Updated: Before their fall, Wall Street titans spent big on Barack Obama, John McCain, other pols

As Merrill Lynch and Lehman Brothers shrivel into history, Barack Obama, John McCain and many other politicians are calling for more Wall Street regulation.

Perhaps campaign donations shelled out by both firms had something to do with the current state of the law.

Before being taken over by Bank of America, Merrill executives and employees had contributed almost $2.1 million to federal candidates and parties since the start of 2007, according to Federal Election Commission records, gleaned from Congressional Quarterly's Moneyline database.

Lehman employees, seeking bankruptcy protection, added $1.9 million.

Insurance giant AIG, a third firm reeling under the weight of bad mortgage loans, kicked in $664,000.

Not surprisingly, Obama and McCain took in top dollar from the three firms: $625,409 for Obama and $579,000 for McCain. Obama’s running mate, Joe Biden, received another $48,975.

There were no contributions listed for McCain's running mate, Sarah Palin, for a simple reason: She never before sought federal office.

McCain has at least three major volunteer fundraisers who bundle donations from others on Wall Street and environs. McCain voluntarily discloses the occupations of his bundlers. Obama does not.

Merrill Chief Executive, John Thain, is among McCain's bundlers and has donated $32,700 to various McCain-related committees. Thain's predecessor, Stanley O'Neal, was a $2,300 Obama donor.

Other major recipients in 2007-2008 include Sen. Hillary Clinton ($516,750), former New York City Mayor Rudolph Giuliani ($340,550), and Connecticut Sen. Christopher Dodd ($195,300).

Many Wall Street donors, such as Lehman Chief Executive Richard S. Fuld, gave to both sides, $2,300 to Obama and the same to McCain.

Fuld also gave $10,000 to the Republican Senatorial Campaign Committee and $10,000 to the Democratic Senatorial Campaign Committee. He gave most of his donations in 2007, back when times weren’t quite so tough.

[UPDATE]: Obama spokesman Ben Labolt charged that McCain has taken money from political action committees representing the financial services and insurance industries, while Obama has refused such money in the presidential campaign.

"Obama has consistently called for stepped up oversight of our financial markets to prevent the crisis that we face today," Labolt said.

-- Dan Morain

Comments

[Robert Dale]

How does one get a job writing for this newspaper?

Don't tell me it has anything to do with journalistic ability.

Yes Dan, Rich people contribute to political campaigns, Congratulations for figuring that out. But it was lax enforcement and deregulation that allowed the current mess. Start with Phil Gramm under Reagan producing the ideas, and work your way forward Bush's appointed cronies implimenting them and you will see what caused our current trouble. Its a lot easier in hindsight. But not as easy, I wager as looking at current campaign contributions and blaming people who had no hand in writing or enforcing the current laws.

[jeremiah]

Fact is, the economy was doing just fine until the Democrats took control of Congress 2 years ago. The economy has gone to hell in a handbasket since then. Where is the Congressional oversight of Wall Street?

[Campbell]

Obama has never called for stepped up oversight of our financial markets. Obama is good at coping statements or an occasional one liner but Obama's financial experience is as limited and indecisive as his voting record.

[Young Atheart]

Wrecking the economy is an accomplishment too great to blame on a nearly inept, 2 year old democratic congress.

No, this took many years of sweat at the gates of trickle down economics and blind deregulation -- which McCain/Palin now want to double down on. Their continued work will finally pull the middle-class in to a decade long vortex of declining wages and rising costs while America's biggest companies relocate to Asia.

[BerkshireHathaway]

Really? the Economy was doing just fine in 2006? How the heck do you think the Dems won a majority in the first place?
The real Fact is that it started turning sour by 2001, was buoyed and hyper-inflated by rampant fraud,false profits and sweeping deregulation in the credit markets.

the economy in 2006:

* Economic growth slipped to 2.0 percent in the third quarter, following 2.6 percent growth in the second quarter and a surprisingly strong first quarter growth of 5.6 percent. This was the first time in more than three years that the economy registered two consecutive quarters of growth below three percent.
* Consumption growth also slipped. Consumption growth was 2.8 percent in the third quarter following a 2.6 percent increase in the second quarter. Again, this was the first time in more than three years that consumption growth was below three percent in two consecutive quarters.
* Retail sales weakened. From June 2006 to November 2006, retail sales grew each month on average by an annualized rate of 4.2 percent, down from 6.4 percent in the first six months of 2006.

The labor market weakened:

* Job growth continued to drop. In 2006, the economy added on average 149,000 new jobs per month, down from 165,000 new jobs in 2005 and 175,000 in 2004. Job growth was 14.5 percent slower in 2006 than in 2004, the year with the highest job growth in this business cycle, which started in March 2001.
* Wages made up a record low share of national income. In the third quarter, wages and salaries made up 51.4 percent of national income, the smallest share since the U.S. government began to collect this data in 1947. Total compensation, which includes benefits, dropped to the lowest share in nine years. At the same time, profits grew to the largest share of national income since 1947.

The housing boom ended:

* Home appreciations decreased. In the first three quarters of 2006, the prices of all homes grew on average by an annualized rate of 5.9 percent, the lowest growth rate in any year since 1999, down from 12.5 percent in 2005 and 11.2 percent in 2004.
* Homes no longer flew off the market. The supply of homes for sale each month averaged 6.9 months of supply for the six months ending in October 2006—the largest average supply since 1991.

Consumers felt the pinch of record debt:

* Consumer debt soared to new heights. Household debt relative to disposable income continued to rise throughout 2006, reaching a record 130.9 percent by the end of the third quarter.
* Debt payments rose to highest on record. In the second quarter of 2006, families had to spend 14.4 percent of their disposable income to service their debt—the largest share since 1980.
* Families felt the pinch. Mortgage delinquencies rose to 4.7 percent of all mortgages in the third quarter, up from 4.4 percent in the first and second quarter of 2006. The share of all mortgages in foreclosure grew to 1.1 percent of all mortgages, the highest level since the first quarter of 2005. The default rate on credit cards also rose, to 3.9 percent in the third quarter, up from 3.5 percent in the second quarter, and 3.0 percent in the first quarter. And there were 2.2 bankruptcy cases per 1,000 people in the third quarter, up from 2.0 cases in the second quarter and 1.5 cases in the first quarter—an alarming rise.

U.S. still imports vastly more than it exports:

* The trade deficit widened. By the third quarter of 2006, the difference between imports and exports had grown again to over six percent of Gross Domestic product, a feat only accomplished once since the Great Depression (in the fourth quarter of 2005).
* At the heart of the widening trade deficit was America’s dependence on foreign oil. During the first 10 months of 2006, the deficit in petroleum-related goods grew by $46.1 billion relative to the same period in 2005—or almost twice as much as the deficit with China.

The U.S. government owes massive debt to foreigners:

* The federal government remained awash in red ink. For 2006, the expected federal deficit is $260 billion. Making the Bush administration’s tax cuts permanent and introducing relief from the Alternative Minimum Tax would carry the deficit to $3.5 trillion over the next decade, according to the Center on Budget and Policy Priorities. In this scenario, the federal deficit would never dip below $284 billion, even if the costs of the war in Iraq and Afghanistan decline.
* Foreigners financed vast shares of the federal budget deficit. Since March 2001, when the current business cycle started, foreign investors financed 77.9 percent of the federal budget deficit. The share of Treasuries held by foreigners grew to 45.0 percent at the end of the third quarter, up from 43.8 percent in the first quarter, and 44.6 percent in the second quarter.
* The U.S. Treasury sent more money abroad. Interest payments by the federal government to foreign lenders grew to $37.3 billion in the third quarter of 2006, up from $36.4 billion in the second quarter, and $32.8 billion in the first quarter.

[Jeff]

Fact is, the economy was doing just fine until the Republicans took control of Congress and the white house 8 years ago. The economy has gone to hell in a handbasket since then. Where is the Congressional oversight of Wall Street?

[politicallysavvy]

RESPONSE TO:" ...the economy was doing just fine until the Democrats took control of Congress 2 years ago. The economy has gone to hell in a handbasket since then." posted by Jeremiah
____________
Just one more Republican trying to blame the Democrats for our current economic woes that has absolutely no basis in reality. Dream on! When Bush took over from Bill Clinton unemployment was at 4.2 and is now at 6.1; in 2000 there was a 281 billion SURPLUS and in 2008 there is a 357 billion DEFICIT; in 2000 there was 5.7 trillion in debt and in 2008 there is 9.7 trillion in debt. When the Democrats took over Congress in 2006, they did so with a razor-thin majority contributing to much of the current stagnation due to the miniscule lead: House - 233 Democrats to 202 Republicans; Senate 49 Democrats to 49 Republicans with 2 independents. The Democratic control was only nominal especially with an equally divided Senate. Your accusation of Democrats "taking control" and ruining the economy is baseless and without merit. In the last 7 years, Republicans repeatedly stalled or filibustered Democratic legislation that would have regulated banking, small businesses and corporate entities. Republicans have done everything to curtail federal regulatory powers which they view as harmful. Do we want 4 more years of this Republican nonsense?

[Andy]

It looks very likely that Obama will win and Democrats will gain additional seats. Political preferences aside, history says that a unified government is bad for markets. And the impact will be dramatically worse than historical precedent if Obama's "21st-century regulatory framework" is applied. In his view, the global financial crisis is the result of US deregulation and Wall Street greed. This diagnosis is dangerously wrong. It looks very likely that Obama will win and Democrats will gain additional seats. Political preferences aside, history says that a unified government is bad for markets. And the impact will be dramatically worse than historical precedent if Obama's "21st-century regulatory framework" is applied. In his view, the global financial crisis is the result of US deregulation and Wall Street greed. This diagnosis is dangerously wrong. See why :
http://www.savingtoinvest.com/2008/10/my-rant-on-obama-wall-street-greed.html