Why Rand Paul is palling around with Wall Street this summer


Get ready for the summer's biggest blockbuster film: "Can Rand Paul Have it All?"

It's a romantic comedy in which a maverick, libertarian senator from Kentucky tries to find loveor at least respectamong establishment Republicans on Wall Street and in Washington without alienating all his old friends in the tea party.

Only this movie is not fiction, it is the real-life challenge before Sen. Rand Paul as he lays the groundwork for a 2016 GOP presidential bid. Paul is spending time this summer and into the fall meeting with small groups of executives and potential donors around Wall Street (and Silicon Valley) to convince them that his populist/libertarian approach to economic and foreign policy is not scary or dangerous and that they should not fear him.

Rand Paul
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Paul has already met in New York with small groups of bankers from Goldman Sachs, JPMorgan Chase, Wells Fargo, Blackstone, The Carlyle Group and many other blue-chip financial institutions.

The point of these meetings is not for Paul to emerge as the "establishment" candidate. That will never happen nor would Paul or his supporters want it to happen. The point instead is to become acceptable enough to the establishment that should Paul win a few early states and gain momentum, a "Stop Rand" movement will not emerge to unite behind someone like Jeb Bush or Scott Walker or John Kasich or anyone else like them.

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Opinions are mixed on whether Paul can ever convince the establishment wing of the GOP, which includes fiscal conservatives on Wall Street and pro-business types in Washington, that he is an acceptable choice for the GOP nomination. Some think it is foolish to even try because he will fail and only alienate his populist, anti-Wall Street base if he tries very hard.

GOP strategist and consultant Kevin Madden, who served as spokesman for the Mitt Romney campaign, thinks it's possible but will be difficult.

"The donor community is mostly aligned with the public in being wary of past military interventions," he said. "Whether they or going to embrace [Paul's] foreign policy, which some critics say tends too far toward isolationism, is another question." Madden added: "And for many donors he is defined too much along the lines of what he is against and not what he is for and what he would do to grow the economy."

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Paul also faces an experience and credibility problem, according to Business Roundtable president and former Michigan Gov. John Engler, who believes President Barack Obama's performance in office could make the junior Kentucky senator's path more difficult.

"The president's record over the last six years probably hurts [Paul] in that in his first campaign the president was about hope and change and a new path forward. That was sold to the American people despite a record that was clearly way over to one side," Engler said. "So whether you are left or right if you are out there on the edges in 2016 it's going to be a tougher sell."

Engler added that Paul does not have the record of accomplishments that the GOP likes to see in its presidential nominees.

"On what issue has there been positive leadership exerted that would reveal [Paul's] ability to build coalitions, bring votes together that might be seen as a real benefit to economic growth and job creation along with the shrinking of the government and balancing the budget?" he said.

Bankers across Wall Street often say privately that they like Paul's unique brand and energy but are skeptical that he can maintain his outsider, populist image while also ingratiating himself with Wall Street. "When you've got one foot on either side of a giant chasm, you are likely to fall in," one senior executive said.

Nate Morris, the 33-year-old Kentucky waste management entrepreneur charged with introducing Paul to Wall Street and Silicon Valley, thinks the mission is very achievable.

Morris and Paul bonded on a trip to Israel and have been tight ever since.

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Morris said Paul has many more events planned for the summer and fall that will make it clear to the executive class that the senator's policies on immigration and economic growth are not to be feared.

"What I've found as I've taken the senator to Wall Street and Silicon Valley and the so-called establishment is that these folks are yearning for an opportunity to get real market-based principles back in the White House," he said. "They are yearning for a candidate that represents free market principles and upward mobility rather than going back to business as usual in Washington."

One big criticism of Paul around Wall Street is that he beats up on the one institution that many bankers think actually works: The Federal Reserve. Morris said that all Paul wants is more transparency at the central bank and that the issue never comes up in meetings.

"I have introduced the senator to dozens of investment bankers and investors and the subject of the Fed has not come up once in any of our discussions," he said.

It's far too soon to say how this movie ends, with the hero successfully bridging two very different worlds or falling flat on his face. But it should be fascinating to watch.

—By Ben White. 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.