President Obama lit many liberals’ hearts aflutter when he told Marketwatch radio on Wednesday that restructuring Wall Street banks was “an unfinished piece of business.” But conservatives, too, likely welcomed the president’s indictment of bankers who take their bonuses while “everybody else is left holding the bag.” Putting tighter caps on the biggest banks, after all, has been one area of agreement between many Republicans and Democrats in an otherwise gridlocked Congress.
With the mid-term elections around the corner, and the presidential election campaign looming, it’s hard to see any issue where both sides will find common ground. But Obama’s criticism of big banks is a reminder that, perhaps more than ever before, there’s a growing and mutual skepticism of Wall Street and big corporations among Republicans and Democrats. And that economic populism could provide new momentum in Washington behind policies adverse to the interests of big companies, for better or for worse.
As Obama eyes "further reforms" for the biggest banks, Republicans are targeting the Export-Import Bank, a federal agency that provides subsidies to foreign companies looking to buy U.S.-manufactured goods. Many GOP lawmakers want to shut down or dramatically scale back Ex-Im, which they argue benefits big firms like Boeing and General Electric. It’s part of a growing rallying cry against "crony capitalism."
The surprising thing is that many on the left agree with Republicans about Ex-Im. On the record, the White House and Democrats are committed to preserving the agency, which needs to be reauthorized by Congress by Sept. 30. But you don't sense any love for the bank. In 2008, Obama called Ex-Im “little more than a fund for corporate welfare.” Left-leaning writers are also deeply skeptical of Ex-Im.
While there's long been some antipathy toward big companies and banks among certain Republicans and Democrats, it has seldom been so prominent. Bill Clinton brought Wall Street firmly into the Democratic tent. George W. Bush bailed out the banks. Obama surrounded himself with advisers trusting of Wall Street and avoided any efforts to radically reshape the industry, though he did sign legislation into law aimed at making the financial system better regulated, and thus safer.
The meager economic recovery for average Americans -- in contrast to record corporate profits and the booming stock market -- has left many Americans deeply skeptical of, and angry at, those political choices. Skepticism of big banks and corporations fueled support for David Brat, who ousted House Majority Leader Eric Cantor (R-Va.) in the GOP primary last month, and it has propelled the career of Sen. Elizabeth Warren (D-Mass.).
Seventy-eight percent of Americans — including 71 percent of “steadfast conservatives” and 88 percent of conservative-leaning young Americans — say too much power is concentrated in the hands of a few large companies, according to a major new poll by the Pew Research Center last month.
If lawmakers were to move on legislation targeting banks or big companies, the details would still most likely divide them. But a few issues could bring both sides together. New limits on the biggest Wall Street banks certainly could be in the offing. And it sure seems like companies that depend on Ex-Im should expect a radically different future.
Thinking bigger, perhaps animus toward big business will unify lawmaker enough to craft a deal to overhaul the corporate tax code, which is full of deductions and loopholes won by corporations employing lobbyists. Or it could spur new action to loosen the current patent system, which arguably stifles innovation.
Banks and big companies would have a long list of arguments against measures like these. Hit Wall Street too hard, and the United States could lose an important competitive advantage: the most versatile capital markets in the world. Kill Ex-Im, and hundreds of small businesses could lose out. Ending loopholes sounds great in the abstract, but there are workers at every company who benefit from a tax break. And if you do reduce patent protections, you can be sure that some companies won’t invest as much in research and development.
Some of these are good arguments against the economic populism building in Washington today. But corporate America and Wall Street should be on notice: They are facing a newly emerging threat -- from the White House to the tea party.