It was a hot July day two years ago as President Obama visited New Jersey to stump for the embattled incumbent governor. Democrat Jon Corzine trailed former U.S. Attorney Chris Christie by as much as 15 points in some polls, was unable to draw more than 40% support in most polls, and had not led the race in any poll since January. Nearly one-quarter of New Jersey Democrats said they would not vote for him. There would soon be open speculation that the party would replace Corzine on the ballot.
Obama’s visit only made things worse. One-third of New Jersey voters said after Obama’s appearance with Corzine that the President’s visit made them less likely to vote to reelect the governor. Still, Obama came to New Jersey twice more in late October hoping to push him across the finish line. At a rally in Hackensack, Obama made the case for Corzine.
“I know these are challenging times and Jon knows these are challenging times,” Obama said. “I also know this: For the past four years, you’ve had … a leader who’s fought for what matters most to the people of New Jersey. That’s why New Jersey needs to give Jon Corzine another four years.”
Two days after Obama’s final push, New Jersey rejected that advice, electing Chris Christie. According to the exit polls, President Obama had no measurable impact on the race. Only 19% said they cast their vote to show support for the President, while 20% said they cast theirs in opposition. Sixty per cent said the President’s support for Corzine had no effect on their decision.
Calling in Favors
President Obama now finds himself at the beginning of a difficult reelection campaign, and is calling in favors. The Obama campaign has said publicly that it expects to raise $1 billion for the President’s reelection effort, with a good portion of that money slated to come from well-heeled liberals on both coasts. He has turned to Corzine, the former chief executive officer of Wall Street powerhouse Goldman Sachs and current chairman and CEO of futures broker MF Global, to tap the coffers of the finance industry.
During the campaign, the President referred to Corzine as, “our Wall Street guy.” Obama is no doubt counting on Corzine to do a much better job as a fund-raiser than he did as New Jersey governor. Tax increases, runaway spending, mismanagement and scandal marked his one term. And Corzine left office as perhaps one of the most unpopular executives in New Jersey’s history.
Perception Is Reality
Corzine’s troubles began almost immediately. In July, only six months on the job and after a protracted battle with a state legislature controlled by his own party, Corzine signed an executive order shutting down state government. Corzine wanted to close a $4.5 billion budget gap that year by raising the state income tax one point to 7%. The last Democratic governor to try that was Jim Florio, who was unceremoniously dumped by the voters after one term and is remembered as the most unpopular governor in the state’s history. One week of bitter recriminations between the legislature and the governor later, the legislature relented and the sales tax increase took effect.
Corzine’s personal life was also a source of trouble for him in his first year. Prior to becoming governor, he was involved romantically with Carla Katz, president of Communications Workers of America (CWA) Local 1034, the single largest union representing state workers. When the relationship dissolved in 2004, lawyers negotiated a settlement that included payment of more than $6 million to Katz, including forgiveness of a nearly $500,000 loan from Corzine used to buy Katz’s home. The potential conflict of interest had been an issue in the 2005 campaign.
Despite the controversy, Corzine as governor was personally involved in negotiating a new collective bargaining agreement with the CWA in 2006. Katz was the lead negotiator for the union on the contract. A state panel ultimately ruled that Corzine had breached no ethics rules, but public perception was cemented that Corzine’s ties to Katz were inappropriate, and the issue would continue to haunt throughout the remainder of his term.
The following year, with the state still strapped for cash despite the sales tax increase, Corzine proposed a scheme to monetize the state’s toll roads. The complex plan would have increased tolls on the New Jersey Turnpike and the Garden State Parkway to fund infrastructure improvements, retire state debt and support state spending levels. The Parkway and Turnpike enjoy icon status in New Jersey—even if motorists regularly complain about tolls—and the plan was derided on both the Left and the Right, ultimately getting shelved until after the 2007 legislative elections. Corzine’s approval rating dropped into the low 40s in its wake.
By 2009, New Jersey’s budget deficit had grown to $7 billion. Unemployment was at 7.5% and climbing. The state had been ranked by the Tax Foundation as having the highest state and local tax burden in the country, and as the least friendly state for business. Facing the upcoming 2009 campaign, Corzine proposed to increase taxes yet again, this time targeting the wealthy. He proposed an increase in New Jersey’s so-called “millionaire’s tax,” which was actually a surcharge on incomes over $500,000. Under his proposal, the income threshold for the tax would be lowered to $400,000 and the rate increased from 6.37% to 8%, with income over $1 million taxed at 10.75%. The proposed increase to the millionaire’s tax was never enacted, and Corzine and the Democratic legislature allowed the tax to expire altogether after the election.
Corzine is likely to find his new role as Wall Street bagman for the Obama campaign as challenging as governing. In 2008, banks and financial firms were among the largest contributors to Obama’s campaign. Corzine’s old firm, Goldman Sachs, was the biggest single contributor, raking in nearly $1 million for Obama from its political action committee and individual donations from employees. Citigroup, JPMorgan Chase, UBS and Morgan Stanley all ranked in the top 20 in contributions, each bringing in excess of $500,000 to the campaign’s war chest.
This time around, there is reportedly far less enthusiasm for Obama on Wall Street, and donations are lagging. Corzine has the tough task of seeking financial support for a President who has derided Wall Street executives as “fat cats,” lectured them on their role in the financial crisis of 2008, and shepherded in tighter regulations over the industry. These are not the policies Wall Street thought they were getting in return for their investments.
Still, there is great reluctance to publicly cross Corzine or the President. Human Events made multiple requests for information and comment for this story and was rebuffed at every turn. If Wall Street has moved on from its Obama infatuation, it prefers not to air its dirty laundry in public.
The selection of Corzine as liaison to Wall Street is in itself symbolic of Obama’s troubles in wooing back the financial industry. Corzine’s policies as governor, heavy on class warfare and soak-the-rich tax philosophy, mirror the complaints leveled against the administration by Wall Street. Corzine’s record with New Jersey’s economy so soured voters on his tenure that three last-minute visits from the relatively popular Obama could not convince them to give the governor a second term. Obama’s economic stewardship has not been much better. Yet the campaign believes that the former governor is just the person to convince Wall Street heavy-hitters to give to the President a second time. So far, Wall Street is showing it has more in common with the voters of New Jersey than the President had hoped.