“You know what I like about Warren? Warren doesn’t want my money, actually,” said one mid-level hedge fund executive who has already maxed out on his donation to the Massachusetts Democrat in the 2020 presidential primary. “My firm is great, but some people in the industry are scumbags.”
Warren is a longtime critic of the financial industry and she has made her fair share of enemies among some of its major players. There has been a litany of stories in recent months — including one I wrote — quoting finance executives and bankers on how disastrous they believe a Warren presidency would be. Deciding between Donald Trump and Warren is a “decision between sickness and death.” Major Wall Street Democratic donors will sit the election out. Warren is the one candidate who is “toxic for the business community.”
But not everyone on Wall Street hates her. In fact, there are plenty of people who believe the idea of Warren in the White House sounds pretty good. And it’s not a grudging acceptance of her worldview but instead genuine support for it.
Some in the industry believe that the excesses of the financial system continue to be a problem in the wake of the Great Recession and that corporate concentration, wealth inequality, and lax regulation are still issues that need addressing. Do they think she’s 100 percent right on everything? No. But they know she’s smart and they think she’s approaching policy with a scalpel, not a sledgehammer. They believe Warren when she says she is a capitalist and are on board with her brand of capitalism.
“A place like mine chooses winners economically,” said one Goldman Sachs vice president. “Is that right? It doesn’t seem like that is right.”
I spoke with more than three dozen people from across the financial sector — professionals who work at hedge funds, big banks, and private equity funds, in asset management, financial advice, investment banking, trading, research, and compliance — who support Warren’s presidential bid. They know if she lands in the White House that may make their jobs a bit different, their companies a little less lucrative, or mean they’ll pay more in taxes. And they think that’s great. They support Warren because of her policies, not in spite of them.
“Even though, on a personal basis, Elizabeth Warren may be bad for me economically, she would be better for society, which I want my kids to grow up in,” one director at Citi told me.
Elizabeth Warren’s “plan for that” appeals to a lot of people on Wall Street
Warren’s plans have become a signature of her presidential campaign. She’s got a lot of them, including multiple that would have a significant impact on the financial industry, major corporations, and the wealthy.
She has laid out proposals to overhaul private equity, restructure American capitalism, jail corporate executives, implement a lobbying tax, and get big money and donors out of politics, among others. She says that her first priority, if elected, will be a sweeping anti-corruption package that would seek to reduce corporate influence and the sway of special interests in Washington, DC.
“Corruption has put our planet at risk. Corruption has broken our economy. And corruption is breaking our democracy,” Warren said at a September rally in New York City. “I know what’s broke, I’ve got a plan to fix it, and that’s why I’m running for president of the United States.”
Many of the people I talked to said that the big structural change Warren talks about and her plans — even the ones that might not be best for their pocketbooks — are what draw them to her. They believe that parts of their industry, or other parts of the political system as a whole, need changing.
“I might not always agree with every move that she makes, but it would be hard to argue that she hasn’t done her homework on it,” said Charlie O’Donnell, a venture capitalist at Brooklyn Bridge Ventures.
That’s also why some Wall Streeters are so concerned about her. They know how the system works and they know she knows, too. When billionaire Leon Cooperman goes on CNBC and predicts a Warren presidency would cause the stock market to fall by 25 percent, he’s not just thinking of his stock portfolio — he’s also thinking of his bank account and what Warren’s wealth tax would mean for that, or how aggressive Warren-installed financial regulators would be.
While a lot of Warren’s Wall Street supporters felt their particular firms or areas are doing things right, they think a lot of others in corporate America are doing things wrong. The hedge funders wondered about the big banks; the private equity people complained about monopolies and the bank bailouts. An investment adviser said he was doing right by his clients but his competitors were engaging in behavior he considers “borderline criminal.” The Dodd-Frank Act had already cleaned up the big banks but what about big tech?
“I’m not so worried that we’re going to blow up the financial system,” said one junior executive at a large quant hedge fund. “I’m worried that banks aren’t very good at deciding who is and who isn’t going to blow up the financial system. So if she wants to regulate them more, I’m not going to complain.”
O’Donnell invoked the debacle surrounding WeWork, the coworking startup that was forced to cancel its IPO and saw its CEO and founder step down, but not before cashing out $700 million from the company and reportedly walking away with nearly $2 billion more. “That’s not capitalism, that’s just theft,” O’Donnell said. “And I’m not for theft. If that’s the kind of reform that Warren puts in, that’s great, that’s awesome, that’s better for everybody.”
There was also a sense among those I talked to that if you can’t make money under Elizabeth Warren’s rules, maybe you’re not very good at the game in the first place. Wall Street has an ego and there’s an attitude that they don’t need the government’s help to make money.
“To the extent that a business was regulated out of existence, isn’t that the ultimate form of capitalism?” said one New York investment banker. “If your business can’t succeed, it should die.”
“The truth of the matter is, I don’t need the government’s help to make money doing what I’m doing,” said one private equity executive.
Warren’s Wall Street supporters trust her
Warren has made a point to emphasize that she’s a capitalist and that she doesn’t want to destroy markets altogether, she just thinks they need rules. And her supporters in the industry agree with her.
“I can convince myself that it is a service we provide — we are effectively taking on risk where other people don’t want to,” said one associate director in the high-frequency trading division of an options firm. “But it’s a long way to convince myself that it’s a net gain for the world.”
“Customers need protection. Corporations have so much at their disposal and an individual customer has nothing,” said one portfolio manager in the credit card division of a major bank.
One managing director at JPMorgan Chase acknowledged that the commercial banking sector had been “beaten and pounded” by the Consumer Financial Protection Bureau, which Warren first conceived of as a Harvard professor and helped launch during President Barack Obama’s administration, and it wasn’t the end of the world. “I don’t want to say we got used to it, but we adapted,” he said. “We survived, and we’re now more profitable than ever.”
Warren’s Wall Street backers don’t buy into the notion that she will tank the stock market or do catastrophic damage to the economy. Instead, they think long term, her formula works, and the Trump-induced whiplash is more detrimental.
“If there’s any kind of correction associated with a Warren presidency, I think it would actually be short-lived,” said one Fidelity portfolio manager. “So much of Wall Street is Republicans, and if it is conventional wisdom that it’s going to be a shit show, then that does become self-fulfilling for a period of time. But ultimately, what will matter is the economic data and company results.”
They also think she would be good for the economy and trust her in the event of a potential recession. They see her as an experienced economic hand who would seek to spend more money at the lower ends of the economic spectrum rather than at the top, and they figure the deficit is going to continue to balloon whoever the next president is, Republican or Democrat. “At the macro level, the redistribution of wealth back into consumer’s pockets will positively impact equity markets,” said one State Street vice president. “It’s just what side of the ledger you want to look at.”
While in the wake of the financial crisis, Warren trained much of her ire on the big banks; on the campaign trail, she’s specifically gone after private equity. She’s characterized the industry’s practices as “Wall Street looting,” invoking private equity’s role in the demise of companies such as Toys R Us, Payless, and Shopko, and proposed revamping the way firms do business and closing the carried interest tax loophole many in the field take advantage of. Finance professionals not in the private equity industry said they had it coming, and her supporters within the industry acknowledged that while the attention was a bit of a nuisance, on a lot of fronts she’s probably right.
The day I spoke to one private equity associate, he told me he had just been at an industry conference where the speaker had dedicated part of his presentation to Warren. “They framed it as private equity has a public relations problem and we as an industry should try to show that we are not as bad as we are sometimes portrayed to be,” he said.
“At the end of the day, it’s hard to justify why these things exist and everybody knows it, they just don’t want to pay it,” one private equity executive said of the carried interest tax loophole.
In a statement to Vox, Warren spokeswoman Saloni Sharma highlighted Warren’s record on going after the financial industry, including her calls to break up the banks, her work setting up the CFPB, and her public criticism of Wells Fargo and its executives. “She is not cozying up to Wall Street at fundraisers,” Sharma said. “She’s been the leader in holding Wall Street accountable and getting results for decades. They know she will do the same as president.”
Not everyone in finance is rolling in money
Miles’s law says that where you stand depends on where you sit, and not everybody is sitting in the same place in the world of Wall Street. The prospect of an Elizabeth Warren presidency means something very different to the Lloyd Blankfeins and Jamie Dimons of the world from what it means to your average Goldman Sachs or JPMorgan employee.
“It’s a pyramid, and the people at the top are very wealthy and everybody else is trying to rise to the top,” said one hedge fund portfolio manager.
One compliance officer at a major investment bank recalled a pep talk her boss used to give at meetings at her previous firm. “His metaphor was how much juice can you squeeze from a lemon? Because if you squeeze it a little bit more, you can always get more out of it. I really do feel like a lemon,” she said.
In her current position, she went for seven years without getting a raise. “It’s very hard to take when you know that the company just initiated a $100 million stock buyback and we have one of the highest-paid CEOs on Wall Street,” she said.
And it’s not just problems with how their companies sometimes treat them, it’s also with how they treat consumers.
A mortgage specialist who works for a Wall Street bank — Wells Fargo — not on Wall Street but in Iowa told me about his dealings with an elderly couple who had a home they couldn’t afford. They were unable to pay for the repairs required in order to turn it over to the government and Wells Fargo was unwilling to foot the bill for the repairs itself. The house will probably be foreclosed on and the couple has moved into an assisted living facility. “We are making billions upon billions of dollars a year, and for us to quibble over thousands of dollars on a property is tough for me to swallow,” the employee said.
He caucused for Marco Rubio in 2016. He plans to caucus for Warren this time around.
One of the most headline-grabbing proposals of Warren’s presidential campaign thus far has been the wealth tax. She wants to levy a 2 percent tax on fortunes of over $50 million and a 3 percent tax on fortunes of over $1 billion. One Deutsche Bank economist laughed off the idea that this would affect broad swathes of Wall Street. There are a lot of people who might envision themselves as the real-life Gordon Gekko, but very few actually get there. “There’s something very aspirational about pretending that you’re going to be impacted by the wealth tax,” he said.
But even if they did hit the $50 million net worth mark, the Warren supporters I talked with said they would be fine. “If the prospect of losing 2 percent of your wealth would get you to let Trump win, did you ever have any principles at all?” said one researcher at a major hedge fund.
One trader was more cutting in his assessment: “I’m fully on board with soaking the rich, 100 percent, and if that involves me paying more taxes, let’s go.”
Warren has a lot of supporters on Wall Street but they’re still not shouting it from the rooftops
Many of the people I spoke with for this story were leery about announcing their political leanings, and it makes sense. Corporations don’t want to risk alienating customers and clients of any political stripe, and typical workplace politeness can keep politics talk to a minimum. Some people knew many others at their workplaces who agreed with them on Warren but they also knew people who disagreed.
At many financial companies, employees face strict rules around campaign contributions and have to get them cleared by compliance, if they’re allowed at all. Brent Jerolimic, now a consultant at a fintech company, waited until leaving his job at UBS before donating to Warren’s campaign. “I didn’t necessarily need that on my record, that I donated to Liz Warren,” he said.
Warren may not be the most popular candidate on Wall Street but she’s not the least popular one, either; it’s not as though the financial industry is immune to her rise in the polls. And her supporters acknowledge that while not everyone in their field will agree with them, they want them to give her a chance. They believe that if people sit down and actually look at her policies, they will see she’s not going to turn the United States into Venezuela. The big structural change she’s talking about, they think is a good thing. And honestly, presidents don’t get everything — or often most things — on their agendas done. They’re not scared, and they don’t think others in their position should be scared.
A director at Bank of America Merrill Lynch said he’d seen all the stories about Wall Street loathing Warren and reached out to show that it’s not everyone. “There are some of us who think that fairness is important and not just maximizing how much money I have,” he said.
And if their colleagues or those higher up on the totem pole aren’t on board with Warren, well, that’s just too bad.
“My old bosses were good guys,” said Tamar Katz, a former analyst at Citi. “I see that they don’t get Elizabeth Warren, and they’re wrong.”
Just because Warren’s backers don’t announce their political preferences doesn’t mean they aren’t listening. A private equity associate told me he had heard the CEO of a major private equity firm refer to Warren as “Pocahontas” at a reception during a 2018 conference. A research analyst told me that this spring he had been present in a meeting where an investment relations director from a major defense contractor joked about getting Warren and Rep. Alexandria Ocasio-Cortez (D-NY) onto a Bombardier jet, the laugh being because it would crash and they would die.
“I have yet to be at a dinner or a luncheon or a meeting where she does not come up among these wealthy fund managers or CEOs,” he told me. “Publicly, they may dismiss her as a socialist with no chance. Privately, I think it’s keeping them up at night.”