Clinton's risky Wall St. defense: Obama took $, too

Hillary Clinton continues to struggle on the left with criticism that she is too close to Wall Street and would not do enough to rein in the nation's largest banks. And now she is rolling out a new defense, saying she is just like President Barack Obama , who took a lot of Wall Street money in 2008.

It's a risky strategy that liberal Democrats so far aren't exactly buying.

The new defense was on display in Sunday night's Democratic debate when Bernie Sanders ripped Clinton for taking money for her campaign from big banks and getting "personal speaking fees from Goldman Sachs (NYSE: GS)."

Clinton fired back that there was "no daylight" between her and Sanders on regulating Wall Street, saying "there should be no bank too big to fail and no individual too powerful to jail."

Then she pulled out the Obama card: "But where we disagree is the comments that Senator Sanders has made that don't just affect me, I can take that, but he's criticized President Obama for taking donations from Wall Street, and President Obama has led our country out of the great recession," Clinton said. "I'm going to defend President Obama for taking on Wall Street, taking on the financial industry and getting results."

In some respects, it's a shrewd strategy. Obama's national poll numbers are terrible, but he is still very popular among activist Democrats likely to vote in primaries. He is especially popular with African-American Democrats who Clinton will need in large numbers when the nominating contest turns to South Carolina and other Southern states after Iowa and New Hampshire.

If Clinton winds up losing Iowa and New Hampshire to Sanders — a real possibility — she will need a Southern fire wall to stop the Vermont senator's momentum. Casting Sanders as an Obama basher (even though he really isn't one) could certainly help Clinton roll up delegates after the first two nominating contests.

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But it could also backfire because it is far from a perfect comparison. While it is true that Obama took a lot of Wall Street cash in 2008 — around $16 million, outpacing his GOP rival Sen. John McCain — he has not taken millions of dollars in speaking fees from the likes of Goldman Sachs and others, as Clinton has.

One Democratic operative working for a rival campaign emailed me regarding Clinton's latest attempt to beat back the Wall Street attack: "This is the sixth defense [Clinton] is trying out: An economic speech on capital gains will give me cover; Anyone who knows me knows I don't listen to donors; 9/11 endeared me to Wall Street; I went to Wall Street and told them to cut it out; I have a better plan than my opponents; President Obama took donations from Wall Street, too," this person said. "The problem is you can't really equate campaign contributions with personal income. There's quite a difference between receiving donations from Wall Street and personally profiting from it — though she's done both."

There is another problem with Clinton's "I'm just like Obama" defense on Wall Street: The president's record on dealing with the financial industry is not universally loved on the left. Many progressive Democrats remain both unsatisfied that the Dodd-Frank financial reform law did not do more to break up the biggest banks and outraged that no senior Wall Street executives were prosecuted following the financial crisis.

A second Democratic operative not aligned with any campaign emailed: "When do you think the Wall Street-friendly Democratic elites that have dominated the party since the first Clinton Administration are going to accept the fact that the polling consistently shows Bernie doing better in a general election than their preferred pick? Will they stick with Clinton even if it means blowing a chance to win the real prize? Smart money parlay is on 'never' and 'yes,'" this person said. "Clinton is now clearly running on Obama's legacy. That may work in some policy areas (like guns), but this may backfire on Wall Street regulation. Rightly or wrongly, President Obama is still stained by the bailouts and the inexplicable failure to prosecute really any leading bank executives as part of the crisis."

Clinton is moving on to the Obama defense in part because her "my plan is better" approach, while possibly correct, is a much tougher sell among liberals not especially interested in nuance when it comes to Wall Street reform.

Clinton has argued that a blunt approach that would break up banks based mainly on size rather than risk would not make a great deal of sense. She would use a relatively complex set of proposals to rein in Wall Street rather than simply breaking up the biggest banks as Sanders has promised to do.

"I have a risk-oriented approach that goes much further than reinstating Glass-Steagall," Clinton said in New Hampshire last month. "Now, it will take a little while longer to explain it."

That last sentence represents her biggest problem. Targeting risk rather than size is a very appealing approach to policy wonks. But it does not exactly fire up the pitchfork-wielding activists who want the biggest banks smashed and executives led away in handcuffs.

And now Clinton is expecting voters to recoil at Sanders' implied criticism of Obama even though the president never gave big ticket speeches to banks and saw his Wall Street financial support plunge in 2012 following implementation of Dodd-Frank.

It could wind up working. But it's a better bet that Clinton will simply take her lumps over her ties to Wall Street and go on to win the nomination anyway.

—Ben White is Politico's chief economic correspondent and a CNBC contributor. He also authors the daily tip sheet Politico Morning Money [politico.com/morningmoney]. Follow him on Twitter @morningmoneyben.

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