“That’s Where the Money is”

Posted on May 2, 2011. Filed under: Uncategorized |

Bank robber Willie Sutton, when asked why he robbed banks, once famously replied “because that’s where the money is.”

Now we’re not comparing President Obama’s fund raising operation to bank robbery, but there is a certain symmetry between Sutton’s remark and Obama’s recent efforts to cozy up to Wall Street. Let’s face it, President Obama has not exactly been Wall Street’s best friend, in turn bashing the financial sector as greedy and backing stricter government regulation.

In fact, feelings were so raw that one hedge fund manager said in a widely circulated email that he and his colleagues felt a bit like battered wives: “I am sure, if we are really nice and stay quiet, everything will be alright and the president will become more centrist and that all his tough talk is just words… I mean, he really loves us and when he beats us, he doesn’t mean it.”

So it was a bit surprising that dozens of Wall Streeters turned out at $38,500 each for a fund raiser the other day that netted the president’s reelection campaign between $2 million and $3 million. Obama wants to raise $1 billion for the campaign, a goal he is unlikely to reach without help from the financial services industry.

While some key Wall Street players who helped Obama in 2008 have reportedly turned their back on him – like Steven Cohen, Dan Loeb, and Kenneth Griffin – others have remained loyal. Bankers Orin Kramer and Evercore’s Ralph Schlosstein attended a recent Obama fundraiser and former New Jersey Gov. Jon Corzine, the ex-head of Goldman Sachs, hosted the fund raiser at his home that included a number of Wall Street bigs.

“People are worried about the future of the American dream,” President Obama told 60 donors at Corzine’s Manhattan digs, according to the New York Times’ Helene Cooper.

“Everybody here almost by definition has lived out that American dream,” he said. “The question is, will that same story be told by our children and grandchildren?” the president asked. “Will it be told by the folks who do all the work here in New York City and across the country?”

In the end, whether or not Wall Street warms to Obama’s reelection bid will depend on how the economy progresses between now and next year. While the economy has shown signs of awakening, high gasoline prices, severe storms and budget cuts could keep it from the kind of explosive growth that would surely propel Obama to a second term.

Federal Reserve Chairman Ben S. Bernanke, during his first ever press conference last week, said the Fed expects the economy to maintain solid growth in the 3 percent range this year, despite sub-par growth of less than 2 percent during the first quarter of the year. Still, he sounded at least a bit encouraging, noting that while the cost of gas and food have increased in recent months, the increased fuel costs have not yet been passed along to consumers and inflation trends do not appear troubling.

But the trends report most critical to handicapping Obama’s reelection chances is most likely the Federal Election Commission report for next quarter, which won’t be here until the summer. That’s when we’ll learn if Obama’s strategy is paying off where the money is.

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