Biden may cast himself as the
champion of working people, but he’s seeking support from the same financial
elite that he chides on the 2020 campaign trail.
“The country wasn't built by
Wall Street bankers, CEOs and hedge fund managers,” Joe Biden told
a crowd at a Monday campaign rally held in a Teamsters hall, his first
appearance as an official 2020 candidate.
This is likely a different
message than what Biden has been sending to hedge fund managers themselves,
whom he has spent the two years leading up to his announcement aggressively
courting. These titans of finance capital have also been among Biden’s early
supporters.
In fact, the first time Biden
publicly opened the door to a possible 2020 run, he was standing among figures
from the hedge fund industry. After months of
flat out denials, Biden first admitted he “may very well do it” at the
Skybridge Alternatives (SALT) Conference in May 2017, where he appeared as a
keynote speaker. SALT is an annual conference bringing together hedge funds in
Las Vegas organized and run by Anthony Scaramucci, the hedge fund operator who
briefly served as President Trump’s White House communications director in
2017. While Biden is not listed as
a speaker for this year’s SALT, his picture is still featured
prominently on the front page of its website.
Attendees at the 2017
conference included billionaire investor Sam Zell, The Carlyle Group co-founder
and Co-Executive Chairman David Rubenstein, hedge fund manager James Chanos,
Milwaukee Bucks co-owner and Avenue Capital Group co-founder Marc Lasry, as
well as a host of celebrities and political figures such as Karl Rove and Donna
Brazile. Much of the coverage of the event at the time focused on Biden’s
teased presidential run and his testy,
possibly misreported exchange with billionaire hedge fund manager Bill
Ackman. But Biden was well-received at the event, receiving a standing ovation
from the 2,000-strong crowd of Wall Street bigwigs.
Biden’s speech reportedly painted
an image of the kind of unified, cooperative American polity that tends to
animate his worldview, one where competing interests work together and the
country functions more as a singular team than one marked by class divisions.
The United States had a plethora of research universities and the “most nimble”
venture capitalists, he told the gathering. And while hoarding their wealth
wouldn’t enrich the economy, he said, investing in education and other public
goods would.
This wasn’t the only time
Biden spoke alongside such an ultra-wealthy crowd that year. At an event at the
University of Delaware in April 2017 to promote
his Biden Institute—which describes
itself as a “a research and policy center” aiming to “influence,
shape, and work to solve the most pressing domestic policy problems facing
America”—Biden convened a panel called “Win-Win: How the Long View Works for
Business and the Middle Class.” At the panel, Biden was joined by various
corporate executives and figures from the investment industry. He kicked things
off by expounding on
the virtues of a strong middle class, whose fate, he said, depended on “what
companies decide to do with their profits”: invest them in “research, training,
equipment” or plow them back into “shareholder payout.”
The eight-member
panel—consisting of Biden, various corporate executives and two university
associates—was critical of both corporate America, which they argued was driven
to short-term thinking by fear of poor quarterly performance, and of hedge fund
managers who pushed executives into such behavior.
Yet several of these panelists
were themselves members of the hedge fund world: Carsten Stendevad of
Bridgewater Associates, which recently topped the
list of the world’s biggest and most profitable hedge funds; Sarah Williamson,
a former partner and 21-year veteran of hedge fund manager Wellington
Management Co. who sat onits
Hedge Fund Oversight Committee; Charles Elson, a finance professor at the
university who just months before was nominated to
run a hedge fund; and Mark Wiseman, the Global Head of Active Equity at
BlackRock, the world’s largest asset manager with billions of dollars invested
in hedge funds, in which the firm is increasing investment.
The following year, Biden
looked partly to the hedge fund world to fill out his institute's Policy
Advisory Board, adding former hedge fund boss and major Obama bundler Eric
Mindich as well as a number of employees and veterans of firms such as
BlackRock, Morgan Stanley and JP Morgan Chase. The Advisory Board’s missioninvolved
drafting “a set of new policy ideas to make sure Americans are able to obtain
quality jobs that will grow the middle class and our economy.”
Mindich, for his part, has
also promised to
help Biden raise money for his current campaign.
Such events continued into
2018. Early that year, Biden reportedly attended a
fundraiser at the home of Laetitia
Garriott de Cayeux, a career-long hedge fund executive, and was the special
guest at a $10,000 per person dinner for House Democrats at the aforementioned
James Chanos’ home. Chanos, a billionaire who made his fortune by betting on
the fall in value of company stocks, has
said Biden would “make a great president” and “hits a chord with the
middle class,” pledging to
“support him any way I can.”
Meanwhile, Florida billionaire
Marsha Laufer, whose husband Henry served as an executive at the $57 billion
hedge fund Renaissance Technologies, had kind words for
Biden before he joined the race, saying he represents “stability of government,
truth and values in a traditional sense that people are longing for,” while
expressing fear about the Democrats’ leftward shift.
It appears Biden may be
returning to this well even after taking a rhetorical jab at “Wall Street
bankers, CEOs and hedge fund managers.” Some of those slated to attend an LA
fundraiser for Biden next month include:
Richard Blum, hedge fund manager, private equity investor and husband of
California Sen. Dianne Feinstein; James Costos, board member of PJT
Partners Inc.; and Martha Karsh, whose husband, Bruce, co-founded private
equity firm Oaktree Capital.
Biden’s closeness to the
industry is nothing new. A 2015
letter signed by nearly 50 Democratic Party donors and activists
urging Biden to run for president the following year featured longtime hedge
fund manager Jim Torrey as well as other finance executives. Biden’s 2008
presidential campaign was fined
$219,000 by the FEC partly because three members of the campaign took
a flight on a private jet owned by the Clinton Group, a New York-based hedge
fund. And Biden’s son Hunter was previously chairman of Paradigm, a
now-defunct fund
of hedge funds he ran alongside Biden’s brother, James.
Alongside this relationship to
hedge funds, Biden has been heavily courting labor union support for his
presidential run. He opened his campaign with an endorsement from the
International Association of Fire Fighters, has spoken in union halls and in
front of union audiences in the lead up to his run (including on
the day he announced), and recently said that “I
make no apologies—I am a union man.” This is despite union antipathy toward hedge funds, which have a history of depleting pension funds through poor performance and
exorbitant fees.
These events suggest the
contours of what Biden’s campaign and potential governing style may look like.
Biden will likely continue seeking the support of unions while playing up his
working-class, Scranton roots in public speeches, while quietly courting hedge
fund managers and other corporate and Wall Street executives for funding.
Meanwhile, unlike Bernie
Sanders, one of his chief rivals for the Democratic nomination who frames the
relationship between corporate America and working people as antagonistic,
these episodes suggest Biden sees this relationship as a fundamentally
cooperative one.
As Biden said at
the Brookings Institution in May 2018, “I’m not Bernie Sanders. I don’t think
500 billionaires are the reason why we’re in trouble.” He went on to say, “The
folks at the top are not bad guys… wealthy Americans are just as patriotic as
poor folks.”
In this view, Wall Street and
corporate executives serve as key stakeholders who must help shape government
policy, with Biden acting as a kind of broker between them and the rest of the
public. It’s an approach not dissimilar from that taken by previous Democratic
presidents in the post-Reagan era.
But can such a coalition of
the working class and ultra-rich executives hold together throughout the
campaign, particularly at a time of populist anger and historic wealth
inequality? With a dangerous billionaire real estate mogul in the White House,
that’s one risky proposition.
No comments:
Post a Comment