The .01 Percent Freakout Over Elizabeth Warren Just Makes Her More Powerful

Wall Street is vocally unhappy with the idea of a Warren presidency. That's kind of the point.
September 12, 2019, 8:50pm
A splitscreen of Jim Cramer and Elizabeth Warren
Left: Jim Cramer, photo by Steven Ferdman/Patrick McMullan via Getty. Right: Elizabeth Warren, photo by Chip Somodevilla/Getty

"If she becomes president, what do you think will happen to the banks?"

That was the question posed by financial journalist David Faber on CNBC Tuesday about Elizabeth Warren, and what a Warren presidency would portend for CEO types and the financial class in general. The consensus of Faber and Mad Money host Jim Cramer—himself a former banker and hedge funder—was that Wall Street was more than a little worried. "When you get off the desk and talk to executives, they’re more fearful of her winning," Cramer said. He went on to bring up the specter of the 1930s, when "they brought rich people in front of Congress and just kinda trashed em," and spoke of a "she's gotta be stopped" attitude in boardrooms across America.


In other words, there's tangible Warrenphobia going around, at least in the right-of-center media. And that is extremely good news for the surging Democratic presidential candidate who built her brand on post-financial crisis rage at banks and bankers.

On Wednesday, the New York Post ran an op-ed from Fox Business correspondent Charles Gasparino that laid out the alleged thinking of anonymous senior bank executives: Her proposals to tax and regulate the banks that helped caused the 2008 financial crash will result in lower stock prices, hurting not just the bank executives but, Gasparino wrote, "every teacher, fireman and cop," as stock market drops might harm 401(k)s retirement accounts held by normal working people.

That echoed a warning in a Tuesday Wall Street Journal op-ed from a right-wing think tank scholar and a hedge fund advisor, who were worried specifically about a Warren proposal to require large corporations to let their workers elect 40 percent of their boards. That idea is part of an effort to force corporate America to consider more than just bottom-line shareholder value when making decisions that could impact millions. "It’s your life savings on the line—not the bankroll of some modern-day John D. Rockefeller—when Democrats push to limit companies’ methods of enriching their shareholders," the WSJ writers claim. (This is a sketchy form of populism—though it's true that slightly more than half of Americans own stock either individually or as part of a fund, the vast majority of stocks are owned by the wealthiest 10 percent of Americans.)


On Fox & Friends, the WSJ's much rowdier cousin, conservative commentator Stuart Varney turned it up a notch, calling Warren's Accountable Capitalism Act a "disaster," and "socialist takeover of American business." Under that leftist regime, Varney said, some corporate profits "would have to go to the workforce, the community, customers, the local and global environment, and community and social factors—whatever that may be."

Warren's supporters—and Warren herself, who approvingly retweeted that CNBC clip—have met all this with outright glee.

Yes, Warren wants to require companies to be more mindful of customers and workers. And yes, she definitely would try to more tightly regulate banks and hold corporations accountable. That's… sort of the point? The idea that government should rein in Wall Street has been one of the Massachusetts senator's obsessions for years, and she was so fixated on it that she royally pissed off some in the Obama administration, which she repeatedly criticized as being soft on big finance. That she supports these things, and that various Wall Street suits blanch at the thought of them, is not news. What's news is that the boardrooms now think of her as someone who has to be stopped.

The finance world may yet stop her through donations to Joe Biden, the relative moderate currently leading in the Democratic primary polls, or even to Donald Trump, should Warren win the nomination. But they will not stop her through complaints issued through mouthpieces on cable news and right-wing papers. In fact, this kind of whinging could start a sort of feedback loop of buzz for her candidacy, especially among young people who are broadly more skeptical of capitalism than their parents.

It doesn't hurt Warren that every one of the denunciations against her has been prefaced by praise. "She keeps going up in the polls," said Cramer during the CNBC clip. "She’s going to win Iowa, I believe. She’s a very compelling figure on the stump." Varney noted her candidacy is "rising sharply." The Post column: "The bank execs note that Warren is smart and driven, and they fear she may be starting to break out of the pack, where she can do some damage."


Presumably, the anonymous rich people cited by Cramer and the Post are no less turned off by the idea of a Bernie Sanders presidency, given that the Vermont senator's rhetoric is explicitly socialist and if anything, more anti-rich than Warren. (Some Wall Street types told Politico earlier this year they preferred Warren to Sanders.) What they're responding to is Warren's summer-long rise in the polls: She came out on top in a recent survey that had Democratic voters rank the candidates in order of preference, and is more liked among Democrats than Joe Biden, according to another poll. And despite her slew of left-wing policy proposals, many Democrats see her as more moderate than Sanders, which could help her persuade Democrats that she's electable. Those worried about a Warren presidency may even be aware that according to one poll, her proposal to give workers a voice on corporate boards is supported by a majority of likely voters, and even many Republicans—all the more reason to try to defeat her.

The people who run banks can be wrong, of course, as anyone who watched them melt down due to their own bad decisions in 2008 can tell you. Maybe they should be more concerned about Sanders, who is leading in some New Hampshire polls. No doubt they'll be gnashing their teeth and rending their expensive garments if either Sanders or Warren displaces Biden in national surveys.

Meanwhile, Warren has no reason to worry about this kind of news cycle. After all, spooked banker types aren't the people she has to persuade—they're the people whose money she wants to take.

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