"The best argument against democracy is a five-minute conversation with the average voter." — Winston Churchill

Less than a year after Wall Street and all things finance served as a populist pinata for both major political parties in the presidential race, some Wall Street pros are braving a career in politics.

In Connecticut, a state where former Goldman Sachs banker Jim Himes serves in Congress, the founder of Westport brokerage Euro Pacific Capital has his eye on a Senate seat. In Nevada, Lazard media banker John Chachas is also running for a Senate spot. In Massachusetts, Stephen Pagliuca, a former Bain Capital managing director, is considering a run for U.S. Senate.

While plenty of business leaders have run for office — Ross Perot ran for president as an independent in 1992 and 1996, New Jersey Gov. Jon Corzine was chairman and co-CEO at Goldman Sachs and New York Mayor Michael Bloomberg worked at Salomon Brothers before starting up his eponymous news agency — the new crop of deal-makers eying public office may appear brazen given the scorn heaped on Wall Street in recent years.

"A first-time candidate running with a Wall Street background would be an uphill battle," says Bruce Cain, Heller Professor of Political Science and director of the Institute of Governmental Studies at UC-Berkley. He adds that "it is probably not a good time to run as an insurance executive."

"I don't think any legitimate profession should be barred from running," says former New York Mayor and Congressman Ed Koch. "Everybody brings their own skills. I wouldn't keep anyone out."

When asked if they would vote for a former Wall Streeter, a random sampling of people quizzed by IDD in lower Manhattan this week said they were not completely opposed to the idea of a banker or trader running for a political office. There were caveats offered, though, that show how many people outside of the deal-making world perceive the financial services industry.

"I hope honest people on Wall Street run for office," Jerry, a former worker with the Long Island Railroad, said while on a busy street in lower Manhattan's financial district.

Alan, a college student, supports Bloomberg's third run for office as mayor. When it comes to pros from Wall Street running for public office, he says: "Wall Street professionals interested in getting ahead may take advantage of citizens who have become vulnerable as a result of the economic recession."

While they are not representative of the nation's population, these two voters may offer a taste of what anyone with a Wall Street career on their resume may encounter when running for public office. Some observers of American political life warned it will be an uphill climb for a deal maker to sell themselves for a political office.

"There exists this quasi-Marxist view that everyone on Wall Street is engaged in the wages of sin. That is a caricature of what happens on Wall Street, but it is a prevailing sentiment among many Americans," says Herb London, president of the Hudson Institute, who ran for New York City mayor in 1989 and New York State governor in 1990. "Once you are caricatured it is difficult to overcome that."

London warns that the going may be tough for a successful Wall Street deal maker because, as he puts it, "we live in society where populism is a significant feature of American political life."

UC-Berkley's Cain doesn't believe all business leaders in finance are precluded from running for public office, but he believes those who work in finance likely would face greater scrutiny about their business practices. And, he says, issues like pay and bonuses are sure to come up in voters' minds and in debates.

That said, Cain notes that American voters have embraced former business leaders. Perot is one, while last year Mitt Romney, a co-founder of Bain Capital, ran for the Republican ticket in the U.S. presidential race. Former Ebay CEO Meg Whitman has her eye on the California governor's job. In New York, the son of one of the founders of Lehman Brothers, Herbert Lehman, became governor and Senator in the 1930s and '40s, and Frank Zarb, former CEO of Smith Barney and a Lazard partner, is said to have considered a run for governor in the mid-1990s.

"If your job was on Wall Street and you plan to run on the basis of money you earned, you open yourself to easy slams" by other candidates, says Cain, noting that "it's not a reaction against all business executives. It is just certain segments. There is a question [in the public's mind] about the whole value of the financial sector — does it produce value?"

For example, Cain said someone who traded in derivatives might "be a prime candidate for criticism."

The trouble with that is that many basic tools on Wall Street like futures and options offered on the CBOE are considered derivatives and explaining this to some voters may be tough.

But knowledge of the financial services industry may be a big plus for some candidates, according to John Mueller, professor of political science at Ohio State University. "A pretty good pitch [to voters] would be: 'I understand Wall Street,' " he says.

Not only do Wall Streeters face an uphill climb in making their case for public office, so do some incumbents, particularly someone like Connecticut Sen. Chris Dodd who was on committees overseeing the financial services industry and received donations from Wall Street, insurance and financial services firms.

Wall Street firms in 2008 gave $1.7 billion to political campaigns of U.S. lawmakers and presidential candidates, according to a study by Wall Street Watch, which was sponsored by the Consumer Education Foundation and Essential Information and published earlier this year. The study found that by various measures Dodd was among the top five or six recipients of campaign contributions.

"Somebody like Dodd who is perceived to be too cozy with the industry he was trying to regulate and the fact that the whole business of bailing out banks has incurred populist wrath, there will be some incumbents who will be in trouble because of that," says Cain.

That is something Peter Schiff is itching for. The 46-year-old founder of Euro Pacific has been a critic of Dodd. "I would love to debate Dodd," says Schiff, who points out that he raised concerns about Freddie Mac and Fannie Mae on a television broadcast even as Dodd said they were sound.

Schiff, who announced his plans to run for Senate as a Republican in Connecticut in September, is in the middle of finding office space for his election headquarters and is putting together a campaign team. Schiff says his shift into politics is not a permanent career move. In fact, he hopes to accomplish his goals as a politician within a single, six-year term. As he sees it, many lawmakers in Washington have made poor decisions when it comes to the financial services industry and he believes he can serve as a guide. "I am not trying to change careers," he says. "The financial industry has been better for me. I am looking at this as more of a personal sacrifice ... it's a cause worth fighting for."

Listening to Schiff, voters are sure to get a whiff of populism — "if we leave it up to the career politicians they'll destroy the country" — but he has raised concerns about the government efforts to prop up the economy and its bailout of banks. "Right now the primary concern among politicians is that nobody looses money. The government is propping up all businesses to ensure investors don't lose money and people don't lose jobs. The government wants people to keep buying stuff and to accomplish this they need to keep printing money."

Concerns about how the Federal Reserve will pull back its various efforts to shore up the economy and the financial system have been voiced by a wide range of investors and dealmakers. If it's done too quickly, it poses a threat to a fragile rebirth of the economy. If the stimulus is kept in place too long, it could spur inflation.

For Schiff, the government's efforts to prop up banks and the economy pose a threat to the value of the dollar, which he believes could lose 60% to 90% of its value against other currencies. "The government refuses to allow structural imbalances to be resolved. It is a phoney economy that is just as phoney as dotcoms and subprime mortgages," says Schiff. "We need less spending and more savings. Maybe I can scream and yell, be the right voice to do the right thing."

While Schiff may have founded a brokerage and is involved in the financial services industry, he says he is not in favor of bailouts of Wall Street firms like Bear Stearns and insurance giant AIG.

Interestingly, Pagliuca, who is a private-equity financier in Boston and co-owner of Boston's NBA franchise Celtics, believes voters he is courting for a possible Senate bid won't immediately tie him to Wall Street. The 54-year old Bain Capital partner says he does not believe that Massachusetts financiers "are [as] associated with Wall Street as the bankers are in New York." He adds that "the problems didn't come from private equity, which has to do with investing," and that Wall Street's woes started with mortgage-backed securities, "which we had nothing to do with."

Pagliuca says his Senate bid was spurred on by the death of the state's long-time senator, Edward Kennedy. "What crystallized it was after Ted Kennedy's funeral and I was talking to people — many people are hurting right now. I decided it was time to get back to community work," says Pagliuca, a Democrat who has campaigned for John Kerry and counts Boston Mayor Thomas Menino as a personal friend.

Asked what he plans to do as senator, Pagliuca said he wants to encourage job growth in Massachusetts such as life sciences and clean tech. When it comes to the regulation of the financial service industry Pagliuca said he was an advocate of what he called "principal-based regulations. We need better regulations, maybe not more, but better regulations and better enforcement."

Meanwhile, the stream of attention in America may change by next fall when elections for these seats are held and by then the collective focus of voters could be fixated on other issues like the wars in Iraq and Afghanistan or health care reform.

And that, says Mueller, would mean that any Wall Street pro angling for a political post may have to be deft on their feet and be able to debate on other issues that may not relate to banking and finance. "In 2008, Iraq was thought to be the key issue" in the presidential campaign, he says. "Then, it was the financial crisis."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.