Jul 21, 2019

Elizabeth Warren's Wall Street frenemies

Felix Salmon, author of Edge

Illustration: Rebecca Zisser/Axios

Elizabeth Warren understands Wall Street better than any other presidential candidate. She studied it in her previous career as a Harvard professor, and she has effectively built her own think tank inside the Senate, coming up with genuinely novel ideas for how to improve financial regulation.

What to watch: Warren has already received the grudging respect of many on Wall Street. Her diagnoses of where the financial services industry falls short are generally accurate, and her proposed regulations would probably give a competitive advantage to financial giants with large compliance departments.

Driving the news: Warren blasted the private equity industry this week. She understands that bankruptcy and limited liability can be good for capitalism and society as a whole, but that they can also be abused. When that happens, private equity companies can end up making profits from portfolio companies that go bust. Employees invariably bear the brunt, alongside trade creditors and even consumers with gift cards.

Our thought bubble: Private equity is the polite term for what used to be called leveraged buyouts. Mike Milken gave buyouts a bad name in the 1980s, and Warren is betting that private equity is similarly unloved today. Axios' Dan Primack says that Warren's proposals would kill much of the private equity industry, especially the turnaround sector. He may well be right. The question is whether it would be mourned.

What's next: Warren's academic research changed the way bankruptcy was thought about. Her proposal for a Consumer Financial Protection Bureau became reality, with broad public support. When she says that the unbanked spend more on interest and fees than they do on food, she touches a nerve. It's easy to see potential profits for smart financial services industry executives who embrace her legitimate criticisms and try to get ahead of these issues.

Go deeper: Elizabeth Warren on the issues, in under 500 words

Go deeper

George Floyd updates

Protesters gather north of Lafayette Square near the White House during a demonstration against racism and police brutality, in Washington, D.C. on Saturday evening. Photo: Jose Luis Magana/AFP via Getty Images

Tens of thousands of demonstrators have been rallying in cities across the U.S. and around the world to protest the killing of George Floyd. Huge crowds assembled in Washington, D.C., Philadelphia and Chicago for full-day events on Saturday.

Why it matters: Twelve days of nationwide protest in the U.S. has built pressure for states to make changes on what kind of force law enforcement can use on civilians and prompted officials to review police conduct. A memorial service was held for Floyd in Raeford, North Carolina, near where he was born. Gov. Roy Cooper ordered all flags to fly at half-staff to honor him until sunset.

Updated 3 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 11:30 p.m. ET: 6,889,889 — Total deaths: 399,642 — Total recoveries — 3,085,326Map.
  2. U.S.: Total confirmed cases as of 11:30 p.m. ET: 1,920,061 — Total deaths: 109,802 — Total recoveries: 500,849 — Total tested: 19,778,873Map.
  3. Public health: Why the pandemic is hitting minorities harder — Coronavirus curve rises in FloridaHow racism threatens the response to the pandemic Some people are drinking and inhaling cleaning products in attempt to fight the virus.
  4. Tech: The pandemic is accelerating next-generation disease diagnostics — Robotics looks to copy software-as-a-service model.
  5. Business: Budgets busted by coronavirus make it harder for cities to address inequality Sports, film production in California to resume June 12 after 3-month hiatus.
  6. Education: Students and teachers flunked remote learning.
Updated 6 hours ago - World

In photos: People around the world rally against racism

Despite a ban on large gatherings implemented in response to the coronavirus pandemic, protesters rally against racism in front of the American Embassy in Paris on June 6. Photo: Julien Mattia/Anadolu Agency via Getty Images

Tens of thousands of people have continued to rally in cities across the world against racism and show their support this week for U.S. demonstrators protesting the death in police custody of George Floyd.

Why it matters: The tense situation in the U.S. has brought the discussion of racism and discrimination onto the global stage at a time when most of the world is consumed by the novel coronavirus.