The financial industry looms large in the coming primary and some bankers say theyll push for the Vermont senator even if his policies could hurt their careers
A few months ago, Democratic party leaders attended a meeting in New York with some of the titans of Wall Street, among them heads of brand-name hedge funds and top private equity firms. The gathering was billed not as the usual high-dollar fundraiser but as a bridge-building exercise in which powerful financiers could vent their opinions privately to Democratic bosses.
Two US senators who formed part of the Democratic delegation kicked off the meeting by inviting the financiers to air their concerns about party policy. One of the big name Wall Street figures stood up, proclaimed grandly that he was speaking on behalf of every financial person in the room, and then slammed into the Democratic lawmakers for having had the audacity even to consider disbanding a low-tax arrangement popular with hedge fund managers known as carried interest.
That was startling to me, said one of the other financiers present in the room that day. Here was a gathering of Wall Streets greatest minds and what were we discussing? Not how to generate more jobs or create an economy that works for everyone, but how to protect our vested interests and tax advantages.
Lets call the financier speaking here by the false name Frank. He is one of a rare and fascinating breed which Politico has dubbed Bankers for Bernie high-profile Wall Street figures who, unlike most of their peers, are prepared to abandon pure self-interest and embrace the radical financial reforms espoused by Bernie Sanders.
Even Asher Edelman, one of the real-life templates for Gordon greed is good Gekko of the 1987 movie Wall Street, has joined the club, writing in the Guardian that only Sanders is committed to honest solutions to the crisis of income inequality.
The fact that Frank a prominent New York hedge fund manager is only willing to talk to the Guardian anonymously itself tells a story. Its not that hes ashamed about his backing for Bernie quite the contrary: he has openly canvassed for Sanders in Iowa and frequently goes out leafleting for him in New York City. Rather, Franks desire to keep his name out of the news was a reflection, he said, of the stultifying consensus within the New York financial world that Sanders proposals to rein in Wall Street and prevent another Great Recession are dangerous and must be rebuffed. He looks at his fellow hedge fund folk, and thinks to himself that they have made so much money, yet all they want to do is preserve what theyve got. Its got so out of whack that virtually nobody is willing to think about the basic unfairness of income inequality or how to improve the economy.
Since Sanders launched his run for the White House last May, the senator from Vermont has dragged finance reform from the margins of political debate to the center of the Democratic presidential stage. Now the issues that he cares most deeply about banks that are too big to fail, Wall Street financiers who are immune from prosecution, grotesque income inequality regularly dominate the televised debates that pitch him against Hillary Clinton, the latest of which will be held in Brooklyn Thursday night.
In the past week, the question of Wall Street reform has gained further prominence as the focus of the presidential contest has swung to the home turf of the worlds financial capital ahead of New Yorks own primary vote on 19 April.
Unusually for New York, the state, with its fat crop of 291 Democratic delegates out of the 2,382 needed to win, is being fiercely fought over, and that in turn has pushed the question of what to do with those pesky financiers and their high-risk gambles even further up the political agenda.
It would be hard to overstate the importance of Wall Street within the New York primary. More than half of the active Democratic voters likely to participate in the ballot live in New York City, and within the boundaries of the five boroughs the financial services industry accounts for almost one in 10 private sector jobs and nearly a third of the payroll equivalent to a total of one million of New York Citys private sector jobs.
That doesnt mean that all those jobs and all that money are going to those titans of Wall Street who were in the room with Frank. Much of the economic activity goes to relatively low-paid service workers who support the financial sector, such as healthcare, food and retail workers.
Financial services form a big voting bloc, but people who work at the lower end of the industry and in the support services may well be Bernie fans, said Paul Ryan, a fully signed-up member of that elite club, Bankers for Bernie. Ryan, a managing director at Tripoint Global Equities, an investment bank that works with small businesses, believes that the physical presence of Wall Street and the ostentatious wealth that flows from it through Manhattan provide ample evidence that Sanders radical policies are right.
New Yorkers are particularly well positioned to see how the rich are screwing over everybody else. You just have to look at real estate prices people will take a look at whats happening across the city and a certain number will be disgusted by it: Bernie speaks to them, he said.
Ryan said his work with smaller companies, who continue to find it much harder to obtain finance than big corporations in the wake of the 2008 crash, has set him apart from most of his peers and made him more amenable to Sanders call for a Wall Street shake up. These past few years havent been good for my clients as nobody is talking about meaningful policies to reinvigorate small business and manufacturing, he said.
Ryan admits there is an element of self-interest in his support for Sanders in that his investment firm depends on the financial health of its clients who are hurting. But he also insists that his unusual position as a financier who wants to see major change on Wall Street comes from something more fundamental in him: Conscience. I have a conscience. We have gone so far down the road of Reagan economics weve ended up in downright cruelty. Thats why Bernie must win.
In the case of Wade Black, COO at the boutique investment banking firm Scarsdale Equities, it was the experience of watching the financial world suffer serial convulsions that turned him into a Banker for Bernie.
Im 42. In my relatively short career on Wall Street, Ive watched us lurch from crisis to crisis from the Mexican peso crisis of 1994, the dot-com bubble, post-9/11 without exactly learning our lesson.
After all that, Black came to the conclusion that capitalism works better if we dont have a class of banks who take all the reward and none of the risk. And like Ryan, he thinks the fallout of that disparity is written all over New York city.
Just look at the city and you see the problem writ large. Income inequality in New York is huge you just have to walk around Queens and Brooklyn to see whats going on. Its unsustainable.
Asked to describe how he came to feel the Bern, Black said that his anxieties about the industry in which he has worked all his life grew out of his questioning of American politics. I developed a dissatisfaction with establishment politics, he said, adding that in 2012 he voted for neither Barack Obama nor his Republican challenger Mitt Romney.
Then in 2014, Michael Lewis book Flash Boys: A Wall Street Revolt helped to pull the scales from off my eyes. It showed me that the regulatory structure was rigged and I could no longer ignore that.
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