Krugman: The Waaaaah Street Factor

[eridani]

http://krugman.blogs.nytimes.com/2015/10/14/the-waaaaah-street-factor/?_r=2

Following up on my point about how this is looking like a Dodd-Frank election: to understand what’s going on this election cycle, you really need to know about the dramatic shift in Wall Street’s political preferences.

There was a time when Wall Street was quite favorable to Democrats. Partly this was probably cultural: finance does, after all, center in New York, it tends to be fairly liberal on social issues, and it’s not comfortable with what Ben Bernanke calls the “knuckle-draggers.” Partly it reflects the reality that the economy has tended to do better under Democrats. And for a long time, to be frank, Democrats were all too willing to go along with financial deregulation.

But that all changed in 2010, when Democrats actually pushed through a significant although far from adequate financial reform, and Barack Obama said the obvious, that some financial types had behaved badly and helped cause the crisis. The result was a great freakout — the coming of “Obama rage”.

Wall Street doesn’t like the regulations, which really do seem to have more or less eliminated the implicit too-big-to-fail subsidy. Beyond that, with great wealth comes great pettiness: financial tycoons are accustomed to constant deference, and they went berserk at even the mild criticism they faced.