Wall Street Tells You All You Need To Know About The Democratic Primary So Far

Friday, February 01, 2019

ABE ASHER

The Democratic primary for president is heating up, and, early Monday morning, Politico‘s Ben White gave us a view to how Wall Street is approaching the contest.

Unsurprisingly, they’d like to see a centrist nominee. Michael Bloomberg, perhaps, the former independent mayor of New York City who apparently thinks a wealth tax is unconstitutional. But whatever happens, there is one overriding concern.

“It can’t be Warren and it can’t be Sanders,” one CEO said. “It has to be someone centrist and someone who can win.”

First, there’s one thing to straighten out: Wall Street is not afraid that Warren or Sanders can’t win. Quite the opposite. They’re worried that one of them could win — so worried, in fact, that they can’t seem wrap their minds around the possibility.

Another Wall Street exec, later in the piece, says point-blank that “everyone in the top tier not named Bernie Sanders could probably win” — a statement that makes plenty of sense until you remember that Sanders is by multiplemetrics the most popular politician in the country and consistently flattens Donald Trump in head-to-head polling.

Why such a paralysis on Wall Street when it comes to Warren and Sanders? If you’ve followed the career of either senator, you likely have a pretty good idea.

Warren, for more than two decades, has been laser-focused on the greed and corrosive political influence of the country’s financial elite — attacking it with a zeal rarely matched in national politics.

She launched her exploratory committee on New Year’s Eve with a video excoriating “billionaires and big corporations” for essentially destroying America’s middle class, and the signature proposal of her campaign so far is raising $2.75 trillion over the next ten years through a tax on those worth more than $50 million.

Before she entered the Senate, Warren was a chief architect of the Consumer Financial Protection Bureau. She likely never would have run for her seat had Wall Street not so fiercely opposed her potential appointment as the CFPB’s first director in 2011.

Warren’s entire political career has been animated by battles with powerful financial interests, and her tenacity in those fights is what made her a star. If she operated with that same tenacity and conviction on other major issues, she’d be the front-runner.

Sanders, of course, is even further left than his Senate colleague is on economic issues. Where Warren has repeatedly identified herself as a capitalist interested in reform, Sanders is a class warrior who regards the financial elite as no less than an opposition force.

He voted against the 2009 bailout and the repeal of Glass-Steagall, and said during a 2016 debate that Wall Street’s business model is “fraud.” He’d tax stock trades, break up the big banks, and, if he repeats a 2016 promise, bar Wall Street officials from his cabinet.

More broadly, Sanders’ overarching goal is to change the face of American politics by mobilizing working people to fight for economic justice. That necessarily means less power and less money for Wall Street and its representatives.

But here’s the crucial takeaway from White’s piece: there is no other serious candidate for the Democratic nomination who makes Wall Street sweat.

They like Kamala Harris and Joe Biden. They like Kirsten Gillebrand and Cory Booker. They’re lukewarm on Beto O’Rourke, though they, like most everyone else, aren’t entirely sure what he actually believes.

Biden is a moderate, known quantity, while Harris, Gillebrand, and Booker — despite their hard tack to the left after 2016 — all met with Democrats on Wall Street last year to discuss potential runs.

Whatever you think of the rest of those candidates’ records, this is a clear line of demarcation in the emerging Democratic field. Sanders and Warren aren’t going to Wall Street asking for money. They’re not dialoguing with the CEOs of big banks.

Instead, Warren used lines from White’s article in a fundraising email early this week — amplifying Wall Street’s distaste for her.

Sanders, meanwhile, has for months been running social media ads and sending emails to his supporters with the line “if we run another presidential campaign, the political, financial and media elite of this country will stop at nothing to defeat us.”

The message is alarmist, but not without merit. Wall Street’s disposition towards him is clear. Health care industry groups are already up with adsattacking Medicare for All.

Of course, thanks in large part to the efficacy of Sanders’ last presidential campaign, progressivism is en vogue in the Democratic Party to such an extent that the likes of Harris and Gillebrand are onboard with universal healthcare and free college.

But deep, fundamental divisions remain between how these candidates see the world. Alexandria Ocasio-Cortez’s policy advisor Dan Riffle has no problem saying that every billionaire is a policy failure. Harris won’t even go so far as to condemn a system in which billionaires live alongside people in extreme poverty as immoral.

That’s a stark difference. It may also be worth considering whether there is a difference between candidates who arrived at their current beliefs two years ago and candidates who arrived at theirs 10, 20, and 50 years ago.

If there is, this primary, like the last one, may well come down to a fight between the left and center-left — and Wall Street, at the very least, knows which side it’s on.