Obama and GOP both take risks in Wall Street attacks 

Both parties are courting political risk by trading sordid accusations over a pending financial services regulations bill -- including the risk of overplaying their hands.

For politicians, going after Wall Street is proving election year catnip. The parties are playing past the upcoming debate on financial industry overhaul, and laying markers for the November election. But it's a tough issue to sell to voters.

A new Gallup poll shows Americans split over whether the government should do more to regulate banks, with 46 percent favoring more regulation and 43 percent opposed. But asked whether they favor more regulation on Wall Street banks, 50 percent said yes to 36 percent who said no.

Finally, Washington politicians found someone nearly as hated as themselves to run against.

"This is the time for the very rich to find a bomb shelter," said Stephen Hess, a presidential scholar at the Brookings Institution.

But polls show that deeper than their disdain for Wall Street, voters are fed up with Washington phoniness and political posturing.

A new Pew Research Center poll measured the lowest favorable ratings for Congress -- 25 percent -- in a quarter century.

With Democrats in the majority, that is grim tidings for President Obama, who has intensified his own rhetoric favoring "Wall Street reform" and Thursday travels to New York City to deliver a speech on the matter.

It's a theme he's hitting hard as he campaigns for embattled Democrats, accusing Republicans of trying to protect the powerful industry on Wall Street at the expense of Main Street.

"The notion that we would settle for the status quo and create a situation in which Wall Street could gamble with somebody else's money, take exorbitant risks, and put the entire economy at risk, and force taxpayers to try to pick up the tab when things went south on them makes absolutely no sense," Obama said at a California fundraiser for Sen. Barbara Boxer.

For their part, Republicans are enthusiastically retailing details of Democrats' close ties to the financial services industry, noting that Goldman Sachs was Obama's top political contributor in the 2008 cycle with nearly a $1 million in donations and asking if Obama will return the money.

"Republicans risk looking soft on regulation if they oppose Obama," Hess said. "But there is still quite a defense to be made for market capitalists."

House Minority Leader John Boehner, R-Ohio, called Goldman, recently sued for fraud by the Securities and Exchange Commission, Obama's "top Wall Street ally." The investment bank on Tuesday reported jaw-dropping, first-quarter profits of $3.3 billion.

Republicans, questioning the timing of the SEC case, are demanding the agency produce records of any communication between the SEC, the Obama administration and other Democrats leading up to the lawsuit.

Clark Ervin, a political expert at the Aspen Institute, said there is little political downside for either party in demonizing Wall Street now, but said Congress should proceed carefully imposing new regulations.

"If they go overboard on regulation, it will injure not just Wall Street, but Main Street," Ervin said.

jmason@washingtonexaminer.com

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