Who’s Afraid of Elizabeth Warren?

Quite a few people, and they have something in common. It’s not poverty.

President Trump has been good for America’s billionaires. He slashed corporate taxes, cut the top income tax rate and raised the total exemption for the estate tax, directly benefiting several hundred billionaires and their heirs. He’s placed wealthy supporters in key positions of government like the Commerce Department, rolled back Obama-era financial regulations and privileged the interests of favored industries — like resource extraction and fossil fuel production — above all else.

There are billionaires who oppose Trump, of course. But for the most part they aren’t class traitors. They still want the government to work in their favor. They still want to keep their taxes low, just without the dysfunction — and gratuitous cruelty — of the current administration. And they want Democrats to choose a conventional nominee: a moderate standard-bearer who doesn’t want to make fundamental changes to the economy, from greatly increased taxes to greater worker control.

Plenty of Democratic voters agree. But just as many have rallied behind candidates who want a more equal, more democratic economy. Two of the three leading candidates — Bernie Sanders and Elizabeth Warren — want new taxes on the wealthiest Americans and their assets. Sanders has the steeper tax but Warren is not far behind former vice president Joe Biden in national polling and leads the field in both Iowa and New Hampshire. With Biden struggling to break away from the pack, it looks like Warren actually could be the nominee, and anti-Trump billionaires are worried.

That’s why one of them, Mike Bloomberg, has floated a plan to run for the Democratic nomination. And why others have gone public with their attacks on Warren.
Mark Cuban, a billionaire investor, said Warren — whose wealth tax calls for a 2 percent tax on households with more than $50 million in assets and a 6 percent tax on households with assets of more than $1 billion — is “selling shiny objects to divert attention from reality.”

Another billionaire investor, Leon Cooperman, called Warren’s wealth tax a “bankrupt concept,” said it could “lead to inappropriate actions in the economy that are counterproductive” and warned that Warren is “taking the country down a very wrong path.”

“What she’s peddling is bull. Total, complete bull,” Cooperman said last week on CNBC, “That comes from someone who believes in a progressive income tax structure, who believes the rich should pay more.”

A few days later, Cooperman announced his support for Bloomberg’s potential candidacy.

Bill Gates also thinks Elizabeth Warren’s wealth tax goes too far: “I’ve paid over $10 billion in taxes. I’ve paid more than anyone in taxes. If I had to have paid $20 billion, it’s fine. But when you say I should pay $100 billion, then I’m starting to do a little math about what I have left over.” He claimed that he was “just kidding,” but when asked if he would support Warren over Trump, he demurred. Instead, he said, he’d cast a ballot for whichever candidate had the “more professional approach.”

If there’s a prominent billionaire who hasn’t taken a public stance on Warren, it’s Jeff Bezos, the chief executive of Amazon. But he did urge Bloomberg to run for president earlier this year, perhaps a sign that he too is worried about the outcome of the Democratic primary.

All of this is understandable. As my colleague Patty Cohen notes, if Warren’s wealth tax had been in effect since 1982, Gates would have had $13.9 billion in 2018 instead of $97 billion, Bezos would have $48.8 billion instead of $160 billion, and Bloomberg would have had $12.3 billion instead of $51.8 billion. They would still be billionaires, but Warren’s tax would have taken a significant chunk out of their assets. And even if the wealth tax never became law, a Warren administration would still take a hard line on financial regulation, consumer protection and tax enforcement, key areas of interest for the super rich. It’s impossible to imagine a Warren White House in which billionaires would have the same access and favored status that they do with Trump.

Warren’s wealthy critics are right to be nervous. And they have a right to speak out against her. But Bloomberg’s potential entry into the race — and Tom Steyer’s ongoing presence — shows that they’re not just giving an opinion. They want assurance that the Democratic nominee won’t be too disruptive. They want a restoration of the pre-Trump status quo, not a revolution. They want a veto of sorts, a formal way to say that Democrats can only go so far with their plans and policies.

The only response worth making to this idea is to laugh. Despite voter suppression, unlimited political spending and the president’s attempt to solicit foreign interference on his behalf, this is still a democracy. The final say still rests with voters, with ordinary Americans who retain the power to shape our government. And if those voters decide to nominate Warren or Sanders instead of a traditional moderate — and if either of those candidates beats Trump, as is very possible — then the billionaires will have to learn to live with the people’s will.

Rewrite of Bank Rules Advances Slowly, Frustrating Republicans

Many efforts to retool postcrisis financial rules remain unfinished; Republicans want faster action

.. Daniel Tarullo, the Fed’s regulatory point-person during the Obama administration, in May said postcrisis rules “could be endangered by a kind of low-intensity deregulation consisting of an accumulation of non-headline-grabbing changes and an opaque relaxation of supervisory rigor.”Under the law passed a year ago, regulators face a fall deadline to simplify rules for midsize and small banks. They also want to make progress by year’s end to retool rules that limit speculative trading by large firms and test the ability of firms such as J.P. Morgan Chase & Co. or Goldman Sachs Group Inc. to continue lending during a severe recession.

Overall, regulators say they are moving as fast as they can on more than 30 changes affecting the financial sector. The proposed changes, they say, would better calibrate postcrisis rules under the 2010 Dodd-Frank financial law without undermining the financial system.

“We’ve been working on a regulatory restructuring that is aggressive in its scope but responsible in its substance,” Federal Reserve Vice Chairman Randal Quarles said.

The pending changes include simplifying annual stress tests and eliminating a system of giving pass-or-fail grades to the big banks that take them, both industry victories. Another change would ease a rule that requires big banks to plan annually for their own demise, allowing the largest U.S. firms to produce full so-called living-will plans every four years rather than annually. Regulators also are changing a rule adopted to curb excessive borrowing at eight of the largest U.S. banks.

..  In some cases, regulators’ attempts at changing rules have been derailed by lukewarm support from Wall Street. The effort by Commodity Futures Trading Commission to overhaul postcrisis derivatives rules has stalled largely because major banks and trading firms have become accustomed to current rules and aren’t eager to change their business models.

Similarly, banks objected to a plank in the rewrite to the Volcker rule, the prohibition on lenders making risky “proprietary” bets. The pushback has led regulators to consider proposing a revised version, according to people familiar with the process.

Trump-appointed officials are also spending some of their time finishing rules mandated by the Dodd-Frank law that weren’t completed during the Obama administration. That means advancing restrictions in a more industry-friendly way than if Democratic appointees still held the rule-writing pen.

The Securities and Exchange Commission last week finished work on a rule raising standards for investment advice by stockbrokers. A federal court had voided a tougher version by the Obama administration that applied to retirement-savings advice. Trump appointees at the Consumer Financial Protection Bureau also rewrote an Obama-era rule for payday loans, removing a requirement that would have made it difficult for companies to offer high-cost consumer loans.

Who’s Afraid of Nancy Pelosi?

What has Pelosi achieved?

First, as House minority leader, she played a crucial role in turning back George W. Bush’s attempt to privatize Social Security.

.. Then she was the key figure, arguably even more crucial than President Barack Obama, in passing the Affordable Care Act, which produced a spectacular fall in the number of uninsured Americans and has proved surprisingly robust even in the face of Trumpian sabotage.

She helped enact financial reform, which has turned out to be more vulnerable to being undermined, but still helped stabilize the economy and protected many Americans from fraud.

Pelosi also helped pass the Obama stimulus plan, which economists overwhelmingly agree mitigated job losses from the financial crisis, as well as playing a role in laying the foundation for a green energy revolution.

.. whenever you hear Republicans claim that Pelosi is some kind of wild-eyed leftist, ask yourself, what’s so radical about protecting retirement income, expanding health care and reining in runaway bankers?

It’s probably also worth noting that Pelosi has been untouched by allegations of personal scandal, which is amazing given the right’s ability to manufacture such allegations out of thin air.

We’ll Never Know How Bad the Federal Reserve Is

The central bank hides and then destroys documents.

Sen. Rand Paul (R., Ky.) still hasn’t persuaded his colleagues to audit the Federal Reserve’s conduct of monetary policy. Perhaps lawmakers could simply agree that the Fed should stop destroying documents.

Borrowed Time,” a history of Citigroup publishing today and co-authored by your humble correspondent and Vern McKinley, finds that the bank was in many ways healthier and more stable during the century when it was independent than during the roughly 100 years it has been supported by the federal government. But the government has been working hard to prevent such stories from being told.
..  the Office of the Comptroller of the Currency’s examination reports from 1991 and 1992. Bank examiners normally put particularly juicy details about what they find in a confidential section that is not shared with the bank, and today this might represent a gold mine for financial historians. Such reports are available going back all the way to the 1860s, and the record lasts into the 1930s. But oddly these examination reports cannot be accessed for later periods due to the Federal Records Act of 1950.
.. For decades now, the government’s standard practice has been to warehouse individual examination reports for banks like Citi for 30 years while refusing to release them, citing exemptions under the Freedom of Information Act. After 30 years, the feds then destroy the reports. Based on this schedule, at some point during this year, the federal government will destroy the Citibank examination records from 1988. A few years down the line, the records from the early 1990s downturn will also cease to exist. Counter-intuitively, it is much easier for someone researching the history of a big bank to get their hands on an examination report from 1890 than from 1990. It is also certainly easier to repeat history if the lessons of the past are erased.

.. When an institution like Citi has problems as it did during the early 1990s, a regulator would normally catalog all the bank’s weaknesses in a written agreement in which the bank promises to sin no more. Citibank was placed under just such a memorandum of understanding. But you can’t read it.

.. It will not be immediately clear to most taxpayers why such information needs to be kept confidential for more than 25 years.
.. How will Americans ever fix problems in a federal bureaucracy if we’re never allowed to see them?

Wells Fargo’s Corset

What do you think of this punishment? Is this really harsh? Is this less harsh than a fine? What do you think of this?

LEVINE: This is a pretty salient punishment, right? It gets people’s attention – one because it is kind of novel. But also, you know, banks, their business is to grow, right? Like, bigness is a virtue for the big banks, right? Handicapping your ability to grow into new areas gets the continuing attention of bank directors and executives more than a fine would, right? Like you write a check, then you have less money. And you kind of go figure out how to make more money. Whereas here every day, as you try to figure out how to make more money, you are constrained by this enforcement action. So it just requires them to pay more attention than a fine would – even a pretty large fine.

This one trick explains the pattern of conservative praise for Trump’s first year

Ramesh Ponnuru is one of the best conservative writers out there, and is no one’s toady. Last month he praised Trump’s productive first year on policy:

Conservatives of various types have thus seen progress on their agenda in 2017. Economic conservatives got tax cuts and some deregulation. Legal conservatives got judicial appointments and an executive branch more mindful of the limits of its policymaking authority. Social conservatives also benefited from the judicial appointments and welcomed Trump’s policy of blocking international family-planning funding from going to organizations that promote or perform abortions.

.. Interesting to see a lot of conservative culture warriors defend Trump’s first year on policy grounds (taxes, judges, dereg, etc) and conservative wonks criticize it on cultural/institutional grounds

.. But praise for tax cuts and deregulation does not really come from conservative policy wonks.

.. As Peter Suderman wrote at Reason when the bill was passed:

The Republican bill, and the GOP’s evidence-free assertions about its likely budgetary effects, have all but ensured a future in which politicians do not feel obligated to even engage in the pretense of fiscal responsibility. Republicans complained endlessly about the opaque process by which Obamacare was passed. But now they have escalated the gimmick wars, and there may be no going back.

 

.. While the president has succeeded in undoing some major environmental and financial industry rules, a Bloomberg News review of the administration’s list found almost a third of them actually were begun under earlier presidents. Others strain the definition of lessening the burden of regulation or were relatively inconsequential, the kind of actions government implements routinely.

They are really undercutting their own credibility by putting out numbers that are not, quite frankly, very believable,” said Cary Coglianese, a University of Pennsylvania law professor who is also director of the Penn Program on Regulation.

 

.. The vast majority of that $8.1 billion in [regulatory] savings came from the repeal of a single federal contracting rule. The dramatic sounding “22-to-1” [deregulation-to-regulation] statistic is an apples-and-oranges comparison, weighing all deregulatory actions against just a small subset of new rules. And much of the deregulation was done not by Trump himself, but with the help of Congress, which used an obscure law early in his term to repeal 14 late-term Obama regulations. …

So far, agencies haven’t found a ton of expensive rules to roll back.

.. The only aspect of foreign policy this president has excelled at has been the globalization of America’s cultural fissures. Which is another thing that likely pleases social conservatives but puts off actual foreign policy wonks.

.. What Trump has been great at is venting his spleen. When he does so on issues near and dear to social conservatives, they are understandably happy. And to some extent they should be: Trump has governed as the most conservative president in modern history. Beyond that base, however, no one is terribly impressed with the president’s first year in office.

.. Evangelical leader Tony Perkins: President Trump gets a “mulligan” on an alleged affair because it was 10 years ago and “evangelicals understand what a second chance means”

.. The level of cynicism here is startling. Some Christian leaders are surrendering the idea that character matters in public life in direct exchange for political benefits to Christians themselves. It is a political maneuver indistinguishable from those performed by business or union lobbyists every day. Only seedier. You scratch my back, I’ll wink at dehumanization and Stormy Daniels. The gag reflex is entirely gone.

From a purely political perspective, the Trump evangelicals are out of their depth.

.. Evangelical leader Tony Perkins: President Trump gets a “mulligan” on an alleged affair because it was 10 years ago and “evangelicals understand what a second chance means”

When I was an Evangelical, forgiveness required both repentance (a pledge to not do it again) and remorse, neither of which POTUS seems to have remotely expressed here. Without those two things, forgiveness is not theologically possible.

 

.. “evangelicals understand what a second chance means”

Um… By his own admission, this is at least his 3rd chance… He cheated on his first two wives with his second and third wives… Evangelicals apparently understand what endless chances are, unless you are not one of “them”…

 .. When white evangelicals wanted to pick a candidate who upheld their “Christian values” they had a choice among
17 Republican candidates, all with the EXACT SAME stance on all the issues – border security, Islamic terrorism, Supreme Court, abortion, etc.

John Kasich
Jeb Bush
Chris Christie
Jim Gilmore
George Pataki
Bobby Jindal
Scott Walker
Rick Perry
Mike Huckabee

Ted Cruz
Marco Rubio
Rick Santorum
Rand Paul
Lindsey Graham

Ben Carson
Carly Fiorina

 

.. I saw Mr. Graham last night on CNN basically state that Trump’s moral failing is excusable because the stock market is roaring. That is how far adrift white evangelicals are: “We’ll overlook spiritual decay if we obtain material wealth.” All of Mr. Graham’s veils have been removed.