A Gamble That Paid Off: When Bernie Was Riding High, Wall St. Saw A Distressed Asset In Biden-- And Bought Low

The Republican wing of the Democratic Party lined up behind Biden early, though it wasn't enough to animate his DOA campaign-- not until Obama stepped in and told the party establishment the enough time had been wasted and that Bernie could win and take away everything they had built for themselves if they don't unite behind Biden. So they did. Was anyone surprised? Was anyone surprised when Republican elites started flocking to Biden-- first in a trickle and now in a steady stream?

So why would anyone be surprised that Biden-- who has spent his entire career in politics fellating Wall Street-- would be embraced by the banksters and junior-banksters who were FDR's and the working class' sworn enemies but have been assiduously cultivated by the Bill Clinton breed of Democrats?

Over the weekend, the NY Times published a piece by Kate Kelly, Shane Goldmacher and Thomas Kaplan, The Wallets of Wall Street Are With Joe Biden, if Not the Hearts that will thrill many Democrats and chill many others. The story barely mentions Bernie-- just once when he and Elizabeth Warren were dismissed-- but Bernie, fear of Bernie to be precise, was the impetus for Biden's rise among the financial elites. This story though is about how Trump is pushing Wall Street into the Biden camp. After donating millions to Biden to beat Bernie, that money "helped him build a strong lead in national polls." But with the threat of Bernie off the table, what would Wall Street do next?

"Wall Street," wrote the Times trio, "has fared extraordinarily well under Mr. Trump: deep cuts to taxes, slashed regulations and, until the pandemic hit, record stock prices. But in recent months, dozens of bankers, traders and investors said in interviews, a sense of outrage and exhaustion over Mr. Trump’s chaotic style of governance-- accelerated by his poor coronavirus response-- had markedly shifted the economic and political calculus in their industry. More and more finance professionals, they say, appear to be sidelining their concerns about Mr. Biden’s age-- 77-- and his style. They are surprisingly unperturbed at the likelihood of his raising their taxes and stiffening oversight of their industry. In return, they welcome the more seasoned and methodical presidency they believe he could bring. They may not exactly be falling in love with Mr. Biden. But they are falling in line." And they know that the raising won't be too high and the stiffening won't be too painful. Biden said so himself. He's not called Status Quo Joe just because it rhymes.

Now... ready for silly?

“I’ve seen meaningful numbers of people put aside what would appear to be their short-term economic interest because they value being citizens in a democracy,” said Seth Klarman, founder of the hedge fund Baupost. A longtime independent, Mr. Klarman was at one point New England’s biggest giver to the Republican Party. But in this cycle, he has given $3 million to groups supporting Mr. Biden.

Or as James Attwood, a managing director at the Carlyle Group and a former investment banker at Goldman Sachs, put it, “For people who are in the business of hiring and firing C.E.O.s, Donald Trump should have been fired a while ago.” (Mr. Attwood contributed $200,000 in June to the Biden Action Fund, a joint committee with the Democratic National Committee.)

In May and June alone, the Biden Action Fund raised more than $11.5 million. That tally-- a good measuring stick for Wall Street support because it was set up in part to draw contributions from that industry-- included $710,000 from Josh Bekenstein, a co-chair of Bain Capital, and his wife.

But Wall Street money has proved to be a double-edged sword for Democrats, as Hillary Clinton discovered when she was hounded four years ago for delivering private speeches to Goldman Sachs and other firms. Progressive voters and activists-- many of whom backed Mr. Biden’s more liberal rivals in the primary-- are particularly leery of any appearance of coziness with the finance industry.

Leery... imagine that! Why would progressives be leery of the working class' historical enemies? Everything that is wrong with the world... follow the money. Our Times trio wrote that when asked about Wall Street’s role in Biden’s current bid, the campaign spits out all the Biden bullshit about how he fights for the common man, which is quite at odds with his repulsive record of fighting against the common man. Our trio hates Trump so they refrain from noting that although they reluctantly admit that "As a senator from Delaware, Mr. Biden has for decades had relationships with credit-card companies there, but less of a presence in the financial power center of New York. He has counted a small circle of finance executives as supporters. Marc Lasry, the co-founder of Avenue Capital, for example, held a fund-raiser for Mr. Biden during his first run for president in 1988, and continues to back him now. The former hedge-fund executive Eric Mindich and the short-seller James Chanos have been supporters from well before the pandemic began. It doesn’t hurt that Mr. Biden has also not crusaded against Wall Street, the way his primary rivals Elizabeth Warren and Bernie Sanders did. Financial executives mostly seem to believe that while their taxes would rise in a Biden administration, they would not be subjected to the kind of 'fat cat' rhetoric that soured some of their relationships with former President Barack Obama." Feel better now? How about this then? "'Rich people are just as patriotic as poor people,' Mr. Biden told donors at a fund-raiser at the Carlyle Hotel in Manhattan last year. At a Brookings Institution gathering in 2018, he said, 'I don’t think 500 billionaires are the reason why we’re in trouble.'" Biden is wrong; they are.

Biden’s more benign stance toward the finance industry has provoked skepticism among advocates for stricter regulation. “When the candidate doesn’t have a clear plan on something like Wall Street reform, it tilts the playing field toward what is probably the most powerful industry in the world,” said Carter Dougherty, a spokesman for Americans for Financial Reform, an advocacy group. “We need more than ‘not Trump appointees’ when it comes to financial regulation.”

While Wall Street financiers tend to be more socially liberal, they have collectively swung back and forth between parties. Data from the Center for Responsive Politics show the securities and investment community donating more to President George W. Bush in 2004, and then to Mr. Obama in 2008, and then to Mitt Romney in 2012, followed by Mrs. Clinton in 2016, than to their respective presidential rivals.

This year, it’s Mr. Biden. Financial industry cash flowing to Mr. Biden and outside groups supporting him shows him dramatically out-raising the president, with $44 million compared with Mr. Trump’s $9 million.

Last month, multiple Wall Street bundlers, including Alan Leventhal, the chief executive of Beacon Capital; Nat Simons, who runs a clean-tech investment fund; and Mr. Gray, Blackstone’s president, held virtual fund-raisers for Mr. Biden. The giving has been so robust that the Biden campaign is now asking for at least $1 million in donations before it will confirm the former vice president’s attendance at an event, say bundlers.

As the checks roll in, the Biden campaign has been carefully cultivating its relationship with the business community, with a focus on Wall Street. The outreach has included offering private briefings ahead of major policy rollouts and dangling various donor packages for the upcoming, and mostly virtual, Democratic National Convention.

In one call last month, two of Mr. Biden’s top advisers on financial policy, Ben Harris and Jake Sullivan, led a wide-ranging conversation to preview the candidate’s economic plan, which focuses on broad policy initiatives like investing in green infrastructure projects and minority-owned businesses. Two former Treasury secretaries, Robert E. Rubin and Jacob J. Lew, were part of the call.

Several major Wall Street executives and investors were also present, including Blair Effron, co-founder of the financial advisory firm Centerview Partners; Penny Pritzker, a fund-raiser and former commerce secretary; David Cohen, a top Biden bundler and Comcast executive; and Eric Schmidt, the former chief executive of Google.

...[H]ow Mr. Biden might affect their wallets is still a major concern for industry executives who aggressively fought the implementation of new regulations after the financial crisis of 2008. Some in the business community have suggested tweaks to the former vice president’s tax and economic policies in ways that might soften the impact for companies.

At a separate July meeting with campaign staffers and a handful of Wall Street participants, Charles Phillips, chairman of the software company Infor and a onetime Morgan Stanley tech analyst, argued that Mr. Biden shouldn’t make huge expenditures on infrastructure and other new programs without also identifying spending cuts. “We can fund some of this by getting more efficient and getting rid of waste that no one will miss,” Mr. Phillips recalled saying. He said he also argued for a simpler tax code with a corporate rate lower than Mr. Biden’s proposed 28 percent.

In addition to those watching the policy details, many financiers are closely attuned to Mr. Biden’s selection of a running mate, arguing that they might reconsider their votes if he were to choose someone like Ms. Warren, whose campaign sold coffee mugs that read “Billionaire Tears” in a nod to her proposed wealth tax on the superrich.

Some in the finance industry are concerned about Ms. Warren’s emergence as an informal policy adviser, and the possibility that she could be installed as Treasury secretary.

Mr. Biden’s policy platform on the issues affecting Wall Street’s most affluent players has been relatively sparse. He has proposed a series of tax increases on businesses and on wealthy individuals, including raising the top marginal income tax rate and taxing capital gains as ordinary income for the richest Americans. But he has not embraced a wealth tax like Ms. Warren’s, nor has he rolled out any kind of detailed policy plan focused on financial regulation.

Since Mr. Biden became the presumptive Democratic nominee, the campaign has appointed Rufus Gifford, a former finance director for the 2012 Obama campaign, as a deputy campaign manager overseeing the money operation nationwide. Mr. Gifford is in regular touch with Wall Street donors, coordinating a slew of virtual fund-raisers and discussing campaign issues with deep-pocketed financiers.

In recent meetings with donors, Mr. Biden has said that while the wealthy are going to have to “do more,” the details of his tax hikes are still being hammered out, according to someone who has attended multiple fund-raisers but requested anonymity to discuss private conversations. At a virtual fund-raiser held in July, the candidate spoke of the need for corporate America to “change its ways.” But the solution, he said, would not be legislative.

Back in February, Mr. Biden had taken a precious day off the trail to collect a critical $800,000 at two New York fund-raisers, including the one Mr. Gray co-hosted. “You’re putting me in a position to be able to be very competitive,” Mr. Biden said, thanking his Wall Street supporters.

A few of his finance industry donors, looking back, have privately remarked how the evening turned out to be the most quintessential of Wall Street plays: seeing a distressed asset at that time, and buying low.

Republican Phil Heimlich, a former Cincinnati City Council member and Hamilton County commissioner, is a principal in the #NeverTrump group, Republicans For the Rule of Law and a founder of Operation Grant, an offshoot of the Lincoln Project for Ohio. Over the weekend, USA Today published an OpEd he wrote about how Ohio conservatives are abandoning Trump for Biden. Trump, he complains, hasn't lead as a true conservative. "In 2016, many Ohio voters put their faith in Donald Trump, us included. That was an error of judgment, not intent. For these reasons, we’re joining with other Republicans in this state to vote against President Trump this November. He has created a culture of fear within the Republican Party as well as across the country, demonizing anyone with differing opinions. He belittles, berates, and ruins the careers of all who oppose him-- including his own appointed government agency heads, respected military leaders and war heroes. He has undermined the rule of law, obstructed justice, and issued pardons and commutations to personal cronies who helped cover up his misdeeds. He has demonstrated gross incompetence during the COVID-19 pandemic, causing needless suffering and death. He has run up a $2.7 trillion budget deficit, $1 trillion of which occurred before the pandemic unfolded..." And so on. And... how much of President Biden will all these conservative Republicans own? 50%? 75% 99.9% More? Maybe I'll be proven wrong. We'll know when Biden announces his VP pick. If he choses Elizabeth Warren, I'm wrong, wrong, wrong. You know I'm not.

Yesterday Juan Cole, in his Informed Consent newsletter, asked how Americans became such wimps, quietly watching Trump kill tens of thousands, destroy Social Security, Medicare, the environment and the post office and openly plot to steal the election. "Americans," he wrote, "are masochistic sheeple who let the rich and powerful walk all over them and thank them for the privilege... The rich figured out in the 1980s that Americans are all form over substance, and if you put up for president a Hollywood actor like Ronald Reagan who used to play cowboys, they would swoon over him. In 1984 when Reagan ran against Walter Mondale, I saw a middle aged white Detroit auto worker interviewed who said he woudn’t vote for Mondale because he was a “panty-waist.” Reagan took away their right to strike and took away government services by running up the deficit and cutting taxes on the rich simultaneously, then claiming the government couldn’t provide the services the people had paid for because it is broke. Reagan raised the retirement age from 65 to 67. Why? Most young people don’t realize that their health will decline in their late 60s and they often won’t actually get any golden years."

What did Americans do in response? They just bent over and took it.

Actually, it is the French who are much more like Americans imagine themselves to be. President Emmanuel Macron last December tried to raise the retirement age from 62 to 64. I can’t understand why. France has persistently high unemployment as it is.

In response, all hell broke loose. Some 30 unions went on strike, and they supported each other. Trains were interrupted. Trucking was interrupted. Life was interrupted. A million people came out into the streets. But one poll had 61% of the French approving of the strikes. They went on for months, and were very inconvenient.

Macron backed down on raising the retirement age.

The French working and middle classes know how to throw a first class fit when the servants of the rich in government come after their lifestyles. They don’t always get their way (Macron used a parliamentary maneuver to make some changes in pensions, in late February), but they make damn sure the government knows it can’t get away with encroaching on them without a fight.

I actually think that one reason Europe has done much better in tamping down the coronavirus than Trump’s America is that the governments and corporations were afraid of a public backlash if the death toll went on rising. So they did their effing jobs.

In mid-April the Financial Times reported that the CGT workers union (which it darkly observed is under Communist influences) had filed a criminal complaint against the Carrefour supermarket chain and its CEO for not protecting its workers from the coronavirus. The unions also went to court to force Amazon to step back and only ship essential items until the courts could review the company’s safety procedures.

The only thing I know of like that in the US is the UCFW’s lawsuit against the Department of Agriculture’s waivers to poultry plants allowing them to speed up the assembly lines. During a pandemic! Workers breathing harder is undesirable with a respiratory disease floating about.

But in France, it wouldn’t have been one union filing a lawsuit (which one of Mitch McConnell’s unqualified Republican judges/ideologues will likely slap down). It would have been a massive set of mutually reinforcing strikes.

By feeding us decades of propaganda against unions and “socialism,” the American rich have broken the legs of the people, and left them to twitch helplessly as more and more indignities are heaped on them. They’ve divided us by race (Trump is not alone in this tactic, only the least subtle), they’ve convinced us to give the super-rich power because they will make us rich too. (How is that working out for you?).

There is now no mainstream political party in Western Europe that is anywhere near as far right as the GOP. The closest analogues to today’s Republican Party in Europe are the far right white supremacist parties, like Marie LePen’s National Front in France or the AfD in Germany.

It appears that a plutocracy produces fascism, since appeals to racialist superiority and playing on fears of a brown and black Other are the only things that can convince people to give up their basic human rights (like a comfortable life in retirement, which they have paid for, or the right to cast a mail in ballot during a pandemic).

But despite all the military parades and brave talk of master races, fascism is just the ultimate humiliation of the sheeple. Mussolini drove enormous numbers of Italians into poverty. The Axis used them for cannon fodder at the front. If the increasingly wimpy Americans don’t watch out, they will find that it is too late to fight back, since they have surrendered all their means to do so. So as to avoid being panty-waists and all. They will be left with a borrowed greasy cheeseburger they can’t even pay for.

Does this song and video make you cry? Human solidarity has always had such an incredible power over me.