Much has been made of Joe Biden’s public “pivot to the left” in recent weeks, from calling for a stimulus “a hell of a lot bigger” than $3 trillion to seating Alexandria Ocasio-Cortez and other progressive populists on major policy committees. But while Biden seems sincere about bringing progressives into the fold for November, he remains the candidate who told high-dollar donors he “may not want to demonize anybody who has made money.”
Back-to-back Bloomberg reports showed that side of Biden recently. First, a survey of Wall Street donors found that far from worrying about their hold on Biden, banksters are giddily picking out which executive branch jobs they want for themselves and their friends. Then on Thursday, Biden’s team shut out reporters from hearing questions at a virtual Wall Street fundraiser, a first for the campaign.
Hillary Clinton can tell you that there’s no faster way to alienate progressives and populists than secret meetings with bankers. Yet Biden clearly recognizes that the Democratic left wing has power and leverage, and that he needs them to show up at the polls. So which side will Biden choose? The bankers, or the people?
Maybe Biden genuinely doesn’t think he needs to make a choice. Wall Street lobbyists are very good at telling politicians that progressive reform and big-business profiteering can go hand in hand, even though they cannot. Case in point: Peter Scher, a member of the Biden Institute’s policy advisory board and longtime man-about-town in D.C. He was mentioned in Bloomberg’s article as a potential Wall Street entrant in a Biden administration.
In interviews, Scher immediately comes off as gregarious and positive, the kind of backslapper who recommends the “Best BBQ in town!!” when Playbook interviews him on his birthday. But Scher has run all of JPMorgan Chase’s political influence operations since 2008. He is a brotherly and sociable person, but he has worked for two decades to undermine governance by and for the public, rather than private, interest.
After helping negotiate Chinese entry into the World Trade Organization for the Clinton administration, Scher cashed in on his global trade connections by running the Governance and Global Trade (read: de facto lobbying) section of BigLaw firm Mayer Brown. A few months before the crash in 2008, Jamie Dimon hired Scher to join JPMorgan’s Government Relations department (again, read: de facto lobbying).
Since then, he’s helped the bank scream about the Volcker Rule, loosen Community Reinvestment Act rules (letting it avoid lending to communities of color), and of course, chip away nonstop at any protections on the derivatives trading that caused the 2008 crash, to name just a few lowlights. Though Wall Street has bounced back even as millions lose their jobs, thanks to the Fed’s multitrillion-dollar “money cannon,” Scher’s colleagues still insist that lawmakers must take a sledgehammer to all bank regulations during the pandemic. This is why, in Scher’s words, “people feel like the system has let them down.” Scher’s life’s work has been spent undermining the system.
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Predictably, Scher prefers to play up the softer forms of influence he runs at JPMorgan, especially corporate philanthropy. Since 2013, he’s constantly humble-bragged about the bank’s investment project in Detroit, where JPMorgan spent $350 million last year. Scher depicts the project as a humbling experience, where he’s learned that “if we’re going to create opportunity, you have to do it locally … Now the federal government of course has a role to play in it, but in my view, I think what we need to be moving towards is ‘How does the federal government, with its resources and expertise, support those local efforts?’”
The much-heralded $350 million price tag last year represented 0.3 percent of the 2019 revenues of America’s most profitable investment bank. Moreover, JPMorgan didn’t get involved in Detroit out of any sense of philanthropy or patriotism: After AFSCME President Lee Saunders drove a shareholder uprising in 2013, Dimon offered to “see if there’s anything we can do” for Detroit’s public pension-holders to quiet the union down. Thank the worker’s movement, not Jamie Dimon, for JPMorgan’s philanthropy. Separately, the Detroit investment appears to have been a large PR effort to encourage the privatization of public resources in the Motor City, which the city has obliged.
Some Detroiters have certainly had their lives improved by Scher’s work, including some of the one million with JPMorgan Chase accounts in the Detroit area. But Scher turns those Detroiters into political props for arguing to get the government off JPMorgan’s back. In 2018, he wrote a CNBC op-ed headlined, “Tax Reform Gives Companies ‘a Major Opportunity’ to Share the Wealth,” arguing that the Trump tax scam “provided a major opportunity for businesses to drive more inclusive growth.” The fact that higher taxes, publicly funded resources, and greater government spending could drive yet more inclusive growth, without any need to further enrich the powerful and with accountability to a democratic system, is naturally left unsaid.
Scher is a brotherly and sociable person, but he has worked for two decades to undermine governance by and for the public interest.
Billionaires and the corporations they lead wouldn’t undertake sophisticated image-boosting charity campaigns if they weren’t effective. It fits perfectly into the seductive neoliberal vision of a politics without conflict: What if the best way to help workers was actually to just stop fighting business so much? What if the best way to help Detroit was to just cut JPMorgan’s taxes? Wouldn’t that be convenient?
That vision of politics has popped up across Biden’s career. He has helped deregulate credit card companies and made life easier for Wall Street. Yet he’s also a historically bad fundraiser, and has a genuine affection for and identification with workaday middle-class America. In 2016, he articulated Bernie Sanders’s appeal perfectly: “Bernie is speaking to a yearning that is deep and real, and he has credibility on it, and that is the absolutely enormous concentration of wealth in a small group of people, with the middle class now being able to be shown being left out.”
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Scher knows how to talk about inequality, too. When asked about the Business Roundtable’s shift away from shareholder primacy, he said, “People think that there is kind of a ruling class in this country, both political and business, who don’t understand that there’s a problem out there. I think that it was really important for the top CEOs in this country to say, ‘We get it … Our purpose is not simply worrying about next quarter’s earnings.’” That is, of course, a wildly insufficient assessment of corporate America’s role in the inequality crisis, but it makes it sound like confrontation is not inevitable.
But a confrontation is inevitable, and the most likely battleground will be Biden’s executive branch appointments and personnel. He may pull people like Scher in for another spin through the revolving door, and he may also pull progressive economists like Darrick Hamilton and Stephanie Kelton in from his policy task forces. Perhaps the most likely outcome is a “team of rivals” approach trying to pull them all in.
But as appealing as the fantasy of Wall Street and progressives working hand in hand to uplift America may be, it’s just not how these things work in practice. Scher doesn’t just invest in Detroit all day; he also pressures lawmakers to slash Wall Street oversight, and puts his thumb on regulators to gut rules or else. The private forces that caused our multitudinous crises cannot save us from them. Biden must pick a side: a White House for Scher, or a White House for the people.