Should Democrats team up with Wall Street to fight Trump? Hell no.
Don't help Trump hand the country over to bankers
President Trump's broad assault on immigrants, Muslims, voting rights, and more has raised opposition to Trump among liberals to a fever pitch. And among some of them, that means it's time to put aside criticism of Big Finance in favor of a broad anti-Trump coalition. When Bernie Sanders tweeted over the weekend that the Democratic Party needs to be transformed to "stand up to Wall Street," critics argued that now is not the time.
While the rise of an extreme right president does call for a large coalition, it simply cannot include the financial industry. As both a matter of moral principle and political pragmatism, Democrats must strengthen their anti-Wall Street posture. Here's why.
First, regarding Trump's attacks on various minorities, Wall Street is itself deeply complicit in economic bigotry. Most glaringly in recent history, the financial crisis caused by Wall Street cratered black wealth far worse than it did for whites. It did that in part because toxic waste mortgage products were specifically marketed to middle-class black families — Wells Fargo salespeople called them "mud people" — who would have qualified for ordinary mortgages.
The broader economy is also structurally bigoted against women and minorities in large part because of Wall Street influence. For example, black unemployment is regularly about twice that of whites, and unemployment is generally kept high because of finance influence among policymakers at the Federal Reserve. Why? Because low unemployment means a greater share of GDP going to workers, and hence less available to be creamed off by banks. That's only one of many ways that Wall Street is a gigantic tick on the rest of society — bleeding value while providing nothing in return, and leaving the disproportionately black and brown population of poor people in the lurch.
Second, Wall Street is not popular, in large part because they have received preferential treatment from the political system. Ordinary citizens perceive, correctly, that banks have largely bought off the leadership of both parties. When Wall Street swindling caused the worst economic crisis in 80 years, the government lavished finance with a gigantic bailout and trillions in cheap loans from the Federal Reserve — while underwater homeowners were not only not helped, the government actually enabled foreclosures by ignoring the fact that most of them were being illegally conducted with forged documents.
Hillary Clinton's loss was overdetermined, meaning several factors could plausibly have tipped the balance between her and Trump, from the FBI letter in October to the endless quasi-scandal of her emails. But among these factors was certainly her many secret speeches to Wall Street banks, for which she was paid some $1.8 million between 2013 and 2015. It played into a largely correct perception that Clinton was the avatar of a deeply corrupt and dysfunctional status quo.
It's also probably not a coincidence that Clinton's campaign featured both relentless pursuit of Wall Street contributions and weak tea proposals on breaking up megabanks, increasing the minimum wage, and new welfare programs. Hinging your candidacy around acceptability to wealthy financiers tends to box you in politically — in particular, foreclosing the brutal regulations that would return finance to its healthy (read: far smaller) postwar share of GDP and corporate profits.
Third, many forces on Wall Street have proved to be key backers of Trumpism. Many of his picks for Cabinet and top staff have been finance goons, including his top adviser Stephen Bannon and Treasury Secretary Steven Mnuchin. Markets are booming at the prospect of Republicans passing huge tax cuts for the rich.
So Wall Street is deeply implicated in structural bigotry, many of its leading lights are enthusiastic supporters of Trump or actually working for him, and the sector as a whole is booming at the prospect of his preferred policy. And on the other hand, Trump's "Government Sachs" administration puts the lie to his pose as a tough-minded defender of working-class people against the political establishment. He is quite obviously going to let them bleed the country dry, and perhaps cause another financial crisis, while he whines about brands on Twitter.
Sometimes there are trade-offs between good policy and good politics. This is not one of those times. In this case, defeating Trump will mean abandoning the discredited notion that Big Finance money is something which must be raked in to achieve political success. On the contrary, it is actively harmful — and hence attacking Trump-enabled financial parasitism will pay political dividends.