Wall Street is in a bind. Normally, the presidential election features two candidates who are both beholden to its interests and thus enables them to watch the process with complacency but this time the picture is a little confused.
On the Republican side there is Donald Trump who has, as usual, said a whole bunch of contradictory things that have left unclear where exactly he stands with respect to curbing the freedom of the big banks to risk wrecking the economy again. On the Democratic side, Hillary Clinton is undoubtedly friendly to them but the insurgent campaign of Bernie Sanders has tapped into a vein of populist anger against them that Clinton has to handle carefully if she is not to alienate the Sanders voters even more. So she has made a few gestures towards bank regulations that Wall Street no doubt thinks is just lip service.
But the rumors that she is considering Elizabeth Warren as a possible vice-president has alarmed them and they are sending out signals using anonymous sources that if Clinton does make that pick, they will abandon her.
Big Wall Street donors have a message for Hillary Clinton: Keep Elizabeth Warren off the ticket or risk losing millions of dollars in contributions.
In a dozen interviews, major Democratic donors in the financial services industry said they saw little chance that Clinton would pick the liberal firebrand as her vice presidential nominee. These donors despise Warren’s attacks on the financial industry. But they also think her selection would be damaging to the economy. And they warned that if Clinton surprises them and taps Warren, big donations from the industry could vanish.
“If Clinton picked Warren, her whole base on Wall Street would leave her,” said one top Democratic donor who has helped raise millions for Clinton. “They would literally just say, ‘We have no qualms with you moving left, we understand all the things you’ve had to do because of Bernie Sanders, but if you are going there with Warren, we just can’t trust you, you’ve killed it.’”
Most big donors don’t want Warren on the ticket because she is the most accomplished anti-Wall Street populist in the Democratic Party. But many also think her presence would drive a potential Clinton administration too far to the left, poison relations with the private sector from the start and ultimately be damaging to the economy.
The distaste for Warren in the banking industry is not surprising. No American politician in recent history has done more to harness the powerful anti-Wall Street sentiment that continues to rage in the country since the financial crisis of 2008.
Warren created the Consumer Financial Protection Bureau that many bankers dislike, and she continues to push for far stronger regulations including breaking up the nation’s largest financial institutions into smaller, simpler pieces. This is exactly the reason that many on the left, including ardent backers of Sen. Bernie Sanders’ presidential campaign, want to see Warren on the ticket.
This is clearly a pre-emptive move on their part. The big banks prefer to exercise their control over politicians quietly behind the scenes and it must be a bit galling for them to have their manipulations be out in the open like this.