As Hillary Clinton’s presidential campaign gets underway, the Democratic frontrunner is already challenging assumptions about being too cozy with Wall Street. A few weeks ago, for example, she vowed to “take a hard look at what is now being done in the trading world, which is just trading for the sake of trading.”
She also wants to take a fresh look at the capital gains tax rate; she’s condemned growing economic inequality; and she hired a fierce Wall Street critic as her campaign’s CFO.
Not surprisingly, the financial industry isn’t pleased. But as Politico noted yesterday, Wall Street isn’t just complaining; it’s pointing across the pond to warn Clinton and her party about the dangers of economic populism.
Wall Street has a message for bank-bashing U.S. populist politicians: Put down the pitchforks or you could end up like Ed Miliband.Senior financial executives say the Labour leader’s anti-bank, soak the rich rhetoric helped sink his party in the United Kingdom elections and assure a surprisingly big reelection win for Prime Minister David Cameron and his Conservative Party last week. These bankers and their ideological supporters say if likely Democratic presidential nominee Hillary Clinton keeps tacking to the left on Wall Street issues … she could face the same fate.
Well, I suppose she could. The question is whether or not that’s likely.
One top executive at one of Wall Street’s largest firms told Politico, “Cameron embraced the role of the financial sector in growing the U.K. economy and creating jobs, never once criticizing hedge funds, banks or the wealthy. Miliband ran against hedge funds and bankers, promising bonus and mansion taxes and lost big. Is that a lesson for Hillary as well?”
Actually, no, it probably isn’t. In fact, the whole idea seems quite foolish.
The parallels between the U.S. and U.K. electoral models are few and far between. British voters have a multi-party election and an expedited, five-week campaign cycle in a parliamentary system. American voters have a two-party system, a two-year campaign cycle, and an electoral model in which the people elect the chief executive and head of state (albeit filtered through the electoral college).
If conservatives want to argue that Hillary Clinton should be cautious about relying too heavily on support from Scotland, that would be sound advice. But if the right thinks Clinton should go easy on the financial industry to avoid Miliband’s fate, this is very hard to take seriously.
The reality is, Wall Street is not popular in the United States. People still remember the industry’s role in destroying the global economy in 2008 and folks haven’t lost sight of the whole bailout initiative.
The appetite among American voters for a national candidate who promises to go easy on Wall Street is effectively non-existent.
Miliband’s defeat is certainly worthy of scrutiny, but if President Obama won 332 electoral votes in his re-election bid after imposing new rules on the financial industry, and while sharing some unkind words about Wall Street, perhaps Clinton need not fear a public backlash against economic populism?