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Editorial: Wall Street titans say they fear Bernie, but even Bloomberg’s got their number now

  • FILE - This Jan. 31, 2020 file photo shows a sign for Wall Street in New York.(AP Photo/Mark Lennihan, File)

Published: 2/22/2020 10:10:13 PM
Modified: 2/22/2020 10:10:11 PM

Lloyd Blankfein, retired chairman of Goldman Sachs, warned earlier this month that if Bernie Sanders is elected president, he would “ruin our economy.”

Blankfein speaks — or in this case, tweets — with a certain amount of authority on the subject of ruining the economy, having been there and done that in 2008 along with the other big Wall Street investment bankers who were bailed out by the taxpayers.

Goldman Sachs in 2016 agreed to pay a $5 billion fine “for its serious misconduct in falsely assuring investors that securities it sold were backed by sound mortgages, when it knew they were full of mortgages that were likely to fail,” the U.S. Department of Justice said at the time. It noted that Goldman’s misconduct contributed “to an international financial crisis that people across the country ... continue to struggle to recover from.”

None of that misery seems to have affected Blankfein’s personal fortunes. When he retired in 2018 after 12 years at the helm of Goldman Sachs, he was a billionaire. And maybe that’s what he meant by “ruin our economy” — the economy of the 0.1% of households that have net worth above $32 million, which Sanders has targeted with a proposed annual “extreme wealth” tax.

In one way, the note of barely suppressed panic in Wall Street’s reaction to the Vermont senator’s early success in the race for the Democratic presidential nomination is unwarranted. Over the years, Sanders has displayed a pragmatic streak and willingness to compromise, although those traits fly well under the radar of his aggressive, progressive policy stances and confrontational rhetoric.

As Washington Post columnist Paul Waldman recently noted, U.S. Rep. Alexandria Ocasio-Cortez, perhaps Sanders’ most prominent supporter, allowed as much recently in acknowledging that there is an “inherent check” on a president’s ability to remake something as massive and complicated as the health care system.

And if his signature “Medicare for all” proposal doesn’t happen in the near term, as it almost certainly will not, what’s the worst case scenario? “We compromise deeply, and we end up getting a public option,” said Ocasio-Cortez. “Is that a nightmare? I don’t think so.” Not only wouldn’t it be a nightmare, it would be a giant step toward universal health care coverage, which we are convinced will eventually come about.

Moreover, as Waldman pointed out, it doesn’t make sense for Sanders to signal now that he would not let the perfect be the enemy of the good, because “to compromise with yourself before negotiations begin” is to cede an advantage without getting anything in return.

On the other hand, Blankfein and company perhaps have reason to worry about fellow billionaire Michael Bloomberg, whose late-to-the-party Democratic presidential bid now includes a package of proposed Wall Street regulations of the kind he once characterized as “shortsighted.”

These include increased capital requirements for the big banks to avoid the need for another taxpayer bailout; a 0.1% tax on stock sales; rewriting the Volcker Rule that was imposed in the wake of the 2008 crisis to focus on speculative trading; creating a unit in the Justice Department targeting corporate crime that would be encouraged to pursue not only financial institutions themselves but also individuals responsible for corporate misconduct; and strengthening the Consumer Financial Protection Bureau.

There can be little doubt that Bloomberg is a friend of Wall Street. After all, he made $63 billion selling data there. If he has concluded that he needs to echo Sanders and Elizabeth Warren to compete for the Democratic nomination, it is a testament to just how successful those two progressives have been in pushing the party to the left of center on this issue (as on others). And it increases the odds that Wall Street will not be allowed to again ruin the American economy.




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