Cantor Bubble

The financial industry made a bad investment in Eric Cantor

June 11, 2014
June 11, 2014

When it comes to buying influence, a business putting its money behind a US congressional leader who’s been re-elected six times is the equivalent of buying shares in GE. It’s a blue-chip stock—it might go down, but it won’t go bankrupt.

But last night, the second-ranking Republican in the US House of Representatives, majority leader Eric Cantor, went bust. He lost his party’s nomination for re-election to an obscure right-wing political activist. There are lots of people dismayed by this outcome—chief among them supporters of immigration reform, of which Cantor was an (albeit half-hearted) advocate, and John Boehner, the speaker of the House and its top-ranking Republican—but this is as good a list of losers as any:

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These ten donors—a private equity giant, a major bank, and two hedge funds among them—between them provided Cantor’s campaign with more than $300,000. Cantor’s opponent, David Brat, spent $200,000 on his entire campaign. Cantor had been a warrior for the financial sector, leading the opposition to the Dodd-Frank financial reform bill in the House, and was seen by his colleagues as a conservative check on John Boehner’s moderate impulses during contentious negotiations over the debt ceiling and fiscal policy.

But his willingness to back some business-supported compromises, at least rhetorically—including  immigration reform provisions pushed by tech firms like Oracle, another of his major donors, and Facebook—apparently led him to be seen as too wishy-washy by the right-wing activists determined to unseat him:

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