Gayle Tzemach Lemmon

Plenty of financiers supported the president in 2008, but investors I spoke with have decided that the man who rescued the economy isn’t the right one to lead its recovery

The financial services community swooned for President Obama four years ago and opened its collective wallet to offer him more than $16 million in campaign cash. This cycle its well-heeled members have ponied up far less for the president — contributions to the Obama campaign have barely reached $4 million, according to the Center for Responsive Politics – and many who backed the president last time say they don’t plan to again.

It’s not anger over Wall Street reforms that prompted their change of heart and vote, they say, but questions about the country’s economic future. And even while they remain queasy about former Gov. Mitt Romney’s socially conservative positions, including on gay marriage, and eager to hear focused and specific economic proposals rather than “59-point plans,” they say their desire for stronger economic leadership is leading them toward the GOP nominee.

“I don’t feel what I am about to express is a minority opinion; There are a lot of folks who feel disappointed with Obama,” says Dave Alpern, a private equity investor who voted for Obama in 2008. He donated to GOP nominee Sen. John McCain while his wife donated to Obama. “I bought off on the ‘let’s do things differently’ and ‘change is in the air.’ I found his message to be very inspiring.”

Now, not so much.

“The primary criticism I have of Obama is the business plan going forward from here. What do we do to solve major structural imbalances in the economy?” says Alpern. “There is just no plan around that. Everything Obama is now saying is, ‘Look at the Republican Party, those guys are worse,’ when to me there are some glaringly obvious things that need to be done. By avoiding specifics he is playing politics in a way that he told us we would not do. The entitlement reform math doesn’t work, period.”

WHAT MATTERS MORE: POLICY OR TONE?

The president irked a number of financial services players who once filled his coffers by coming out on “60 Minutes” and saying that he did not “run for office to help a bunch of fat cat bankers on Wall Street.” But after the Dodd-Frank bill passed two years ago, he has been attacked by a slew of heavy hitters, who continue to fight the Volcker Rule, a measure which places limits on proprietary trading. Other investors say that the political rhetoric was more damaging than any substantive legislative changes. Some even joke that if a form of the Volcker rule survives, it should be called the “Dimon Rule,” since it looked likely to go away until Jamie Dimon announced JP Morgan’s several-billion-dollar trading loss resulting from the debacle of the “London Whale.”

No one interviewed for this piece complained vigorously about the actual provisions of Dodd-Frank, though everyone noted it was an “imperfect bill.” Rather, they point to the “us versus them” personal nature and broad brush of the president’s rhetoric.

“That was the change, from the beginning of 2009 to the summer of 2010, you basically had the business community, especially the financial services community, go from saying, ‘this is a smart individual who gets it,'” to someone who “seemed to single-mindedly focus on attacking the financial community,” says a Boston-based investor who voted for Obama four years ago. “There is just this feeling across the financial services community, across the business community, that this guy hates us.”

For others, the rhetoric around Wall Street reform has nothing to do with their disappointment with the president. They simply don’t believe the president is willing to do what is needed to revive the sluggish US economy whose ill health now dominates the 2012 campaign discussion. Unemployment has remained stubbornly stuck above 8 percent for the last 40 months. The coming “fiscal cliff” threatens a return to recession while more than 40 percent of the nation’s nearly 13 million unemployed have been jobless for more than half the year. Even with a recent slightly upward revision, economic growth is tepid at best and too anemic to make a dent in unemployment.

“You have different CEOs for different times, and I think he was the right CEO for the Great Recession to come in and to be a uniter,” says Doyl Burkett, a Los Angeles-based private equity investor and registered independent who attended a Barbra Streisand fundraiser for the president last cycle before voting for him. But while Burkett credits the president for managing through the crisis, noting that, “this could have turned into a bank run, with unemployment in high double-digits,” more recent decisions, including the president’s failure to approve the Keystone Pipeline, has led him to question the president’s economic leadership. “I have been underwhelmed by his ability as leader to be the growth CEO. We just haven’t seen a bump in the economy under his stewardship and that is what gives me pause.”

Burkett is not a partisan and talks in detail about his reservations regarding social stances among Republican leaders, particularly on issues surrounding “women’s rights.” Yet the issue he keeps returning to is the economy, and on that front he struggles to see how the president could be the right “CEO” for the next four years.

“What gives me the most pause about voting for him this cycle is, who is the candidate least likely to put us in a position of having another pretty dire recession? And when I hear tax hikes starting to be discussed or I see the Obama administration being dismissive about them and saying they are ‘only going to affect people earning above $250,000,’ well, there are a decent number of small businesses that do fall into that realm,” Burkett says.

“I just don’t think we are in a position yet where you can put more restrictions on the economy. That is not to say you can’t have any restrictions on the economy,” he said, “but say there is an additional economic shock internally or externally, I believe under Obama we are more likely to have a recession through tax hikes and regulation and approval of pipelines than we are under a Romney administration.”

THE WRONG MAN FOR RIGHT NOW

Others feel far more strongly than Burkett that Obama is the wrong leader this time around.

“I was hopeful as was the country that a lot of the things that Obama campaigned on he would actually do, and a lot of that was change the dialog in Washington, reach across the aisle, try to move the country toward creating solutions for a lot of the economic worries that were present at the time and in a serious way, which he promised to do, address the long-term structural problems that we have in terms of runaway entitlements and budget deficits,” says the head of an East Coast private equity firm who backed Obama four years ago and has maxed out for Romney this cycle. “Many moderates like me that voted for him that aren’t supporting him now — we voted for him fully knowing that our taxes were likely to go up, but that we were happy to pay higher taxes if there was going to be a serious dialog about addressing these long-term issues in a serious way, and that just hasn’t happened.”

Also making this investor unhappy: the early focus on health care reform.

“He spent a lot of political capital getting this done against the advice of his advisors and business people that he talked to,” he says. “The anti-business rhetoric and the uncertainty created by bigger government, bigger regulation clearly has hampered any potential strength of an economic recovery.”

Alpern agrees.

“I have this conversation so much and it is not with a bunch of Wall Street guys who complain ‘he doesn’t get our business,’ it is with investors who just don’t feel like, other than using the government as an instrument of growth and growing the government as a means of doing that, that he really understands how to create a long term strategy for this country,” Alpern says. He is not swayed by the argument that the president has been stymied by an intransigent GOP who wants nothing more than to obstruct his administration’s plans for stimulating economic growth. “Even with just such a hyperpolarized two party system, isn’t it his job to still get it done? To go make deals, to woo people, to threaten, to get inside the machine and make it work for yourself, to go the American people and get them behind you? I am not willing to excuse it.”

Those self-described “lonely voices” within the investment community who plan to pull the lever for the president again come November say they see it otherwise.

“I don’t think people have been cognizant of the fact that he is dealing with a Republican party that has lost its mind and that has been out to get him from the beginning and has pushed him to the left,” says one Boston-based investor who raised money for the president both this cycle and last. “He was desperate to govern from the center and he realized pretty early that he just didn’t have the option. I don’t think he gets any credit for things he has done well.”