Wall Street in the White House?

The Republican Party may have its doubts about Mitt Romney, but when it comes to Wall Street it is a completely different story. Financial executives are throwing their support, and their money, behind Romney's bid for the White House.

Figures released recently show Wall Street has shifted its support toward the former Massachusetts governor and away from Barack Obama, the US president.

"There may be an issue with regard to the Super PACs and transparency is a big issue. But money in America, at least in terms of campaign contributions, is seen as free speech. So it is up to the voter to do a little more research but it is quite obvious where the money is coming from. Money and politics is nothing new … Wall Street does play both sides, and the American voter knows that."

- Ford O'Connell, a Republican strategist

A campaign monitoring group found that in 2011 the leaders of six Wall Street giants gave nearly $2m to Romney's campaign.

They have also been joined by hedge fund managers and private equity leaders who have been pouring money into Romney's unofficial political action committee or Super PAC - the machine behind his now-infamous campaign attack ads.

It underscores the influence that Wall Street has on US politics. Romney himself is a former private equity executive.

And it is not just the Republicans. Obama won the presidency thanks in no small part to the investment firm Goldman Sachs - the biggest backer of his 2008 campaign.

And despite tough talk about reining-in the excesses of the bankers, Obama's government is peppered with former finance industry executives or figures close to Wall Street.

Among them is Timothy Geithner, the US treasury secretary who was criticised for his instrumental
role in ensuring big banks were paid in full from a taxpayer bailout of AIG insurance during the financial crisis.

"We are seeing a degradation of the political process. It used to be a joke that we have the best democracy or government money can buy. But it is no longer a joke, no longer said with humour but with bitterness by growing numbers of Americans. This is dividing the country politically, ideologically and ethically."

- Richard Wolff, an emeritus economics professor, University of Massachusetts

Then there is Larry Summers, who served as Obama's chief economic advisor. Under Bill Clinton, the former US president, Summers championed financial deregulation and later earned millions from Wall Street companies.

And all three of those who have served as Obama's chief of staff are former Wall Street executives.

The battle for and against controls on Wall Street has been raging for the last couple of decades.

More than 60 years of financial regulation under the Glass Steagall Act came to an end in 1999 after intense lobbying from the banking industry.

Many economists say the resulting increase in risky and fraudulent bank practices led to the financial crisis four years ago.

The banking industry again lobbied hard against tightening the rules, but eventually the Dodd-Frank Act was passed, which once again imposed, albeit limited, regulation.

Romney, however, has pledged to repeal the Dodd-Frank Act should he win in November, leaving no regulation whatsoever.

So, what role will Wall Street play in the 2012 election?

Joining Inside Story US 2012 with presenter Lisa Fletcher are guests: Ford O'Connell, a Republican strategist formerly with John McCain's campaign; Bob Biersack, a senior fellow at the Center for Responsive Politics, a group that monitors campaign funds; and Richard Wolff, an emeritus economics professor at the University of Massachusetts.

Visit Professor Wolff's social movement project, democracyatwork.info.

Permission to reprint Professor Wolff's writing and videos is granted on an individual basis. Please contact profwolff@rdwolff.com to request permission. We reserve the right to refuse or rescind permission at any time.