BY JOHN FOLEY
The following imaginary conversation between two Wall Street bankers was overheard in the changing room of Park Avenue’s elite Racquet and Tennis Club.
Jordan: So, the head of our family office is starting to get a bit antsy about 2020. I know 2016 was uncomfortable, but this time is something else. It’s all tax the rich and shut down Wall Street. I feel like the market rally’s running out of steam, and Democrats are just out to punish anyone who’s made it. What are you hearing from your people?
Patrick: You worry too much. Donald Trump’s a shoo-in. Sure, he’s the least popular president to run for re-election in history and only the third to be impeached. But the economy, or I should say the consumer, is doing great. Housing starts are on a roll and impeachment is DOA in the Senate. Oh, and it’s hard to dislodge a president after just one term if the economy is fine. Remember that Jimmy Carter had kicked off a recession, and George Bush Sr. raised taxes.
Jordan: Right. All the same, you’ve got to be a bit nervous about what happens if the Republicans win, and he keeps on down this trade-war road. Last year our guys were forecasting global GDP growth of 3.6%, and now it’s more like 3%. In real money that’s about $400 billion down the drain – with hardly any actual tariffs. And the budget deficit is going up during the best of times. That’s totally contrary to what we learned in Econ 101 at Harvard.
Patrick: Relax, everyone knows he’ll strike a deal with the Chinese. If they don’t fold before the election, they’ll give in afterwards when they realize Trump’s got another four years to turn the heat up. Plus, worst-case scenario is that growth takes a hit. That’s when Jay Powell and the Federal Reserve will step in. They’ve got it covered. Bigly.
Jordan: Ok, but just bear with me. What if he loses. I just looked this morning and Elizabeth Warren and Bernie Sanders were right up there for the Democratic nomination. I mean, my teenage kids love Bernie, but this idea that capitalism is broken is bad news for markets, for dealmaking, and, you know, for people like us.
Patrick: Yeah, I hear you. Do you really think Bernie or Warren has a chance, though? Even if Trump flames out, I’m banking on the three B’s – Biden, Buttigieg and Bloomberg. Joe Biden’s an old hand – ok, maybe too old – who’s not going to rock the boat. Pete Buttigieg is a Harvard man and former McKinsey guy. As for Mike, well, I am still a bit sore about the way he dropped his membership here. But really, there’s no better man for the job.
Jordan: Don’t get me wrong – I love Mike as much as anyone – notwithstanding that whole brouhaha when he quit the club. Lots of Republicans I know would flip for him. But he’s nowhere in the race right now.
Patrick: Maybe. Don’t bet against an establishment billionaire though. He’s already spent more on TV ads in swing states than any candidate ever. And if Biden can’t go the distance, or things go down to the wire when the Dems pick their candidate at the convention in Milwaukee, he’s got a definite shot.
Jordan: How so?
Patrick: Think of it this way. It’s a super-crowded field. Usually we know by Super Tuesday in March who’s leading the pack, but that might not happen this time because the party’s so divided. If it’s all still up for grabs by the time the convention happens in July it’s all down to those 760-odd so-called superdelegates – you know, the party elites and so on. They changed the rules so they don’t vote in the first round this time unless there’s an obvious winner already. If there isn’t, they wade in and we go to a brokered convention.
Jordan: Oh yeah, a brokered convention. Remind me?
Patrick: Basically, that’s where anything could happen. It’s a bunch of horse trading where people can switch their support and there’s another vote for the nomination. Everyone always predicts there’ll be one and it never happens, but this time could be different. If the delegates want someone closer to the center, that’s when Bloomberg could emerge as the dark horse. Or Amy Klobuchar or Buttigieg – someone centrist, maybe from the Midwest, who can win those states Hillary Clinton lost.
Jordan: Hmm. And if he doesn’t? What’s the plan if Warren or Sanders come out on top? I tell you, Bernie makes me nervous. He’s angrier than my wife was the day I got her that Peloton.
Patrick: Come on, dude. Being POTUS isn’t like being the candidate. Even Liz and Bernie, when they realize how much of the economy relies on finance, they’ll change their tune. And either way, they can’t do squat if the Senate remains divided. You can also bet that Jamie Dimon and a bunch of other moderate corner-office guys will be working to get them onside. The best thing about having an inexperienced POTUS is you can help mold their views.
Jordan: I guess. I feel like I heard that somewhere before. Anyway, I’ve got to split.
Patrick: See you at Buffy’s thing this weekend in Bridgehampton.
First published Dec. 30, 2019
IMAGE: REUTERS/Brendan McDermid