Wall Street Goes Blue

February 11, 2008

There's an interesting little article in today's Financial Times that says in 2007 Wall Street (the securities industry) donated more money to Democratic presidential candidates than to Republicans. This comes as a mild shock. because it's mostly been taken for granted that Wall Street and big business were strictly behind the GOP. So what's behind the shift?

Personally, I think there are two main effects at work:

1.) Everybody loves to back a winner. Particularly in an industry as competitive as investment banking, everyone wants to put his money on a winning horse. Since the  conventional hype has been that the Democrats will be the party in power next year, what you end up with is a shift toward the Blue. Not to say Wall Streeters are following the herd, just looking out for their hides. It could be beneficial to be on the side of whoever is in the White House next year, especially in an uncertain market.

2.) Wall Street is looking to the Democrats to right the economy. This is speculation more than anything, but Wall Street = money, and I can't believe financial people would vote in someone whom they think would be BAD for their industry or the economy. I can't believe anybody in their right mind would do that. Whether or not anyone can fix the U.S. economy remains to be seen, but obviously Wall Street thinks the Dems can.