Elizabeth Warren will give Wall Street something to cry about

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Today's Agenda

Elizabeth Warren's real threat to Wall Street may not be what you think.
Economic models calling for a Trump re-election may overstate the case.
A trade truce can't stop the new economic Cold War.
Uber still isn't making a long-term case for itself.

This Is What It Sounds Like When Wall Street Cries

There was a brief moment this summer when Wall Street's long-time loathing of Senator Elizabeth Warren seemed to ebb. It was "warming to her," however reluctantly, we were told. The honeymoon didn't last long: Financiers are now openly weeping on television over the idea of her in the White House.

Warren's wealth-tax and Medicare for All plans draw the most ire, threatening tax hikes that Wall Street types say will wreck the economy and markets. But a President Warren would probably end up like most other presidents, with little direct influence over GDP or the S&P 500, writes Nir Kaissar. Barring an unlikely filibuster-proof Democratic majority in the Senate, Warren probably couldn't pass big, politically divisive tax plans. Her plan to clamp down on private equity, on the other hand — subtly dubbed the "Stop Wall Street Looting Act" — could be a much easier political sell, particularly if the economy keeps struggling, Nir writes. As highly leveraged buyouts sour, layoffs will mount and calls for change will increase, along with Wall Street's tears.

But another Warren idea with some popular support could cut in the other direction for finance: her call to cancel much of the nearly $1.5 trillion in outstanding student-loan debt. This could free up more than $1 trillion in debt relief, amounting to a big tax cut, writes Brian Chappatta. Some critics suggest this would mainly benefit the wealthy, but to Wall Street types that would seem to be a feature, not a bug.

Handicapping Trump's Election Chances

All of this talk about what Warren will and won't do as president may well be moot; a bunch of election-forecasting models based on economic data predict an easy re-election for President Donald Trump. But these models are based mainly on national data and ignore regional differences that could swing the Electoral College, writes Karl Smith. In some manufacturing-heavy swing states, the outlook for Trump is much less rosy, thanks partly to his own trade war.

Further Election Reading: Our political system is not ready for more foreign attacks in 2020. — James Stavridis

Free Trade Is Still an Endangered Species

Anxiety about the political cost of a manufacturing slowdown gives Trump incentive to end that trade war. Thus the White House has lately made a bunch of stock-boosting

happy talk about how close it is to a truce with China. But an interim trade deal won't be nearly enough to reverse a clear macro trend toward less free trade, warns David Fickling. The latest example is the Regional Comprehensive Economic Partnership in Asia. India declined to join, which is a boon for the U.S., but another step backward for India's economy, writes Mihir Sharma. And the RCEP carves out another trading sphere dominated by China, to go along with the Trans-Pacific Partnership, David writes. The world is increasingly splitting into competing economic camps, in an unhappy repeat of the Cold War.

Further New Cold War Reading:

Chinese and Indian immigrants are typically the most skilled and upwardly mobile immigrants, and we are admitting too few of them. — Noah Smith
Taiwan Semiconductor Manufacturing Co. will be forced to choose between China and the U.S. — Tim Culpan

Telltale Charts

Uber Technologies Inc. got back to growth in the latest quarter, but in a way that may limit its future growth, writes Shira Ovide, adding to questions about the company's long-term viability.