“Elections have consequences, and Eric, I won,” President Barack Obama famously told House Republican Whip Eric Cantor shortly after his first inauguration in January 2009.
Four years later, Wall Street as well as the oil and gas industry will return to work today knowing that they heavily backed the losing side and now have very little political capital with the re-elected Obama administration and the Democratic majority in the US Senate.
Some urgent bridge-building will be required in the coming days if they are to influence financial regulation and energy policy over the next four years.
President Barack Obama's re-election ensures the Democrats will retain their 3-2 majorities on the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), the agencies charged with implementing the controversial derivatives portions of the 2010 Wall Street Reform and Consumer Protection Act. Senate Democrats and the president will block any attempt to re-write the Dodd-Frank Act, and the continuing Democratic majority in the Senate will leave the president with a relatively free hand to nominate regulators committed to a fairly aggressive interpretation of the landmark financial law.
On energy and the environment, the Department of Energy and the Environmental Protection Agency (EPA) will remain in the hands of conservation-minded policymakers, who want to tilt the energy market in favour of clean technologies, back strict controls on greenhouse emissions and vehicle efficiency and are somewhat sceptical about drilling for oil and gas.
In the past 18 months, the financial services and fossil energy industries moved into outright opposition to the Obama administration and the Democratic Party, making little secret of their desire to see a Republican takeover in Washington. Employees of banks such as Goldman Sachs and JPMorgan Chase and Co, as well as many brokerages and derivatives dealers poured millions of dollars into political action committees that supported Romney for president and backed other Republicans in a bid to seize control of the Senate.
The American Petroleum Institute (API), which lobbies on behalf of the oil and gas industry, created and funded Vote4Energy to campaign for oil- and gas-friendly policies in battleground states. The organisation was nominally independent, but its positions and advocacy closely mirrored the views of the Romney campaign.
In return, Romney's campaign promised to repeal the hated Dodd-Frank law and ease restrictions on the development of fossil energy. Wall Street and the fossil energy industry now must decide how to cope with the new