Obama Makes Up to Wall Street

This will no doubt embitter the Republicans who have already criticized Barack Obama for not having initiated judicial proceedings against the financial analysts responsible for the monumental collapse of the global economy in 2008: He is attempting to reconcile with Wall Street. A few weeks before launching his re-election campaign, the 44th president of the United States invited twelve financial analysts who support the Democratic Party to the White House for a one hour discussion during which questions and criticisms were encouraged. After the meeting, the president even called those who had not been able to attend. This demonstrates a radical change from the time when Obama considered bankers on Wall Street “fat cats.”

In the coming months, the support of Wall Street, the primary source of funds for financing electoral campaigns, will be even more crucial. A billion dollars, a small fortune, must be raised.

This election will not be easy for Obama, who will likely be running against Mitt Romney, a former CEO in management consulting and the probable Republican candidate in November 2012. Obama will have to convince Wall Street, which traditionally favors Republicans, that his economic policy is far from unfavorable to the financial industry and has, on the contrary, assisted in repairing the economy or at least in stabilizing it from the brink of collapse since he entered the White House in January 2009. Particularly, he will remind them that he has saved a number of financial institutions from bankruptcy by organizing a significant rescue plan which cost his party several votes last November during the midterm elections.

Last month, Jim Messina, Barack Obama’s campaign manager, visited New York for a series of meetings with some of Wall Street’s key representatives, particularly those who had supported Hillary Clinton in 2008. Before the end of June, the 44th president will himself make a trip to New York. He has invited bankers, hedge fund managers and investment managers to dine with him at the very elegant Daniel’s. Dinner there costs $195 per person.

Despite the billions of dollars the Obama administration has spent to save the banks, it will take more to put him back in the good graces of financiers. To show his lack of enthusiasm this time, banker Steven Rattner — the economic backbone of the Quadrangle Group in New York and former U.S. Treasury Auto Industry Adviser — remains neutral. He raised more than $2 million in 2008 for Hillary Clinton.

Obama is counting on his Chief of Staff William Daley, a former executive at JP Morgan Chase, to help return the lost sheep to the fold. The probability of his reelection should nonetheless bring back the world of finance to life. Better to be on the winning side, even if the winner in the White House is a Democrat.