with Brent D. Griffiths

THE TICKER

The central economic fault line dividing the 2020 Democratic presidential field cracked open in the earliest minutes of the fifth debate as Sens. Elizabeth Warren (D-Mass.) and Cory Booker (D-N.J.) squared off over higher taxes on the ultra-rich. 

For the first time, Warren faced a sustained challenge from a rival to what has emerged as a signature plank of her platform — her plan to impose a 2 percent tax on households with more than $50 million, and a 6 percent surtax on net worths above $1 billion, to fund a massive expansion of social welfare programs and debt relief. 

Booker, speaking for his party’s more moderate wing, called Warren’s pitch “cumbersome.” He said the tax has “been tried by other nations. It's hard to evaluate.” Beyond technical quibbles, he framed a larger critique: The party’s nominee, he argued, should focus less on redistribution of wealth than on the creation of more of it. In that sense, the debate — between what could be called Warren's emphasis on fairness and Booker's on opportunity — continued one that emerged in the 2016 Democratic primary.

“We as Democrats have got to start talking not just about how we tax from a stage, but how we grow wealth in this country amongst those disadvantaged communities that are not seeing it,” Booker said. “Look at VC dollars in this country. Seventy-five percent of them go to three metropolitan areas. There is worth in the inner city. There is value in our rural areas.” If elected, he said, “we're going to have pathways to prosperity for more Americans. We're going to see a change in what we see right now.  Small businesses, new startups are going down in this country… We need to give more new entrepreneurs access to wealth.”

Washington Post reporters talk with Sen. Cory Booker (D-N.J.) following the MSNBC/ Washington Post debate on Nov. 20. (The Washington Post)

Before Booker even voiced his criticism, Warren borrowed from her stump speech to emphasize her plan isn’t meant to be punitive. “It's about saying, you built something great in this country? Good for you. But you did it using workers all of us helped pay to educate. You did it using -- you're getting your goods on roads and bridges all of us helped pay for… So when you make it big, when you make it really big, when you make it top one tenth of one percent big, pitch in two cents so everybody else gets a chance to make it.”

Booker responded that Democrats need to talk not only about “just taxation” but “how to grow wealth, as well.”

“Yeah, we need to raise the minimum wage to a living wage, $15 an hour,” Booker said. “But the people in communities I frequent, they're aspiration for their lives is not just to have those fair wages.”

For some, the answer recalled Booker’s objection in 2012 to the Obama reelection campaign’s attacks on then-GOP nominee Mitt Romney’s work for Bain Capital. “It’s nauseating to the American public,” Booker said at the time." “Enough is enough. Stop attacking private equity.” 

Warren, meanwhile, has made her critique of private equity a focus of her campaign’s assault on the financial services industry. 

Booker has collected more than $2.2 million in contributions for his presidential campaign from financial services interests this year, making him a top beneficiary of the industry’s largesse, according to figures from the Central for Responsive Politics. His bid has yet to gain traction with voters, however, and he so far hasn’t qualified for the next Democratic debate. 

But the competition in the field’s moderate lane has only gotten more crowded, with two Wall Street-friendly candidates entering the fray: former New York City Mayor Michael Bloomberg is moving closer to an official bid, and former Massachusetts Gov. Deval Patrick has leapt into the race, too. To do so, he left behind a gig at Bain, where he focused on “social impact investing.” 

MARKET MOVERS

Stalwart shoppers keep retail chugging. WSJ's Justin Lahart: "So much for the retail apocalypse. Tuesday was a bad day for retail stocks after poor results from Home Depot and Kohl’s cast a pall over the sector. But Wednesday was different. Target solidly beat analysts’ estimates for its fiscal third quarter, sending its stock up around 12% by midday. And Lowe’s fiscal third-quarter results also were pleasing, especially in light of Tuesday’s disappointment from Home Depot, pushing its stock up around 4%.

"Underscoring both Tuesday’s and Wednesday’s reports is the simple reality that in a world of decent, but not stellar, consumer-spending growth, retailing is reduced to a near zero-sum game of winners and losers, driven by companies’ ability to grab and hold onto market share."

Fed unlikely to cut rates. Reuters's Ann Saphir: "As U.S. Federal Reserve officials hone their monetary policy playbook in preparation for the next economic downturn, it appears they will eschew more controversial approaches tried by other global central banks, including one that [Trump] has called on the Fed to try. Minutes of the Fed’s late October meeting, released on Wednesday, show U.S. central bankers jettisoning any real consideration of using negative interest rates to stimulate the economy.

"Trump has repeatedly urged the Fed to lower rates to below zero, arguing that negative rates in Europe and elsewhere give those countries a competitive advantage. The minutes make clear that not only is the Fed unwilling to use negative rates now, when the U.S. economy is growing, but it is also deeply skeptical of their use even in a recession."

  • Pantheon Macroeconomics: The Fed's done for now but not necessarily for long. Per the firm's chief econominst, Ian Shepherdson: "Markets now expect no action from the Fed until Q3 2020, but we are not ready to rule out an easing early next year, if Q4 growth is close to zero. At this point, that’s a wild card, as half the quarter hasn’t happened yet and the strength of the holiday shopping season is very uncertain."

TRUMP TRACKER

TRADE FLY-AROUND:

— Trade talks falter (again): “Nearly six weeks after claiming he had agreed ‘in principle’ on a partial trade deal with China, [Trump] suggested that the agreement might not be finalized this year because of Chinese foot-dragging,” my colleague David J. Lynch reports.

“Trump’s comments, made while touring an Apple supplier facility in Texas, came as investors appeared to be growing impatient with his inability to deliver the promised accord. Asked by a reporter if the deal would be completed this year, the president said: ‘I haven’t wanted to do it yet because I don’t think they’re stepping up to the level that I want.’”

​​​​​​​Chinese invite U.S. negotiators for face-to-face talks. WSJ's Lingling Wei and Eva Dou: "During a phone call late last week, Liu He, President Xi Jinping’s point person on trade negotiations with Washington, extended the invitation to U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin to hold the meeting in Beijing... U.S. negotiators have indicated they would be willing to meet in person, according to the people, but that they would be reluctant to trek across the Pacific unless China makes it clear that it would make commitments on intellectual-property protection, forced technology transfers and agricultural purchases."

President Trump raised the possibility of exempting Apple from paying tariffs on computer parts made in China while touring on Nov. 20 (The Washington Post)

— Apple might receive tariff exemption: Trump said “after touring a plant that assembles Apple Inc. computers that he was considering whether to exempt the U.S. company from tariffs on imports from China,” Reuters’s Steve Holland report.

“‘We’re looking at that,’Trump said in answer to a reporter’s question about the tariffs, after touring a plant in Austin, Texas, with Apple Chief Executive Tim Cook that assembles the company’s Mac Pro desktop computers. Cook, who has a strong relationship with Trump, has sought relief for Apple from the U.S. tariffs, which are part of a months-long tit-for-tat trade war between the world’s largest economies.

Meanwhile, Trump expected to sign Hong Kong bill despite Beijing’s threats: “Trump is expected to sign legislation passed by Congress supporting Hong Kong protesters, setting up a confrontation with China that could imperil a long-awaited trade deal between the world’s two largest economies,” Bloomberg’s Daniel Flatley and Justin Sink report.

“The bill, approved unanimously by the Senate on Tuesday, passed the House 417-1 on Wednesday and could go to Trump as soon as Thursday. A person familiar with the matter said Trump plans to sign the bill … Trump has been largely silent on the Hong Kong protests as they escalated into violence in recent weeks, even as lawmakers of both parties demanded action. Chinese officials quickly responded to the bill’s Senate passage Tuesday, saying Beijing ‘firmly’ opposes the congressional action and calling it a grave violation of international law.”

TRUMP WATCH:

— Mulvaney’s former CoS is now a payday loan lobbyist: “Over the past 2½ years, Mick Mulvaney’s former chief of staff has been a key lobbyist for one of the country’s largest payday lenders, giving the industry access to the White House at a time it is fighting to roll back industry regulations,” my colleague Renae Merle reports.

“During that time, Al Simpson has met repeatedly with Mulvaney, whom he worked for on Capitol Hill until 2017. They have had dinner several times, and Simpson has been a frequent visitor to the Office of Management and Budget, according to public records. The visits to the OMB overlap with the period Mulvaney was acting director of the Consumer Financial Protection Bureau, which has oversight of the payday lending industry. While Mulvaney has served as Office of Management and Budget director, the White House has proposed cutting the bureau’s budget and curbing its enforcement powers.”

IMPEACHMENT MINUTE:  A speed read on the latest from the congressional impeachment inquiry.

U.S. ambassador to the European Union Gordon Sondland undercut at least nine different Republican defenses of President Trump’s actions on Ukraine on Nov. 20. (The Washington Post)

"Sondland acknowledges Ukraine quid pro quo, implicates Trump, Pence, Pompeo and others." By The Post's Rachael Bade, Aaron C. Davis and Matt Zapotosky 

"Sondland’s bombshell testimony leaves Trump’s Republican allies scrambling." By The Post's Seung Min Kim, Josh Dawsey and Kayla Epstein

POCKET CHANGE

Charles Schwab in talks to buy TD Ameritrade. CNBC's Becky Quick and Terri Cullen: "Charles Schwab is in talks to buy TD Ameritrade, a source told CNBC’s Becky Quick on Thursday. A deal could be announced as early as Thursday. Shares of TD Ameritrade soared more than 20% in premarket trading on the report. Schwab’s shares rose 7%. A deal between Schwab and TD Ameritrade would consolidate an industry going through massive disruption. In recent months, all of the major brokerages have announced plans to go to zero commissions."

— GM files racketeering lawsuit against Fiat Chrysler: “General Motors filed a racketeering lawsuit against rival automaker Fiat Chrysler, accusing the company of bribing officials at the United Auto Workers union for more favorable contracts,” my colleague Eli Rosenberg reports.

“The lawsuit, filed in federal court in Michigan, alleges that Fiat Chrysler gave more than $1.5 million worth of payments and other things of value to UAW officers to manipulate contract negotiations during the course of two collective bargaining agreements in 2011 and 2015.”

— UAW president resigns amid corruption probe: “United Auto Workers President Gary Jones resigned … amid a federal corruption investigation targeting him for embezzling more than $1.5 million in union funds, capping a steep fall for one of the country's most powerful labor leaders,” the Detroit News’s Robert Snell, Kalea Hall and Breana Noble report.

“The resignation came two months after The News linked Jones to what federal prosecutors labeled a conspiracy to embezzle more than $1 million in union dues that were spent on personal luxuries in California and Missouri — and three months after federal agents raided his Canton Township home. The News also identified Jones last month as the unnamed UAW officer accused by federal investigators of helping embezzle $700,000 in member dues.”

— Wexner’s future at L Brands is in question: “Les Wexner, chief executive of Victoria’s Secret parent L Brands, has never been under more pressure,” CNBC’s Lauren Hirsch reports.

“The company, which also owns Bath & Body Works, has seen its shares fall more than 30% this year, hitting a 52-week low of $15.80 Wednesday. Sales have lagged at Victoria’s Secret as shoppers increasingly see its products as exclusionary and too provocative in the #MeToo era. Perhaps most troubling of all the shadows over Wexner, however, is that of late sex criminal Jeffrey Epstein. The retail tycoon earlier this year acknowledged his close ties to Epstein, including that he gave the disgraced financier power of attorney.”

MONEY ON THE HILL

Senate to vote on spending bill as shutdown looms. CNN's Clare Foran and Ted Barrett: "The Senate will vote on Thursday on a short-term funding bill to avert a government shutdown as the clock ticks down to an expiration of government funding that would trigger a shutdown if lawmakers don't act in time to prevent it. Government funding expires at midnight on Thursday. The House passed a short-term funding bill, known as a continuing resolution, earlier in the week to extend funding through December 20.

"The Senate will hold a vote series starting at 11:30 a.m. ET that will include a vote on final passage of the measure, which is expected to pass in the upper chamber. It will then go to President Donald Trump for his expected signature."

— Tesla and Uber draw scrutiny at Senate hearing: “Several Senators offered sharp criticism of Tesla and Uber during a Commerce Committee hearing on self-driving vehicles,” CNBC’s Lora Kolodny report.

“At today’s hearing, the heads of both agencies faced questions from senators who were, in turns, excited by the promise of self-driving cars, but concerned about issues from driver and pedestrian safety to traffic. Now, NTSB is urging NHTSA to put some conditions on developers who want to test, market and deploy semi- or fully-autonomous vehicles on U.S. roads.”

THE REGULATORS

CHART TOPPER

DAYBOOK

Today:

  • The Labor Department releases the latest jobless claims
  • Macy's, Nordstrom, Gap and Shoe Carnival are among the notable companies reporting their earnings, per Kiplinger
  • The Financial Services task force on Financial Technology holds a hearing on big

Friday:

  • Foot Locker, Buckle and J.M. Smucker are among the notable companies reporting their earnings, per Kiplinger

THE FUNNIES

BULL SESSION

Here's a roundup of six claims from the fifth Democratic presidential debate of the 2020 campaign. (The Washington Post)