Wall Street’s nightmare: President Elizabeth Warren
NEW YORK — There are three words that strike terror in the hearts of Wall Street bankers and corporate executives across the land: President Elizabeth Warren.
The anxiety over Warren grew Monday after a magazine report suggested the bank-bashing Democratic senator from Massachusetts could mount a presidential bid in 2016 and would not necessarily defer to Hillary Clinton — who is viewed as far more business-friendly — for the party’s nomination.
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And the fear is not only that Warren, who channels an increasingly popular strain of Occupy Wall Street-style anti-corporatism, might win. That is viewed by many political analysts as a slim possibility. It is also that a Warren candidacy, and even the threat of one, would push Clinton to the left in the primaries and revive arguments about breaking up the nation’s largest banks, raising taxes on the wealthy and otherwise stoking populist anger that is likely to also play a big role in the Republican primaries.
“The nightmare scenario for banks is to hear these arguments from a candidate on the far left and on the far right,” said Jaret Seiberg, a financial services industry analyst at Guggenheim Partners. “Suddenly you have Elizabeth Warren screaming about ‘too big to fail’ on one side and Rand Paul screaming about it on the other side and then candidates in the middle are forced to weigh in.”
A spokesperson for Warren declined to comment on whether she would consider a presidential bid against Clinton, though Warren has previously said she has no plans to run. People close to Warren note that she signed a letter from female Democratic senators urging Clinton to run in 2016. And Warren associates, mindful of any appearance of creating the narrative of a Warren-for-president campaign, have corresponded with Clinton associates to stress that they didn’t fuel the New Republic story by Noam Scheiber.
Yet the stakes for Wall Street and corporate America of a Warren campaign — and possible victory — are hard to overstate.
She almost certainly would bring fresh scrutiny to Wall Street scandals by arguing that even giant settlements — like the $13 billion JPMorganChase is expected to pay to end probes into its mortgage practices — are nowhere near enough to make up for the damage done during the financial crisis.
Warren in the Senate has pushed regulators hard both to go after individual bankers and to demand guilty pleas as part of any settlement deals with institutions. She also would probably talk about other bread and butter issues that make large amounts of money for banks but outrage average citizens, including interest on student loans, credit card fees and ATM charges.
And she would likely hammer away at the gap between executive pay and average wages and make the case for higher taxes on investment income enjoyed by the wealthiest slice of Americans.
The fear of a Warren candidacy is likely to drive even more Wall Street money to Clinton’s potential campaign and attendant super PAC, “Ready for Hillary,” which will help the former secretary of state and New York Senator build up a massive war chest to beat back any possible challenge from the left.
But the very creation of that war chest — and Hillary Clinton’s many well-paid speeches to Goldman Sachs and other other financial firms — could also play directly into an argument by Warren, or another candidate on the left, that Clinton is beholden to Wall Street and not well-suited to address issues of wealth concentration and financial regulation.
“A Warren candidacy would bring a fresh level of scrutiny to both Hillary and Bill Clinton’s relationships with Wall Street, and they will have to deal with that,” said a progressive Democrat sympathetic to Warren, who declined to be identified by name for fear of angering the powerful Clintons. “There is a clear tension between what the Clintons say and what lines their pockets. They have become fabulously, unimaginably wealthy” in part through speeches to banking groups.
Clinton insiders have taken note of the energy that Warren represents. They don’t exhibit the same level of dismissiveness that once existed in her orbit around then-Sen. Barack Obama. But most familiar with Clinton’s world interpreted it as Warren getting attention for issues without advancing the likelihood of a campaign.
Even people who admire Warren were clear-eyed about where things stand now.
Read more: http://www.politico.com/story/2013/11/wall-street-elizabeth-warren-president-2016-elections-99697.html#ixzz2kSU1wDFL
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