Rich businessmen remember they're Republicans
Joe Biden needs to remind the voters of why
Two things happened last week that I don’t think are coincidental.
One is that the Biden administration announced new regulatory caps on “overdraft fees” charged by America’s banks. Banks obviously have to charge some kind of fee for this, but overdraft fees have become a major profit sector for a lot of banks, and that’s a pretty dysfunctional basis of competition.
Banking plays an important role in society and the economy, and there’s nothing wrong with banks making money. But a lot of the low-hanging fruit for profit-taking comes from purposefully confusing or misleading people who lack financial literacy and are bad at math into paying more than they realize. There’s ample room for paternalistic regulation that forces institutions to offer more transparent products with clearer (and, in this case, lower) fee structures that make it harder to prey on people’s ignorance. I don’t love the direction Elizabeth Warren took post-2016, but this original set of arguments that helped her rise to prominence are sound, and the Biden administration’s staffing of financial regulatory jobs reflects her influence in a good way.
The second thing that happened is that Jamie Dimon, CEO of JPMorgan Chase, went to Davos and explained that Trump was right about immigration and suggested that it’s a mistake for Joe Biden to use “MAGA” as a pejorative.
We got plenty of coverage from Davos about how CEOs like Trump now, though it was punctuated by Anthony Scaramucci, who actually worked for Trump, warning that this is short-sighted and Trump is a dangerous scumbag. But a lot of this coverage focused on Trump’s electoral prospects. Business class Republicans mostly wanted to see the party go in a different direction for 2024 — likely Ron DeSantis, though some also flirted with Tim Scott — but they’re now reconciled to riding with Trump, who they see as a non-optimal candidate, but a lock for the nomination and perfectly capable of beating Biden.
And beating Joe Biden really is the important part.
But if you think the reason Dimon wants to beat Biden is that he’s concerned about border security or Biden’s insensitivity to the MAGA faithful, then I’ve got some high-fee investment management services to sell you.
There was a lot of fear on the left, and hope in the c-suite, that when Trump realigned the GOP around a more downscale electorate, Democrats would respond by becoming more of a Macron-like pro-business party. But this didn’t really happen. Biden wants to make the Davos set pay higher taxes and he wants the banking industry to be more regulated from both a standpoint of safety and of consumer protection. He’s fostered tight labor markets that are narrowing inequality. And Dimon not only hates it, he hates it enough to avoid saying what he really thinks and instead strategically focus on politically constructive messages about immigration.
Because what Jamie Dimon really wants is the return of business friendly regulations that will make more money for him personally, for his shareholders, and for his friends.
Joe Biden’s record on bank regulation
Bank regulation is a good example of the Biden administration’s media issues that I wrote about on Monday. When Barack Obama was president, arguments that he should be tougher on the banks got a lot of play in the national press.
“Is Barack Obama too soft on banking?” was a high-salience question that anyone who talked about politics was expected to have an opinion on and discuss from time to time. Then, during Donald Trump’s term as president, this stopped being an issue that divided Democrats and became a topic on which all factions of the party agreed that Trump was going too far, and so almost nobody covered it. And now that Biden is in office and has appointed less industry-friendly staffers from the Warren wing, progressives have to an extent lost interest in arguing about bank regulation and moved on to fighting with mainstream Democrats about other issues.
Bank lobbyists, by contrast, did not lose interest and are extremely aware of a number of stories that have not attracted much general attention: