With the eighth richest man in America joining a crowded field, it doesn’t matter if you’re Deval Patrick or Tom Steyer. You just need to appreciate how money thinks.
It’s unclear how well Mike Bloomberg plays beyond New York or what he would personally do for the country if for some reason he actually wins the presidency.
His term as mayor was relatively easy as long as you had cash, Wall Street connections or both. The city generated enough wealth to make the 2008 recession feel like just another bad winter.
For Bloomberg, that era was probably something like a victory lap after parlaying a must-have data terminal into a financial media empire. He’d built the signal system that drives Wall Street, so running the whole town was only a tiny technocratic stretch.
But Main Street is still a long way from Wall Street and moving his multi-billion-dollar interests into the White House makes an extremely poor fit.
The business of America versus the America of business
In theory, advisors should love having someone intimately familiar with the market run the country as well. Bloomberg helped program the rhythm we all dance to. The beats are his.
Think of how the last few years would have played out if Gary Cohn had picked the priorities: calm, maybe a little boring, but lucrative.
We’d have clarity on regulation and the investment environment. Retirement advice would be settled. Trade would probably be settled. Crypto vehicles would be settled.
The estate planning outlook would be as settled as it gets. The Fed would pick a framework and stick to it. Maybe a little boring, but fewer twists and less drama.
Of course that’s a complacent world where the elite are secure and everything else drifts. It’s a good world for planners and wealth preservation experts, passive postures.
Sometimes it’s good to rock the boat. Necessity is the mother of invention and disruption can create new fortunes even as it endangers old ones.
Gary Cohn’s world would have been easy. I suspect Bloomberg’s world would be even easier, much like the era when he ran New York.
But what really built Bloomberg’s New York was crisis. He came in a year after 911 and held on through 2008. His managers stayed busy behind the scenes, building a new city between the storms.
An easy world stifles innovation and real constructive change. Today’s advisory industry was born in 2008 when Wall Street as we knew it almost died. The industry of tomorrow is on the horizon now.
That industry does not thrive by being handed everything it needs by a sympathetic government. As we’ve seen, that’s only life support and sooner or later the crisis comes anyway.
And realistically speaking, what’s good for Mike Bloomberg, New York or “Wall Street” is not necessarily good for America. Investors looking for a calmer news cycle need to appreciate that.
Bloomberg is the industry. Most clients have never seen a Bloomberg terminal and don’t really care. Their interests are elsewhere.
Whether they’re loving the news cycle or living in dread every time they open their Twitter app is really in your hands. You can help them feel good about where they are in the world.
You can give them the best outcomes current policy supports. You don’t need an industry figure in the White House for that. Life is always a moving target. Taxes rise and fall. Opportunities open and close.
That’s the real business of America, the world your clients are facing. Because I guarantee you that no matter how hard it is to keep Main Street investors on track without second guessing, your fellow wealth managers make the worst clients of all.
Besides, many prefer to manage their money themselves while staying liquid in vanilla index funds and Treasury bonds. A lot of Nobel economics laureates do the same thing only without the private fund. They keep it simple.
If everything was simple, we wouldn’t have an industry. Robots would already be doing everything, dancing to the beats the Bloomberg terminal sets.
Wealth is already power
The question here is not so much what any Wall Street billionaire would do for the industry but what the motive is.
Mitt Romney ran on a family background in public service and a track record of running a small but fractious state. His Wall Street career should have been incidental to that, but became the central story of his campaign and ultimately he lost.
Bloomberg built a company and then let a great city run itself. There’s a big difference there. Maybe it would be an easy era if he won, maybe not.
Everyone has a sense of how the candidates would perform and that's why we vote.
No matter how much money any billionaire has, he or she still only gets one vote. Until recently, extremely wealthy people preferred to get around this by investing in public opinion.
The Koch brothers are the most prominent example of this. They never ran for public office themselves, but instead the family funds the machinery that gets sympathetic career politicians elected.
Arguably every activist “hobby” publisher from Hearst to Bezos has followed a similar approach. Money gives favored ideas a platform to spread. That’s as far as it goes.
The principal rarely decides to enter politics personally unless there aren’t any acceptable proxies. There are usually better ways to spend their time.
With that in mind, most presidents have been on the genteel side of wealthy. Even the Roosevelts barely cracked hundred-millionaire status in modern terms. The real power brokers were elsewhere.
As people have already noted, if Bloomberg really wanted to change politics, all he needs to do is fund a Koch-style network, buy his way into Fox News or build a new channel, party or both.
Otherwise, if he can’t find someone he likes as president, that’s a bigger problem. But it’s his problem. And if he really wants to run the country in his own right, electability is a bigger problem.
Really rich people evaluate their policy investments with an eye to efficiency. Bloomberg could simply flood the zone with attack ads against every politician he dislikes, or he could buy airtime for himself instead.
Again, most billionaires have other things to do. Bezos, Gates and Buffett aren’t running for president. Howard Schultz from Starbucks thought about it and then blinked.
Only Tom Steyer and now Deval Patrick from Bain Capital were angry and ambitious enough until now, and Patrick has a long track record of engagement in Washington and gubernatorial politics as well as Wall Street.
From all appearances, Steyer is just throwing money around in ways that a more careful strategist would divert to more effective channels. If he wants to save the weather, he can invest in tools to make that happen and the PR to bend opinion.
But if he simply hates Donald Trump, he doesn’t have to run for president. Every dollar diverted into his campaign could be better spent advancing his active policy goals.
Patrick is a little more complicated because he actually has that experience in the world beyond Bain and his bid is a lot newer. We’ll have to see what he brings to the debate and whether it’s the best use of his time and money.
As for Bloomberg, there’s not a lot of fire here yet. He’s got to get through the wall of populism in order to make much of an impact at all.