Julia Roberts was making the rounds at Blackstone, and no one at the giant private equity firm was particularly happy to see her.
In mid-July, a video featuring a clip of Ms. Roberts in the movie “Pretty Woman” ping-ponged through inboxes of Blackstone employees. The video, produced by Senator Elizabeth Warren’s office to promote a legislative campaign, showed a scene in a hotel suite where Richard Gere, playing a suave investor, admits to a young Ms. Roberts that his work was akin to stealing cars and then selling off the parts.
Ms. Warren’s tagline: “Stop Wall Street looting.”
The pitch went largely unnoticed publicly. But at Blackstone, a titan of Wall Street, the video was received with a mix of frustration and incredulity, people who work at the firm said.
They aren’t the only ones: From corporate boardrooms to breakfast meetings, investor conferences to charity galas, Ms. Warren’s rise in the Democratic primary polls is rattling bankers, investors and their affluent clients, who see in the Massachusetts senator a formidable opponent who could damage not only their industry but their way of life.
It’s a role that Ms. Warren unabashedly embraces, as an increasing number of voters, as well as a few veterans of the finance industry, see her as the policymaker who can address the growing wealth gap in the United States and take on the corruption and excess in the business world.
Ms. Warren has made battling corporate greed and corruption a central theme of her fiercely populist campaign, mixing anti-elitist oratory with policy plans calling for sweeping new regulations. On Friday morning she released an ambitious proposal to pay for her “Medicare for all” program, with provisions directly affecting Wall Street: aggressive new taxes on billionaires, an additional tax on financial transactions like stock trades and annual investment gains taxes for the wealthiest households.
Just hours later she told an audience in Iowa: “Our democracy has been hijacked by the rich and the powerful.”
Interviews with more than two dozen hedge-fund managers, private-equity and bank officials, analysts and lobbyists made clear that Ms. Warren has stirred more alarm than any other Democratic candidate. (Senator Bernie Sanders, who describes himself as a socialist, is also feared, but is considered less likely to capture the nomination.)
Wall Street has long tried to influence American politics and generally donated to both parties, though it traditionally has been more aligned with Republicans. But while there’s no coordinated strategy, the industry is more or less united against Ms. Warren. With just months before the first voting begins, it is unleashing a barrage of public attacks, donating money to her rivals and scrambling to counter her blistering narrative about Wall Street.
“Everyone is nervous,” said Steven Rattner, a prominent Democratic donor who manages the wealth of Michael R. Bloomberg, the former New York City mayor. “What scares the hell out of me is the way she would fundamentally change our free-enterprise system.”
While even some of Ms. Warren’s detractors see her soak-the-rich approach as a winning issue in the Democratic primary, President Trump and his team would undoubtedly try to weaponize it against her in a general election. Already, some Republicans are defining Ms. Warren as a veiled socialist who would disrupt the fragile economy with her sweeping plans.
As president, Ms. Warren would also confront a long list of powerful and well-funded opponents on Wall Street, potentially complicating her ability to enact her agenda. Her tightly organized campaign has no Wall Street liaison or circle of advisers drawn from the industry and has done little outreach to the finance world.
Yet even if Ms. Warren cannot get some of her more far-reaching proposals through Congress, finance executives fear that as president she would appoint regulators who take a far stricter view of the industry.
Ms. Warren’s campaign declined to comment, pointing to her public remarks, in which she has welcomed doing battle with Wall Street.
In recent weeks, Wall Street’s warning signals about Ms. Warren have begun exploding into the public, coloring analyst reports and earnings calls, and echoing from the stages of industry conferences. The billionaire money manager Leon Cooperman castigated her in an open letter released Thursday, and on Friday Goldman Sachs researchers suggested that tax hikes proposed by Ms. Warren and others could lower corporate earnings by 11 percent.
Prominent money managers have predicted a double-digit decline in the stock market if Ms. Warren wins the presidency, a claim that some skeptics find hyperbolic. Some traders and investors have said, only half-kiddingly, that they’ll leave the country — or at least, relatively high-tax states like New York — to minimize the impact of what they view as punitive policies.
The wariness exists even in more friendly Democratic terrain. When prospective donors to the Black Economic Alliance, a nonpartisan political action committee focused on bettering the economic lives of black Americans, gathered one evening last month, the conversation quickly turned into a debate over Ms. Warren, according to someone who attended.
Over dinner at Michael’s in midtown Manhattan, some attendees suggested they would consider not voting in the general election if Ms. Warren won the nomination. They objected to her proposed “ultra-millionaire tax,” a 2 percent annual tax on households worth $50 million to $1 billion that would constrain people’s ability to pass their wealth on to their children.
Ms. Warren’s many policy plans take aim not only at multimillionaire pocketbooks, but also the financial responsibilities of banks and investment firms. Yet many Wall Street officials believe that Ms. Warren does not understand modern-day investing and lending, does not respect financial companies and is demonizing those who work in the markets.
Mitch Draizen, a former fund-raiser for Mr. Obama who made his money in the financial industry, said he would back Ms. Warren’s candidacy against Mr. Trump’s. But he is supporting former Vice President Joseph R. Biden Jr. this time, worried about Ms. Warren’s disruptive approach. “She would be just as unpredictable and unproductive as Trump if she were to become president, and who needs that,” he said. “She’s getting a little carried away and to me it’s irresponsible.”
On the campaign trail, she has emphasized that she is pushing only for fairness and accountability. She says she believes in markets — as long as they have rules. And unlike Mr. Sanders, Ms. Warren has not argued that billionaires should not exist; she wants them to pay much higher taxes than they do now.
“Understand I’m not proposing this because I’m cranky,” she said at a stop in New Hampshire recently.
Yet, it’s also clear that Ms. Warren and her campaign see this fight as a political winner, one that can bolster her populist appeal. Indeed, a number of Democrats on Wall Street have dryly noted that every time their colleagues complain in the press, Ms. Warren picks up more votes in Iowa.
Even within the finance community, she has supporters — some of whom view Wall Street opposition as a thinly veiled attempt to fend off any policies that affect profits.
“The greed of Wall Street, of area code 212 types, has just gotten absolutely carried away, and it needs to be rolled back,” said Marc Cohodes, a longtime short-seller who bets against troubled companies. Of Ms. Warren, he said, “She would be great, I think she would be a breath of fresh air.”
Ms. Warren has already collected campaign donations from employees of JPMorgan Chase, Barclays, and the asset-management firm Point72, among others.
Wall Street’s allergy to regulation is nothing new. Throughout the 1990s and 2000s, despite the industry’s rampant risk taking, financial institutions successfully beat back proposed curbs on their leverage, lending and use of exotic financial instruments. Even in the aftermath of the recession, banks and financial firms battled the implementation of the 2010 Dodd-Frank act, which imposed broad restrictions on banks and trading.
Now, in ways big and small, Wall Street has begun bracing for a possible Warren administration.
Some money managers and traders are testing something they call the “Warren trade”: either a bet that U.S. stocks will fall next November on the news of her victory, or that certain stocks in areas she plans to regulate aggressively — like health care, energy, and finance — will fall during the period between now and late 2020.
Private equity executives — who believe the “Pretty Woman” video gives an outdated and inaccurate view of their business — have also begun extolling the virtues of their business, kicking off a kind of pre-emptive public relations effort. Their lobbying organization, the American Investment Council, is promoting the industry as a job creator in op-eds, interviews and a digital ad campaign.
And Blackstone’s chief executive officer, Stephen Schwarzman, said recently that his firm has created 100,000 more jobs than it has cut in the last 15 years.
Business executives are also donating to Ms. Warren’s more moderate challengers, hoping to boost candidates with less transformative visions for revamping the economy.
Of the roughly 1,400 biggest donors to Hillary Clinton’s 2016 campaign, just under 2 percent have so far given the maximum contribution to Ms. Warren, according to a New York Times analysis. That’s a far lower percentage than those who gave to rivals like Mr. Biden.
Ms. Warren also ranks well down the list in money raised from individual donors in the finance industry. She has raised about $330,000, according to year-to-date figures compiled by the Center for Responsive Politics, far less than Mr. Buttigieg, who leads the Democrats with nearly $1.3 million. (At about $1.5 million, Mr. Trump is the biggest beneficiary of finance-industry donations.)
In her presidential campaign, Ms. Warren has eschewed donations from corporate PACs and bundlers, swearing off big donor events as she collects a flood of small donations that have put her among the race’s leading fund-raisers. Last month, her campaign announced that they would no longer accept contributions of more than $200 from executives at big banks, hedge funds or private equity firms.
Ms. Warren’s Stop Wall Street Looting Act mandates that private-equity firms guarantee the debt of any companies they buy, a move that would make their corporate investments far more risky and possibly dampen their ability to make profits for investors. She has also proposed reinstating the Glass-Steagall Act, the landmark legislation that separated commercial banking from investment banking for decades before its repeal in 1999.
The effect of such sweeping measures, some market participants say, could be profound.
“I am a fan of Elizabeth Warren, but electing her may be a case of ‘be careful what you wish for,’” said Jamie Lester, a former hedge-fund analyst who now works as a consultant. “I don’t think she realizes how fragile our economy and financial system are, and she will be driving a bulldozer through them.”
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