Wall Street is pulling the plug on political donations over the Capitol riots – this is why it matters

Wall Street has a strong stomach. It regularly turns a blind eye to grifters, graft, all sorts of bad behaviour. If your money’s good then you’re good when it comes to the street of dreams.

Yet last week’s armed insurrection in Washington has caused even the kingpins of American capitalism to draw breath. Red in tooth and claw their system maybe, but the blood that was spilled by the demonstrators was too red and the claws raked over the US Capitol were too sharp even for them.  

The result is that a string of big donors, from banking giants like Morgan Stanley, Goldman Sachs and Citi to corporate titans ranging from Amazon to AT&T to Microsoft, have announced that they’re pressing the pause button and keeping their corporate credit cards in their wallets and purses.  

Hallmark, the card company, even went so far as to ask the now infamous Senator Josh Hawley, who pumped his fist towards the MAGA crowds before objecting to the results of the free and fair election that delivered the presidency to Joe Biden, to return its $9,000.

Roger Marshall, a less high profile colleague of Hawley’s, who was nonetheless among the minority of Republican senators standing with him, came in for the same treatment.  

The corporate lobby’s collective action has been noticed in a system where elected representatives’ fund raising ability is almost as important as their political positions, and can take up as much of their time as the business of legislating.

Corporates can usually be relied upon to keep the taps flowing come what may for the purposes of keeping phone lines open when issues of concern to them come up for debate.

The message to elected representatives? Do your thing, just keep your tanks off our lawn and make sure you listen to our lobbyists when one of your friends tries to park them in front of our HQ.

Taking overt political action is usually anathema. Hallmark was an outlier in that respect. Some donors have simply suspended all donations, which will affect Democrats and the Republican Party’s semi-sensible wing, as well as the Donald Trump sycophants who travelled uncomfortably close to the riotous mob in the days before it was unleashed (and three congressmen are facing accusations of playing a role in its leadership).  

If you were feeling very charitable, this could be interpreted as urging all the various factions within the two main parties to “play nice”. It could just as easily be seen as an act of cowardice.  

Another faction has gone further (although not as far as Hallmark), specifically targeting the Republican congressmen and senators who sought to overturn the election result for boycotts.  

The National Association of Manufacturers, once a reliable Trump supporter, meanwhile, rounded on “armed violent protestors who support the baseless claim by outgoing president Trump that he somehow won an election that he overwhelmingly lost”. Its president and CEO Jay Timmons said any elected leader defending him was “violating their oath to the constitution”. He even said Vice President Mike Pence should consider working with the cabinet to secure Trump’s removal under that fabled document’s 25th article.  

Talk radio network Cumulus, which airs some of the most vocal right wing shock jocks, including Mark Levin and Ben Shapiro, also warned employees at its 416 stations of endorsing misinformation about election fraud or using language promoting violent protest.

Given the role played by the medium in opening the rabbit hole - incendiary rhetoric delivers ratings and dollars and its biggest stars are the people who do that best - it was an eye opening move.

Cynics would, however, point out that with the election done, now is the slow season for political giving. There are nearly two years to go until the mid-terms. 

A good chunk of corporate donations are also done through trade bodies, which have tended to be more equivocal, harrumphing about talking to members before making decisions.

As for talk radio, sure, Cumulus might have said “cool it” when it comes to the election, but does anyone really believe that the caterwauling about deep states, socialist Democrats and the decline of the American republic is going to stop?

Still, money talks in American politics and so maybe these moves will at least lead to a pause for thought among some congressional leaders.  

After all, you’re in quite a state when Wall Street, talk radio and lobby groups have to help pull you back from the brink.