Michael Bloomberg is putting his money where his money is, moving to launch a self-funded bid for the Democratic presidential nomination as the intraparty fight over taxing the ultrarich intensifies.
The former New York mayor — with a net worth of $52 billion he started amassing as a Wall Street investment banker more than 50 years ago — has been critical of the party’s leftward drift. His possible entry in the race promises immediately to sharpen what was already shaping up to be a defining debate over inequality and the concentration of corporate power.
Bloomberg adviser Howard Wolfson wrote in a series of tweets that the could-be candidate is exploring a run out of fear that the crop of 2020 Democratic hopefuls isn’t up to the job of defeating President Trump:
In 2018, he spent more than $100 million to help elect Democrats to ensure that Congress began to hold the President accountable. And this year he helped Democrats win control of both houses of the Virginia legislature.— howard wolfson (@howiewolf) November 7, 2019
If Mike runs he would offer a new choice to Democrats built on a unique record running America’s biggest city, building a business from scratch and taking on some of America’s toughest challenges as a high-impact philanthropist.— howard wolfson (@howiewolf) November 7, 2019
The not-so-subtle subtext: Former vice president Joe Biden hasn’t sufficiently established his strength in the race’s moderate lane and neither have those jockeying to overtake him there, while Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) are too far left to win a general election.
Warren and Sanders welcomed Bloomberg to the contest by making clear they intend to make his wealth count against him:
The billionaire class is scared and they should be scared.— Bernie Sanders (@BernieSanders) November 7, 2019
Warren’s tweet linked to a wealth tax calculator her campaign launched earlier in the day. After the Bloomberg news broke, the calculator added a link just for him (in addition to dedicated links for Microsoft founder Bill Gates and hedge fund manager Leon Cooperman, both of whom criticized her wealth tax proposal this week). Per the calculator, Bloomberg would face a $3.079 billion bill under Warren’s proposal to impose a 6 percent levy on billionaires’ net worths to fund her $20.5 trillion Medicare-for-all plan.
“It’s not enough just to have somebody come in, anybody, and say they’re going to buy this election,” Warren said on the campaign trail, per the New York Times's Alex Burns, who broke the story. Per Burns, "Faiz Shakir, Mr. Sanders’s campaign manager, signaled the stiff resistance Mr. Bloomberg would face if he joined the race. 'More billionaires seeking more political power surely isn’t the change America needs,' Mr. Shakir said in an email."
Bloomberg spent more than $110 million boosting Democratic candidates in the 2018 midterms and pledged to spend at least $500 million more this cycle to defeat Trump. He has given more than $150 million to envrionmental groups, promised another $500 million to close every coal-fired power plant in the U.S., and spent tens of millions more promoting gun safety.
But he also drew a clear distinction with the Warren and Sanders wing of the party on economic issues as he circled a candidacy earlier this year. “In January, on one of his final New Hampshire trips before initially deciding against a bid, Bloomberg told The Post that Warren’s wealth tax was ‘probably unconstitutional,’ and warned that seriously pursuing it could wreck the country’s prosperity,” my colleagues Matt Viser and Michael Scherer write.
Bloomberg at the time said Democrats “shouldn’t be embarrassed about our system. If you want to look at a system that’s not capitalistic, just take a look at was perhaps the wealthiest country in the world, and today people are starving to death. It’s called Venezuela.”
Chris Krueger of Cowen Washington Research Group called Bloomberg’s move “more of a hedge should Biden collapse after the Iowa Caucuses on February 3 than the launch of a national campaign.”
“We struggle to see the party of wealth taxes nominating a billionaire whose name is literally synonymous with Wall Street,” Krueger writes in a note. “We suspect Bloomberg will start with a hammerlock on former Republican, socially libertarian, fiscal conservatives, white, affluent men...which is not exactly an ascendant core constituency of the Democratic Party. But it is arguably the most vocal subsection terrified of Warren if you have seen CNBC in the last few weeks.”
— China, U.S. make progress: “Negotiators are making progress toward finalizing a partial trade deal between the United States and China, including agreeing on the removal of some of the tariffs that have disrupted trans-Pacific commerce for the past year and a half,” my colleagues David J. Lynch and Gerry Shih report.
“But American and Chinese diplomats still must resolve several core issues before the text is ready for [Trump] and Chinese President Xi Jinping to sign, according to people familiar with the talks... Nearly four weeks after Trump said the two sides had reached an 'agreement in principle,' the White House and China continue to haggle over terms. Among them: the extent to which the United States will roll back tariffs on Chinese imports as well as specific Chinese pledges to protect the intellectual property and trade secrets of U.S. companies. Some other provisions are largely complete, including ones that govern currency moves and the opening of China’s financial services market to foreign companies.”
… Not so fast, say some in the White House: “An agreement between the United States and China to roll back existing tariffs as part of a ‘phase one’ trade deal faces fierce internal opposition in the White House and from outside advisers, multiple sources familiar with the talks said,” Reuters’s Heather Timmons and Jeff Mason report.
“The idea of a tariff rollback was not part of the original October ‘handshake’ deal between Chinese Vice Premier Liu He and U.S. [Trump], the sources said. But there is a divide within the administration over whether rolling back tariffs will give away U.S. leverage in the negotiations, current and former administration officials said. The Chinese Communist Party is trying to ‘re-trade’ the agreement, said Stephen Bannon, former White House adviser. He added that rolling back earlier tariffs ‘goes against the grain’ of the original October agreement.”
White House trade adviser Peter Navarro to Fox Business, per Bloomberg News: "There is no agreement at this time to remove any of the existing tariffs as a condition of the phase one deal. The only person who can make that decision is [Trump]. It’s as simple as that.”
— Trump administration moves closer to loosening gun export rules: “The Trump administration has passed a key milestone in a long-delayed rule change that would make it easier to sell U.S. firearms outside the United States, including assault rifles and ammunition, people briefed on the matter told Reuters,” Reuters’s Mike Stone and David Shepardson report.
“The proposed rule changes, which would move oversight of commercial firearm exports from the U.S. Department of State to the Department of Commerce, could be enacted as soon as the end of this year, the sources said late on Wednesday.”
— Trump ordered to pay $2 million to charities: “A New York judge ordered [Trump] to pay $2 million in damages for misusing funds from a tax-exempt charity — taking the charity’s money to pay debts for his for-profit businesses, to boost his 2016 campaign and to buy himself art, according to court documents,” my colleagues David A. Fahrenthold and Joshua Partlow report.
“That order, from state judge Saliann Scarpulla, settled a lawsuit filed against Trump last year by the New York attorney general. The lawsuit — based on information first uncovered by The Washington Post — alleged ‘persistently illegal conduct’ at the Donald J. Trump Foundation, where Trump served as president for 32 years.”
- Key paragraph: “As part of the settlement, Trump also agreed to disburse the $1.8 million remaining in the foundation to a set of charities, and to shutter it for good. In a statement signed by Trump’s attorney, the president admitted to poor oversight of the charity and to seven specific instances where its money was misspent.”
IMPEACHMENT MINUTE: Your daily speed read on the latest from the congressional impeachment inquiry.
"House GOP looks to protect Trump by raising doubts about motives of his deputies." By The Post's Karoun Demirjian and Rachael Bade
"Trump’s demands of Ukraine came down to three words: ‘Investigations, Biden and Clinton,' official’s testimony states." By The Post's Greg Jaffe and Mike DeBonis
"Ukraine’s Zelensky Bowed to Trump’s Demands, Until Luck Spared Him." By the New York Times's Andrew E. Kramer.
"Democrats unveil three questions to guide public impeachment hearings." By Politico's Kyle Cheney.
— Stocks rally on trade optimism. CNN Business's Anneken Tappe: "It was another record-breaking day in the US stock market, after a Chinese official said that Washington and Beijing have discussed rolling back tariffs... The Dow and the S&P 500 recorded a new all-time closing high. The Dow ended up 0.7%, or 182 points, logging its third record of the week, while the S&P 500 climbed 0.3%. It was the index' second record of the week... Gains were broad across industries, with only seven Dow stocks ending in the red. Energy, telecommunications and tech stocks were the best-performing in the S&P 500."
- Demand for havens is collapsing. Bloomberg's Luke Kawa: "As investors fretted for most of the year that the trade war and slowing growth would end in a global recession, assets like gold and sovereign bonds provided protection. That ended spectacularly Thursday. Gold lost as much as $30 an ounce, Treasuries tumbled the most since summer and defensive equities sank. While continued signs of a detente in the U.S.-China trade war sparked the day moves, such a beat-down has been months in the making as peak pessimism on global and U.S. growth has ebbed."
— Economists split on cause of hiring skid. WSJ's Harriet Torry: "Economists are roughly split over whether the recent hiring slowdown reflects primarily a shortage of workers or softening demand for labor, a sign of continuing uncertainty about the outlook.In The Wall Street Journal’s latest survey of economists, 45.3% blamed the slowdown on the tight labor market, which has made it harder for many employers to find enough workers. An additional 37.7% of respondents said the issue was ebbing desire to expand payrolls. The first explanation would suggest the economic expansion can continue at a solid pace if more potential workers can be drawn into the labor force from sidelines."
— Gilead sued by administration over Truvada patent: “A rift between the Centers for Disease Control and pharmaceutical giant Gilead Sciences ruptured further Wednesday when the Trump administration sued Gilead in U.S. District Court, asserting that Gilead made billions of dollars on HIV prevention therapy while repeatedly ignoring government patents,” my colleague Christopher Rowland reports.
“The patent infringement case against a major drug company, coming at a time of increasing political anger over drug prices, signals a shift in a relationship that typically has been collaborative. The San Francisco-based company has worked for years with the Centers for Disease Control and Prevention to fight HIV, including providing free drugs for government experiments, as well as efforts to expand treatment of hepatitis C.”
— Pensions taking more risks to get returns: “Some pension-fund managers are venturing further into unusual investment territory as this year’s plunge in bond yields makes it harder to find decent long-term returns,” the Wall Street Journal’s Avantika Chilkoti and Caitlin Ostroff report.
“Funds are dabbling in riskier asset classes, including private markets, real-estate projects, infrastructure financing and direct lending. Some are making riskier fixed-income bets, buying volatile assets such as 100-year Argentine government bonds. Others are going farther afield, investing in greenhouses and waste management.”
— GM sells Lordstown plant: “General Motors Co confirmed … it has sold its shuttered Lordstown Assembly plant in Ohio to a start-up that has an ambitious plan to begin building electric pickup trucks by the end of 2020,” Reuters’s David Shepardson reports.
“Lordstown Motors Corp, which is 10% owned by Workhorse Group Inc, has retained Ohio investment bank Brown Gibbons Lang & Co and is working to raise additional capital, Lordstown Chief Executive Steve Burns said in an interview. Workhorse shares closed up 27% on the news.”
— Uber employees can now sell their stock, but the value has tanked: “On Wednesday morning, Uber employees woke up early and prepared for the worst: a nose-dive in stock price, just as they could finally sell their shares,” my colleagues Nitasha Tiku and Faiz Siddiqui report.
“At the opening bell, which ended the six-month period that prevented employees from selling, the stock sank 7 percent to about $26, hitting a low since Uber went public at $45 a share in May.”
MONEY ON THE HILL
— Buttigieg pitches free college for families earning less than $100,000. The Post's Heather Long: "Democratic presidential candidate Pete Buttigieg is unveiling a plan Friday to make tuition at four-year public colleges free for families earning up to $100,000. The move is part of a package of new economic policies aimed at boosting the fortunes of middle- and working-class Americans and positioning Buttigieg as a clear alternative to more liberal candidates.
"While Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) have proposed making college free for everyone, Buttigieg is taking a more targeted approach of giving free tuition only to families he considers middle-class and lower. His new policy calls for reduced tuition at public universities for families earning $100,000 to $150,000 and no tuition for those below that threshold. Like several in the Democratic field, Buttigieg also proposes expanding Pell Grants to help low-income students pay for housing and fees and investing $50 billion in historically black colleges."
- The pay-for: Hiking capital gains taxes on the wealthy: Per Heather, Buttigieg proposes "taxing the capital gains of the top 1 percent every year by forcing the richest Americans to calculate how much their assets rose (or fell) each year, even if they do not sell the asset. The rich would have to pay the top income tax rate on any capital gains, according to the Buttigieg plan, a major shift from the current system, which taxes capital gains at a lower rate to encourage people to invest."
- Honda Motor, Duke Energy and Revlon are among the notable companies reporting their earnings, per Kiplinger
- China releases its latest trade figures, per WSJ
Who’s on your impeachment bingo card? pic.twitter.com/ONz5XyB1il— The New Yorker (@NewYorker) November 7, 2019