Photo Illustration: Sarah Grillo/Axios. Photo: Robyn Beck/AFP via Getty Images
Bernie Sanders has opened up leads in both Iowa and New Hampshire, according to most recent polls.
The big picture: Private equity might be hyperventilating into a paper bag, but it should be breathing a sigh of relief. At least temporarily.
The state of play: Buyout firms face an existential threat from either a Sanders or Warren presidency, but much more of a rhetorical threat from Warren's campaign.
- Sanders wants to largely dismantle modern capitalism, which would include private equity. In short, burn down the house and rebuild from scratch.
- Warren wants to "fix" modern capitalism, believing private equity is one of its most broken pieces. A remodel with private equity in the driveway dumpster.
Between the lines: If Sanders were to win the nomination, or remain a contender until the final primaries, it's unlikely that he'll mention private equity very often (outside of generalist broadsides against Wall Street and the 1%).
- Warren, on the other hand, would keep hammering private equity hard, particularly if and when we get the next brand-name bankruptcy or Taylor Swift tweet.
- Industry-specific rhetoric matters because, no matter the president, it can filter down into legislative perceptions and policies (including at the state and local levels).
The bottom line: Again, my needle-threading argument isn't about the ultimate White House winner. Private equity should fear both Sanders and Warren in the Oval. But if only one of them can remain viable for longer before falling, then buyout barons should hope for the self-described Democratic socialist.