the national interest

Fake Democrat Urges Democrats to Favor Wall Street

Doug Schoen. Photo: Clint Spaulding/Patrick McMullan via Getty Image

Former Democratic adviser Doug Schoen — whose public identity consists largely of going on Fox News and talk radio to denounce every Democratic politician not named Clinton, and then ultimately to denounce the Clinton ones, too — somehow has an op-ed in today’s New York Times furnishing advice to the party he long ago left. Schoen’s argument is that Democrats should be friendlier to Wall Street.

Given that Wall Street caused the worst economic crisis in three-quarters of a century, and remains deeply unpopular (negative-21 percent favorable ratings, according to a recent Bloomberg poll), Schoen’s advice that Democrats “should strengthen ties to Wall Street” seems deeply counterintuitive.

Schoen suggests Wall Street is not actually unpopular, as evidenced by the fact that Donald Trump is president. “If voters really hated ties to Wall Street and financial elites, Republicans would not enjoy such a commanding electoral position — or have elected a New York plutocrat president,” he writes. This would seem to ignore the fact that Trump campaigned as a putative enemy of Wall Street, and polls found that voters considered him tougher than Clinton on financial regulation.

He offers four reasons. The first is that Wall Street has a lot of money, and if Democrats do nice things for Wall Street they will have more of it — which, okay, sure. Schoen’s less obvious reasons get increasingly strange:

Despite what the Democratic left says, America is a center-right, pro-capitalist nation. A January Gallup poll found that moderates and conservatives make up almost 70 percent of the country, while only 25 percent of voters identify as liberal. Even in May 2016, when Senator Sanders made redistribution a central part of his platform, Gallup found that only about 35 percent of Americans had a positive image of socialism, compared with 60 percent with a positive view of capitalism.

Schoen is asserting that because America isn’t socialist, it wants more Wall Street–friendly government. None of his evidence remotely supports that connection. It’s possible to support more stringent regulation of big banks without endorsing socialism.

Next, he argues that it is morally wrong to criticize the industry that finances other industries Democrats approve of:

Third, it is hypocritical for Democrats to maintain ties to Silicon Valley and then turn their backs on the very people who help finance its work. The financial industry brings to market the world’s most innovate [sic] products and platforms that expand the economy and create jobs.

What is he even saying? That tougher financial regulation would eliminate capital altogether? Wall Street finances everything. If Wall Street consumed a slightly lower share of the economy than the massive slice it currently devours, would those things cease to exist?

It’s Schoen’s last point that goes completely off the rails:

Fourth, demonizing Wall Street does nothing to bridge the widening gaps in our country. Wall Street has its flaws and abuses, which were addressed in part by the Dodd-Frank financial reform law. And yes, the American people are certainly hostile to and suspicious of Wall Street. But using this suspicion and hostility as the organizing principle for a major political party will consign Democrats to permanent minority status.

Note that Schoen utterly undercuts his previous points by conceding that Wall Street is extremely unpopular. That’s a pretty big concession to make in an op-ed arguing that Democrats should “strengthen ties” to the industry. But then Schoen proceeds to plead that “using this suspicion and hostility as the organizing principle for a major political party” is doomed to failure. It doesn’t matter how much people hate Wall Street, he says — a party that uses suspicion and hostility is doomed to permanent minority status. Maybe Schoen should try to think of an example of a recent political party that has used a message of suspicion and hostility and has still managed to hold on to power? It’s not actually hard to come up with one.

Fake Democrat Urges Democrats to Favor Wall Street