It is a season of worry on Wall Street. The not-quite-stable stock market isn’t really the problem. No, the problem is the Democratic Party and voters in general. As Politico’s Ben White reported on Monday, Wall Street executives “are getting panicked about the prospect of an ultraliberal Democratic nominee bent on raising taxes and slapping regulations on their firms.”
The men — and occasional women — of finance have Sen. Elizabeth “Wealth Tax” Warren (D-Mass.) and possibly Sen. Bernie Sanders (I-Vt.) to their left. There’s a new political star, Rep. Alexandria Ocasio-Cortez (D-N.Y.), carrying the flag for a return to a 70 percent marginal tax rate for income in excess of $10 million. Polls show a majority of Americans want to see tax increases on the wealthy.
And then to their right, there’s President Trump. He gave Wall Street what they wanted, at least financially — a deregulation agenda, and a monster of a tax cut for the wealthiest Americans, all the while leaving the forever threatened carried-interest loophole intact. But he hurt business and Wall Street with his stances on immigration and trade with China. He also brings out the bigots and is a global-warming truther, things that pose a problem for those in finance, who see themselves as “socially liberal.” Their children complain.
And there is also the Trump-related chaos. Business hates chaos! Bad things happen, like government shutdowns that impact their ability to fly out of major airports such as like LaGuardia in New York. It could have caused a recession!
The titans of finance see themselves as inclusive and well-meaning. Many are self-defined centrists, meaning they are socially liberal and fiscally conservative. They are against the deficit when it comes to expanding benefits to the population of voters, but are often less vehement about the issue when it comes to tax cuts for the wealthiest Americans.
Former Starbucks chief executive Howard Schultz speaks to them, or would if he wasn’t risking dividing up the anti-Trump vote, especially when he says things like, “What the Democrats are proposing is as false as the wall. And that is free health care for all, which the country cannot afford” and “we can go after entitlements,” without mentioning raising things such as Social Security’s payroll tax cap. So does former New York mayor Michael R. Bloomberg, who comes with the added benefit of having proved he could govern, and who said about Warren, when she was first running for Senate in 2012, “You can question, in my mind, whether she’s God’s gift to regulation, close the banks and get rid of corporate profits, and we’d all bring socialism back, or the U.S.S.R.’’
But Schultz and Bloomberg can’t win, Wall Street believes, not in the Democratic Party of 2019, the one in which Medicare-for-all, whatever it means, is now all but a litmus test. They could instead back Sens. Kamala D. Harris (Calif.), Kirsten Gillibrand (D-N.Y.) or Cory Booker (N.J.), all of whom eschew PAC money and say they support Medicare-for-all — even as they seek out meetings with Wall Street honchos. Surely that’s like a still-subsidized millennial, badmouthing their parents to their friends, but making sure they don’t do something so out-of-line they get tossed from the family smartphone plan. The men and women of Wall Street also trust former vice president Joe Biden and former Texas congressman Beto O’Rourke, even though, as White so delicately phrased it, “few really know his positions.” But still — he’s a 6-foot-4-inch white guy from Texas who can raise money from the masses, even though his father-in-law is a billionaire real estate investor. Besides, the progressives don’t think O’Rourke is progressive enough.
True, Wall Street feared President Barack Obama. Many badmouthed him frequently. (Blackstone co-founder Steve Schwarzman compared a proposed tax increase that never came to pass as “like when Hitler invaded Poland in 1939.”) But, in retrospect, those were halcyon days. No major Wall Street figure was ever indicted on charges stemming from the financial crash. The stock market more than doubled under Obama’s watch. Besides, you could criticize Obama publicly and not worry that he would lambaste you on Twitter, and not resort to giving anonymous carping quotes to Politico out of "fear of angering a volatile president.”
The real issue is one that big finance can’t acknowledge: They got to have it all for decades. Even as the incomes of ordinary Americans stagnated while their own pay and wealth soared, the people of Wall Street could adopt socially progressive positions on matters of lifestyle and race and still call themselves moderate centrists. They could donate small portion of their money — as much as they choose ! — to charities to help the poverty-stricken, and get taken seriously as philanthropists, while getting to set the agenda. Their anger and fear isn’t just at the fact they are getting challenged on their self-righteous self-image. More than anything, they don’t want to admit their 40-year run at the tax-cut and deregulation punch bowl will need to come to an end, so the rest of us can once again prosper.