Most Wall Street bankers traditionally are Democrats. If you follow the money from political donations at least. Over the course of the last decade, it’s changing. But traditionally New York’s capital markets are loaded with Dems.
A lot of people might think it has to do with a large proportion of Jews on Wall Street. They were shunned by blue blooded Republicans back in the early twentieth century. I don’t think that’s why.
Wall Street controls access to capital. What better way to control access to capital than to control the regulatory arms that oversee it? Dems ran Congress for years, until 1994. That”s why Wall Street sent there money to the left side of the aisle.
On the other hand, who needed the capital? Corporations. Traditionally they sent their money to the Republicans that tried to loosen the grip of regulation on them. There is a push-pull between banks and big corporations. Since the banks control the access to money, and control the regulators that oversee the monetary system, they can charge big fees to companies seeking to access that system. It’s a toll companies are forced to pay.
Imagine what would happen if the capital markets were made more transparent through better regulation. Perhaps corporations could disintermediate the banks and go directly to the marketplace. Maybe weighted costs of capital would come down and the costs for doing business cheaper?
Dodd Frank has done nothing to make our system safer or more transparent. It has restricted competition. It has escalated costs. Given the unfolding banking scandal over LIBOR in Europe, maybe it’s time to scrap Dodd-Frank, and scrap a lot of our regultory infrastructure and start over.
Big government only helps big entities, not the little guy. If you are interested in having a hyper competitive marketplace with lower costs and less impediment to the marketplace, maybe you ought to consider putting into office people that will make government smaller.