ago.

It is one of the most delicate topics within the party these days. Two Democrats with close ties to Wall Street, Senators Charles E. Schumer and Kirsten E. Gillibrand of New York, declined to comment on Wednesday. Other lobbyists, donors and industry executives declined to speak for the record, saying they did not want to highlight internal divisions and debates.
There's also this big debate today on fiscal policy. Lonely Con has that: "Obama Flat Out Lied About His Spending." (Via Memeorandum.)