Politico reports that Wall Street is freaking out over the idea of a populist contender for the Democratic Party presidential nomination in 2016.
With the consummate insider Hillary Clinton—a former First Lady, US Senator and Secretary of State—once again seen in establishment circles as the "inevitable" choice to lead the party, The Hill says the left of the Democratic base wants a strong primary challenger in order to highlight Clinton's corporate-friendly, Wall Street-appeasing, and military hawkish instincts.
Though critics are sure to note the possible premature nature of the debate—it's still 2013, by the way—the uptick in the conversation this week was spawned by a feature-length article in the New Republic on Monday, titled Hillary's Nightmare? A Democratic Party That Realizes Its Soul Lies With Elizabeth Warren, in which journalist Noah Scheiber paints of a scenario in which the freshman senator from Massachusetts, championed for her tough positions on Wall Street and well-received populist message, rises to challenge the party's pro-corporate standard-bearer.
In many ways, the dynamics Scheiber describes are less about about a Clinton vs. Warren showdown, but the fundamental split in the Democratic Party that only the intransigence and obstructionism of the Republican Party has kept at bay. In essences, writes Scheiber, there are two sides of the party (emphasis added):
On one side is a majority of Democratic voters, who are angrier, more disaffected, and altogether more populist than they’ve been in years. They are more attuned to income inequality than before the Obama presidency and more supportive of Social Security and Medicare. They’ve grown fonder of regulation and more skeptical of big business. A recent Pew poll showed that voters under 30—who skew overwhelmingly Democratic—view socialism more favorably than capitalism. Above all, Democrats are increasingly hostile to Wall Street and believe the government should rein it in.
On the other side is a group of Democratic elites associated with the Clinton era who, though they may have moved somewhat leftward in response to the recession—happily supporting economic stimulus and generous unemployment benefits—still fundamentally believe the economy functions best with a large, powerful, highly complex financial sector. Many members of this group have either made or raised enormous amounts of cash on Wall Street. They were deeply influential in limiting the reach of Dodd-Frank, the financial reform measure Obama signed in July of 2010.
Picking up on the story, The Hill reached out to several prominent progressive DC groups to gauge their thoughts on a primary challenge from Clinton's left, and found that most worried about her inability to genuinely inhabit the anti-Wall Street, populist mood that has become a central tenet in an era of massive income and economic inequality. Not only did the groups cite economic disparity as one of the biggest problems facing the nation, it is also a galvanizing political issue for the left. From The Hill:
Clinton raised concern among the Democratic Party’s populist base when she recently accepted an estimated $400,000 from Goldman Sachs for two speeches.
Influential progressives wonder whether someone who accepted such a large sum from one of Wall Street’s biggest investment firms could be expected to hold corporate executives accountable if elected president.
They also wonder how aggressively she’d call for addressing income inequality, which many see as one of the biggest economic problems facing the nation.
“If Hillary has no opposition, if she has a coronation instead, that debate doesn’t happen,” said Roger Hickey, co-director of Campaign for America’s Future.
Charles Chamberlain, executive director of Democracy for America, a liberal grassroots advocacy group, said the Democratic Party would benefit from a competitive presidential primary in 2016.
“The issue of income inequality is vital, and Hillary Clinton has not always had the right position,” he said. “Hillary has changed a lot, and she’s grown a lot. I think this is a candidate who has evolved in a number of important ways.
“She has some heavy lifting to do to show she’s not in the pocket of banks and a candidate of the 1 percent. That’s a more open question,” he added.
Phrasing it in a question, consumer advocate and former presidential candidate Ralph Nader put it this way in his weekend column at Common Dreams: "Does the future of our country benefit from Hillary, another Clinton, another politician almost indistinguishable from Barack Obama’s militaristic, corporatist policies garnished by big money donors from Wall Street and other plutocratic canyons?"
The answer from Nader is an emphatic 'No.' He writes:
A Clinton Coronation two years or more before the 2016 elections will stifle any broader choice of competitive primary candidates and more important a more progressive agenda supported by a majority of the American people.
Full Medicare for all, cracking down on corporate abuses, a fairer tax system, a broad public works program, a living wage, access to justice and citizen empowerment, clean election practices, and pulling back on the expensive, boomeranging Empire to come home to America’s necessities and legitimate hopes are some examples of what the people want.
At Politico meanwhile, the focus on Tuesday was on the possibility of Clinton's challenge coming from Sen. Warren and how Wall Street was simmering with consternation over the prospect. As Ben White and Maggie Haberman report:
And the fear is not only that Warren, who channels an increasingly popular strain of Occupy Wall Street-style anti-corporatism, might win. That is viewed by many political analysts as a slim possibility. It is also that a Warren candidacy, and even the threat of one, would push Clinton to the left in the primaries and revive arguments about breaking up the nation’s largest banks, raising taxes on the wealthy and otherwise stoking populist anger that is likely to also play a big role in the Republican primaries.
“The nightmare scenario for banks is to hear these arguments from a candidate on the far left and on the far right,” said Jaret Seiberg, a financial services industry analyst at Guggenheim Partners. “Suddenly you have Elizabeth Warren screaming about ‘too big to fail’ on one side and Rand Paul screaming about it on the other side and then candidates in the middle are forced to weigh in.”
A spokesperson for Warren declined to comment on whether she would consider a presidential bid against Clinton, though Warren has previously said she has no plans to run. People close to Warren note that she signed a letter from female Democratic senators urging Clinton to run in 2016. And Warren associates, mindful of any appearance of creating the narrative of a Warren-for-president campaign, have corresponded with Clinton associates to stress that they didn’t fuel the New Republic story by Noam Scheiber.
Yet the stakes for Wall Street and corporate America of a Warren campaign — and possible victory — are hard to overstate.