Wall Street's pro-cyclical politics

In the wake of financial regulation moving its way through Congress, both the Washington Post and Politico have stories out on Wall Street's backlash against the Democrats.  The Post's lead: 

A revolt among big donors on Wall Street is hurting fundraising for the Democrats' two congressional campaign committees, with contributions from the world's financial capital down 65 percent from two years ago.

The drop in support comes from many of the same bankers, hedge fund executives and financial services chief executives who are most upset about the financial regulatory reform bill that House Democrats passed last week with almost no Republican support. The Senate expects to take up the measure this month.

This fundraising free fall from the New York area has left Democrats with diminished resources to defend their House and Senate majorities in November's midterm elections. Although the Democratic Senatorial Campaign Committee and the Democratic Congressional Campaign Committee have seen just a 16 percent drop in overall donations compared with this stage of the 2008 campaign, party leaders are concerned about the loss of big-dollar donors.

And now Politico: 

With the financial reform bill likely to hit President Barack Obama’s desk in coming weeks, Wall Street's top political players are warning Democrats to brace themselves for the next phase of the fight: the fundraising blowback.

Democrats who backed the bill  are finding big banks far less eager to host fundraisers and provide campaign cash heading into the tightly contested midterm elections this fall, insiders say.

Some banks, in fact, have discussed not attending or hosting fundraisers at all for the next few months. Goldman Sachs is already staying away from all fundraisers, according to two sources. The company would not comment.

“I think at least in the short term there is going to be a great deal of frustration with people who were beating the hell out of us — then turning around and asking for money,” said a senior executive of a Wall Street bank.

Based on these stories, when if the Democrats get hammered come November, expect a lot of pixels and ink spilled on the awesome power of the financial sector to get what it wants in Washington.  And don't believe a word of it. 

This is the lobbying equivalent of a good but struggling baseball club calling a team meeting right before they play the worst ballclub in the league.  That is to say, sports managers often save their rousing speeches before a game they're pretty likely to win, so they can claim that their motivation was what led their team to victory. 

As Charlie Cook notes, the Democrats are heading into a Category 5 political disaster come November.  This has nothing to do with FinReg, and everything to do with a struggling economy, an ecological disaster in the Gulf, fired-up conservatives, and disaffected liberals.  Wall Street antipathy is really the least of their problems. 

I'm laying this marker down now -- unless we see some shocking upsets among the New York delegation (the real target of Wall Street's ire), analysts who proclaim the awesome political power of financial sector will be doing so with sloppy facts and sloppy argumentation. 

In recent years, I've seen some very... let's say exaggerated arguments about the power of political lobbies in Washington.  They do possess political influence, but much of that influence rests on the perception that they can make or break electoral fortunes.  In Wall Street's case, however, they're pushing on a door that was already wide open. 

Which is not surprising.  Powerful interests tend to apportion their money to candidates they think will win.  Indeed, to use a term of art, Wall Street's political preferences appear to be -- dare I say it -- pro-cyclical. 

Daniel W. Drezner

Things ain't what they used to be.... but when were they? [UPDATED]

Two recent articles suggest that things in the ivory tower are really going downhill.  In the Boston Globe, Keith O'Brien notes that students aren't studying like they use to

It is a fundamental part of college education: the idea that young people don’t just learn from lectures, but on their own, holed up in the library with books and, perhaps, a trusty yellow highlighter. But new research, conducted by two California economics professors, shows that over the past five decades, the number of hours that the average college student studies each week has been steadily dropping. According to time-use surveys analyzed by professors Philip Babcock, at the University of California Santa Barbara, and Mindy Marks, at the University of California Riverside, the average student at a four-year college in 1961 studied about 24 hours a week. Today’s average student hits the books for just 14 hours.

Meanwhile, as Steve Walt noted, there's a new article by Lawrence Mead in the latest issue of Perspectives on Politics on "Scholasticism in Political Science."  (Full discosure:  I'm on the editorial board at PoP).  Mead argues that political scientists, "often address very narrow questions, and they are often preoccupied with method and past literature."  He demonstrates this by looking at the evolution of the American Political Science Review over the past few decades.  He ends with a plea for "political scientists to seek greater engagement with government" and for journalm editors to "shift research somewhat away from rigor and towards relevance." 

When I see essays and arguments claiming that things are going to hell in a handbasket in the academy, I get very leery.  I've heard this script before -- academics have been complaining about the decline of the academy since the days of Socrates. 

Sure enough, looking a bit deeper at both essays, it's not clear whether things are really so bad.  Deeper in O'Brien's article, for example, there's this small nugget of information: 

[T]he greatest decline in student studying took place before computers swept through colleges: Between 1961 and 1981, study times fell from 24.4 to 16.8 hours per week (and then, ultimately, to 14).

If the really big drop took place before 1981, then I'm not sure I buy the argument that things are worse now.  As the article notes, technological innovations like computers and the Internet have made students more productive with the time they do devote to studying. 

As for Mead's essay, well, again, there's less there than meets the eye.  His own data suggests two trends that somewhat blunt his initial argument.  First, one reason for greater specialization in political science nowadays is that there are just a lot more political scientists lying about in the profession.  Now I'm not a political theorist, but I vaguely recall someone somewhere saying that "the division of labor is limited by the extent of the market."  Mead wants political scientists to write for a broader audience -- a sentiment I partially share.  I'd like to see political scientists write both big and small, specific and general.  With more political scientists, it is possible to write more narrow, detailed work and actually have it read by an informed audience.  That ain't being a public intellectual, but it ain't nothing, either. 

More importantly, Mead's own data also suggests that this "scholasticism" trend peaked a decade ago and has been ebbing ever since.  The APSR data shows that after 1998 or so, more general and more empirical articles were published.  There are a lot of possible explanations for this contrary trend (shifts in the APSR editorship, the perestroika movement, the rise of poli sci blogs), but none of them are terribly persuasive.  Maybe, just maybe, things are naturally getting better. 

Shorter blog post:  the academy is not going to hell in a handbasket. 

UPDATE:  One last observation and link.  Mead argues: 

Anyone who has attended recent APSA conferences knows that the “audience” for many panels, even on the official program, is now no more than the panelists themselves.

Mayb e I'm going to different panels, but I honestly don't see this, either for panels I attend or for panels where I present.  And zombies aside, I don't pick particularly "sexy" topics to write or listen to either.  

On the other hand, Seth Masket's proposal for reforming APSA conference panels is officially the Most Awesome Idea Ever

Ian Waldie/Getty Images