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Both Parties Play the Wall Street Card, Sometimes From the Bottom of the Deck

WASHINGTON — Anger at the financial services industry has been so high this election cycle that a viewer of campaign advertisements might be forgiven for thinking that Wall Street itself was on the ballot.

As campaigning draws to a close, a review of scores of recent ads suggests that the anti-Wall Street messages have frequently used a loose interpretation of the facts.

Outrage over the Wall Street bailout has been a prevailing theme, even though it was passed at the urging of President George W. Bush, has been credited by most economists with averting a financial collapse, and is expected to ultimately cost taxpayers a tiny fraction of the original $700 billion authorized by Congress.

Contributions from the financial services industry have also been a target of criticism, even though both parties rely heavily on Wall Street for donations. And few candidates in either party are mentioning the Dodd-Frank financial overhaul signed into law by President Obama in July — with almost no Republican support — perhaps because of its complexity.

It is understandable that Democrats are taking heat for the Troubled Asset Relief Program, as the bailout is formally known, said Judith Stein, a historian at the City University of New York Graduate Center.

“That Bush initiated TARP is for many Republicans irrelevant because they are now anti-Bush,” she said. “That the big banks are doing relatively well, while the regional banks and, more important, the average citizens are not, offers an opportunity for every Republican insurgent. And the Obama defense of TARP and the Wall Street-oriented people in his administration make its origins irrelevant.”

The back-and-forth attacks have often given way to exaggeration, as in the Senate race in Pennsylvania, where Pat Toomey, a Republican, and Joe Sestak, a Democrat, are vying to replace Senator Arlen Specter, a Republican-turned-Democrat.

“As a Wall Street trader, Toomey pioneered derivatives, and derivatives nearly wrecked our economy,” a Democratic attack ad says.

While Mr. Toomey did work on Wall Street after college, his focus was foreign-exchange swaps, not the credit default swaps that were at the heart of the 2008 financial crisis.

(Another Democratic ad notes that Mr. Toomey, while serving in the House, called derivatives “an enormous good” during a 2000 hearing. But both parties overwhelmingly agreed that year to exempt over-the-counter derivatives from strict regulation, in what is now commonly regarded as a mistake.)

Mr. Toomey, who has held a small lead in most polls, says in an attack ad of his own: “Congressman Joe Sestak voted for the Wall Street bailout. Then he voted to keep the bailouts going, even opposing bipartisan efforts to stop them.”

That claim could also be viewed as misleading. Mr. Sestak, like most House Democrats, opposed a largely symbolic resolution in January 2009 to block the release of $350 billion, the second half of the bailout money. (The resolution was essentially meaningless because the Senate had already voted not to hold up the release of the money.)

The anger over TARP is so fierce that at least seven first-term House Democrats — Kathy Dahlkemper of Pennsylvania, Mary Jo Kilroy of Ohio, Frank Kratovil Jr. of Maryland, Betsy Markey of Colorado, Glenn Nye of Virginia, Mark Schauer of Michigan and Dina Titus of Nevada — have claimed in ads that they voted against bailing out Wall Street, even though they did not take office until January 2009. That was nearly three months after President Bush signed the bailout legislation into law.

Asked about those claims, which were reported by FactCheck.org, a Web site managed by the Annenberg Public Policy Center of the University of Pennsylvania, aides to the lawmakers pointed to their support for the symbolic resolution.

There have also been misleading ads portraying Democrats who voted for the Obama administration’s $787 billion stimulus package — like Ms. Kilroy, Ann Kirkpatrick of Arizona, Paul E. Kanjorski of Pennsylvania and Earl Pomeroy of North Dakota — as having voted for Wall Street bonuses.

The American Reinvestment and Recovery Act, as the 2009 stimulus package is known, did not hand out any bonuses, though an earlier version contained more stringent restrictions on executive compensation that were subsequently weakened after the Treasury Department raised legal and practical concerns.

Few of the anti-Wall Street ads offer any context about the financial crisis, and Republican candidates generally avoid mentioning that their party controlled both houses of Congress and the presidency for most of the period when the housing bubble peaked and then burst.

One exception to the Republican silence on Mr. Bush is Representative Michele Bachmann of Minnesota, who is a favorite of the Tea Party movement. “I voted against the Bush Wall Street bailout, the failed Pelosi trillion-dollar stimulus and Obama’s government takeover of health care,” she says in an ad that criticizes the last two presidents, as well as the current House speaker, Nancy Pelosi.

“Anger at Wall Street is the highest since the early and mid-1930s,” said Charles R. Geisst, a finance professor at Manhattan College and an authority on the history of Wall Street. “That anger remained until the 1950s, when the postwar prosperity set in.”

Mr. Geisst said the rage against financial interests could linger for several more election cycles, because economies tend to recover much more slowly after financial crises than after other downturns.

So for now, any link to Wall Street is being cast as a liability.

Representative Jason Altmire, a Pennsylvania Democrat seeking a third term, claims in an ad that his Republican opponent, Keith Rothfus, “represented a Wall Street bank that took taxpayer-funded bailout money.” Mr. Rothfus, a lawyer, says his firm negotiated procurement agreements for the institution, the Bank of New York Mellon, and was not involved in the TARP bailout.

Representative Bill Foster, a first-term House Democrat from Illinois, says his Republican opponent, State Senator Randy Hultgren, worked for an investment management company that “set up a Cayman Islands hedge fund that used taxpayer bailout money and made a profit buying toxic mortgages,” and “fueled the housing crisis by selling risky mortgage investments, sometimes with no income verification.”

Republicans have called the attack misleading, saying that Mr. Hultgren was not involved with the fund and that the company did not underwrite or originate risky mortgage products.

A version of this article appears in print on  , Section A, Page 16 of the New York edition with the headline: Both Parties Play the Wall Street Card, Sometimes From the Bottom of the Deck. Order Reprints | Today’s Paper | Subscribe

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