That collective sigh of relief you heard last week was from Wall Street, now that a divided government is likely for the foreseeable future.
Many of the nation’s corporate chieftains talk a good game in their seemingly endless public embrace of wokeism. But when it comes to the bottom line, they fear the type of progressive politics that a Democratic sweep would have presented.
With the GOP apparently in control of the Senate for at least two years (if they can win one of two runoff races in Georgia after picking up seats in the House), far lefties like Massachusetts Sen. Elizabeth Warren aren’t likely to be running the Treasury Department in a Biden administration. The progressive policy ambitions of the left wing in the Democratic Party have been dashed for a while, and hopefully for good.
I must concede that it would have been fun to watch corporate virtue signalers like BlackRock’s Larry Fink and Goldman Sachs’ David Solomon squirm as Warren had her way either as Treasury secretary or as a force in the Senate majority.
Ditto for the Big Tech exes who quell free speech that runs counter to their PC culture. They would likely have seen their empires broken up if the Dems had a clean slate because people like Warren and AOC see any successful business as inherently evil.
But Tuesday’s muddled result, with the Senate possibly staying GOP (pending the runoffs) and Joe Biden the presumed president-elect, Corporate America is a big winner. Most important, so are small investors and the American taxpayer.
Don’t take my word for it. Look at the post-Election Day surge in stocks, the immediate dip in bond yields, and some of the commentary coming out of the big investment houses.
The stock gains are showing a belief that Biden’s tax plan, including higher capital-gains taxes on investment profits, won’t be passed by a GOP Senate. Gains of tech giants are leading the way because as much as the GOP rightfully despises Big Tech’s lefty bias, there isn’t the stomach among Republicans to upend successful American corporations by chopping them up.
Democrats often forget that the stock market is one of the most democratized parts of society. School teachers and cops through pension plans are in the market, as are Wall Street traders. This is why Biden’s plan to tax their retirement savings made little sense and thankfully may not now see the light of day.
In terms of the Main Street economy, Biden touted that his tax-increase plan would be aimed at fat cats whose incomes top $400,000. But small businesses file as individuals. Biden will have to explain to a Senate, if it’s still led by Mitch McConnell, why this engine of economic growth hammered by the pandemic should be hammered twice to pay for his Green New Deal fantasy.
Good luck with that.
Maybe the most optimistic analysis I heard came from Fink, who runs the world’s largest asset manager and is one of Wall Street’s top Dems. He told his employees Wednesday after Election Day that even with the late counting of votes, “our political process is resilient,” a source tells me.
He also said the election and the split decision in governance will be good for his investing business “because markets obviously like divided government.” Clients, he said, will be demanding stocks and other ways to capture value presumably because the lefties can’t break up banks and Big Tech.
A few caveats: The nation still faces an economic foe in COVID, and Dems could somehow win both Senate runoffs in Georgia. Even without Congress, there’s lots Biden can do to ramp up regulations on businesses, small and large, in the years ahead.
All that said, Corporate America and Main Street America look as if they may have dodged a bullet.
They ‘Met,’ they toasted
Former Mets co-owner Jeff Wilpon and the team’s new owner, hedge-fund titan Steve Cohen, had a testy relationship in the monthslong buildup to the team’s $2.4 billion sale. But they appear to have patched things up.
Sources tell me Wilpon and a group of Mets execs were dining on Thursday at Polpo restaurant in Greenwich, Conn., while Cohen was seated nearby celebrating his new acquisition.
Despite reports that Jeff was an impediment to Cohen’s deal and favored a bid from former Yankee Alex Rodriguez, Cohen politely walked over to the table and exchanged kind words with Wilpon. Jeff, sources say, then bought a bottle of wine that the two shared. Of course, looks can be deceiving. One source said sports agent Brodie Van Wagenen was among those at Wilpon’s table.