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What Does Wall Street Fear in Warren?

Some thoughts about Wall Street’s trepidation over Senator Elizabeth Warren’s presidential bid.

The word is that Wall Street doesn’t want to buy what Elizabeth Warren is selling. There are doommongers claiming large drops in stock prices, corporate earnings, plus wealth fleeing the country, should the Massachusetts senator be elected president.

The problem is simple enough. They fear broad changes to our system. They fear tax hikes (including a likely-unworkable wealth tax) and regulations. They don’t want those things for themselves, and they see them as harmful to the economy and to America.

They don’t have, apparently, anything to say about the problems of this country as they exist today (nor those on the horizon). It is only the future problems that Warren might cause, assuming a zombified Congress that passes everything she campaigns on, that have their starched collars falling limp with sweat.

What gives?

It’s a pattern they should be familiar with, after all. A firm grows plump and lazy, lets its problems build up, and then someone like Warren comes in and chops it up and sells off the parts. Wall Street is the fattened Thanksgiving turkey, ripe for a Warren slaughter, no?

Once again we visit two favorite issues: healthcare and climate.

On healthcare, Medicare-for-All is attractive to some because it provides not just coverage, but security in coverage. People are tired of worrying what the next premium hike will be, whether the Republicans will repeal their care altogether, whether the drug that is keeping them alive will see its price spike, or whether it will disappear entirely when it’s no longer profitable to keep them alive.

Warren backs Medicare-for-All for the security it establishes in a vital sector of our economy, precisely because there has been no security offered by the commercial interests. The invisible hand hasn’t healed itself of the basic problems of scarcity in the face of necessity. If it could, maybe Wall Street could avoid a big structural change. But they haven’t made any calls-to-action on that front.

The market signal is as loud as the church bells of old, calling all to attention. Yet it is only used to signal how dysfunctional the system has become. It doesn’t seek to improve the systems, only to exploit them. Go figure that a lot of people see that and wonder what’s the point of having a big, fancy society if it fails on basic tasks. And that’s not even getting into the national security implications of an inadequate healthcare system.

On climate, we face similar challenges and, like healthcare, climate seeps into the whole economy because every good or service needs energy and that means it needs to be included in ensuring we aren’t setting up our future to be throttled by nature’s own big structural change. Yet the Wall Street crowd is drooling over buying into an IPO of Saudi Arabia’s oil. They obviously don’t get it. Again, no calls-to-action, no lobbying for an across-the-board regulation, like a carbon tax, so that no one sector is singled out. Just a wait-and-see, let’s-not-get-ahead-of-ourselves, maybe-we-can-make-a-lot-of-money-off-of-our-childrens’-miseries approach. Good-luck-with-that.

When a firm is failing to keep itself up, the private equity firms step in. They are the slaughterhouses of commerce, experts at identifying the prime cuts, slicing them off, selling them, and then leaving the carcass behind. And any state-of-nature ecosystem needs predation to cull the weaklings and keep the herd strong. But right now Wall Street is looking like that weakling that is holding back growth, slowing things up, blocking migration to greener fields. If they have the ability to change their ways, so be it. If not, they have to expect nature to take its course.

On the political side of things, Warren is locked-in on Medicare-for-All. Which is what it is. Campaigns need bright-line ideas to appeal to voters, but there are a lot of opportunities outside of that plan to improve healthcare and the larger society at the same time. In all cases, they prospect better economic outcomes and larger GDP as a result (which is one of the many reasons one must question the capacity of Wall Street in these matters).

Once the party nominee is chosen, though, whether Warren or someone else, their healthcare plan will be compared to Donald John Trump’s… his, uhm… What I’m apparently reading is that the president’s campaign doesn’t actually have any plan at all for healthcare (or any other major issue). He’s not fit to govern, and Wall Street should literally be begging (they might have to take a few classes to get down the basics) for a coherent leader like Warren, even if they disagree, because they can work on compatible solutions with her, where with Trump, you can’t compromise with chaos.

For clarity, those who are proposing things that approach the scale of the problem are those pushing for things like Medicare-for-All and the Green New Deal. Those aren’t the best solutions, but they at least get the magnitude right. Those who are proposing less-than-correct options are those pushing for public options or electric vehicle credits. Those who aren’t proposing anything: the GOP and Wall Street.

Other big-idea ideas (or parts thereof) do suck. Take the free-college stuff. They don’t propose building more colleges, which is a big flashing-red light. Increasing demand without increasing supply is bonkers. Wealth taxes miss the mark, not because of their inherent problems (though they do suffer from those), but because they are much easier to enact through alternative means such as luxury taxes, VATs, and real estate taxes (particularly alternative-use taxes that recognize, e.g., a big estate in a place that could use low-income housing is an inherent inefficiency that should be taxed as such). But those are a stories for another time.

Choosing Sides in Debates and Gluing Our Hands to Our Faces

Bit of a ramble about choosing sides in debates.

We often think of one of the sides in an argument as the side to which we belong and the side which belongs to us. People tend to affiliate with one of the two, either chocolate or vanilla, conservative or liberal, painting the bike shed or knitting the bike shed a tea cozy. The issues of our day both big and small.

But if we take ownership, it’s much more likely we will be unwilling to see the light of day in the opposition’s arguments. That is, once we establish our archetype as persons includes an unfaltering belief in some position, we have glued our hands to our faces. We will be very wary of changing after that. Any change will have to be gradual rather than abrupt.

That’s not what we see from politicians, but it does seem to be how most people shift from strong, firm beliefs. With politicians, the game is to pick the right position first and figure out the details later. Flippancy.

One interesting scenario is what happens if you glue one hand to your face, and your other hand to the first, but then tear off the first hand. We saw that happen in the United States back in the 1960s with the whole of the south switching abruptly to the Republican party. It’s about equal to de-clothing a table in a swift motion, in that it appears to make no difference to the table or the items on top. But that’s an analysis for another time, of a change notable both in its abruptness and its staying power.

Choosing sides should not be a matter of membership. We confuse it with membership in a club, sometimes, due to the need to form clubs for advocacy, or if everyone on one side of the issue has some common characteristic, etc.

But in some cases the other side doesn’t really exist, yet we still have the club and membership. Nobody is creating a ‘save the cancer’ foundation. A non-agent (and in some ways a non-entity, depending on how you define these things) is the opposition in that fight. Nobody wants the bulls to win in the running of the bulls.

For many issues we face in the world, especially the big issues that threaten us collectively, polarization leads nowhere. The status quo maintains, which is usually in the interest of one of the sides. Ah, but at some point the inevitable happens, and the balance reverses. That is the moment when Wall Street shits its collective pants some five years back. Only it turned out that cronyism and complete incompetence had stability much higher than any sane person would have guessed.

But that’s notable in itself, because despite Wall Street being left basically to run amok, they still took that attitude of the persecuted, still believed the POTUS constituted a threat to them and heavily favored his opponent last year.

In any case, I plant my flag firmly in the camp against gluing our hands to our faces.