Rich businessmen have remembered they're Republicans. By Matthew Yglesias

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Rich businessmen remember they're Republicans. Joe Biden needs to remind the voters of why.

By Matthew Yglesias.

Two things happened last week that I don’t think are coincidental.

One is that the Biden administration announced new regulatory caps on “overdraft fees” charged by America’s banks. Banks obviously have to charge some kind of fee for this, but overdraft fees have become a major profit sector for a lot of banks, and that’s a pretty dysfunctional basis of competition.

Banking plays an important role in society and the economy, and there’s nothing wrong with banks making money. But a lot of the low-hanging fruit for profit-taking comes from purposefully confusing or misleading people who lack financial literacy and are bad at math into paying more than they realize. There’s ample room for paternalistic regulation that forces institutions to offer more transparent products with clearer (and, in this case, lower) fee structures that make it harder to prey on people’s ignorance. I don’t love the direction Elizabeth Warren took post-2016, but this original set of arguments that helped her rise to prominence are sound, and the Biden administration’s staffing of financial regulatory jobs reflects her influence in a good way.

The second thing that happened is that Jamie Dimon, CEO of JPMorgan Chase, went to Davos and explained that Trump was right about immigration and suggested that it’s a mistake for Joe Biden to use “MAGA” as a pejorative.

We got plenty of coverage from Davos about how CEOs like Trump now, though it was punctuated by Anthony Scaramucci, who actually worked for Trump, warning that this is short-sighted and Trump is a dangerous scumbag. But a lot of this coverage focused on Trump’s electoral prospects. Business class Republicans mostly wanted to see the party go in a different direction for 2024 — likely Ron DeSantis, though some also flirted with Tim Scott — but they’re now reconciled to riding with Trump, who they see as a non-optimal candidate, but a lock for the nomination and perfectly capable of beating Biden.

And beating Joe Biden really is the important part.

But if you think the reason Dimon wants to beat Biden is that he’s concerned about border security or Biden’s insensitivity to the MAGA faithful, then I’ve got some high-fee investment management services to sell you.

There was a lot of fear on the left, and hope in the c-suite, that when Trump realigned the GOP around a more downscale electorate, Democrats would respond by becoming more of a Macron-like pro-business party. But this didn’t really happen. Biden wants to make the Davos set pay higher taxes and he wants the banking industry to be more regulated from both a standpoint of safety and of consumer protection. He’s fostered tight labor markets that are narrowing inequality. And Dimon not only hates it, he hates it enough to avoid saying what he really thinks and instead strategically focus on politically constructive messages about immigration.

Because what Jamie Dimon really wants is the return of business friendly regulations that will make more money for him personally, for his shareholders, and for his friends.

Joe Biden’s record on bank regulation

Bank regulation is a good example of the Biden administration’s media issues that I wrote about on Monday. When Barack Obama was president, arguments that he should be tougher on the banks got a lot of play in the national press.

“Is Barack Obama too soft on banking?” was a high-salience question that anyone who talked about politics was expected to have an opinion on and discuss from time to time. Then, during Donald Trump’s term as president, this stopped being an issue that divided Democrats and became a topic on which all factions of the party agreed that Trump was going too far, and so almost nobody covered it. And now that Biden is in office and has appointed less industry-friendly staffers from the Warren wing, progressives have to an extent lost interest in arguing about bank regulation and moved on to fighting with mainstream Democrats about other issues.

Bank lobbyists, by contrast, did not lose interest and are extremely aware of a number of stories that have not attracted much general attention:

The Consumer Financial Protection Bureau sued Moneygram for delaying transfers and withholding refunds.

They fined Wells Fargo $3.7 billion for a diverse range of malfeasance. They “did not record customer payments on home and auto loans properly, wrongfully repossessed some borrowers’ cars and homes and charged overdraft fees even when customers had enough money to cover purchases they made with their bank cards.”

The Trump administration used the Covid emergency to suspend a bunch of CFPB rules, which the Biden administration swiftly put back in place.

Biden appointees at the Fed have imposed tougher capital requirements, and Biden’s key bank regulation staffer at the Fed is pushing for prudential regulation of bank executive compensation.

Biden has specifically sought legislation to empower the FDIC to look more closely at bank executive compensation.

These are very good reasons, if you are the executive of a major bank, to dislike Joe Biden. The way banking works is that if you take highly leveraged risks, you can earn high profits in most years, and pay yourself handsomely in accordance with those profits. But if disaster strikes, as we saw during 2007-2008 and more recently with Silicon Valley Bank, regulators will likely step in and put a floor under things. That doesn’t mean managers get away scot-free — far from it — but the money you made during the good years, along with the houses and the cars and retirement savings you banked, are yours to keep even if you get fired.

It’s a pretty sweet deal. Biden is rightly trying to make it less sweet, and the beneficiaries of the deal hate him for it. Biden is also trying to raise rich people’s taxes in order to reduce the deficit, while Trump wants deficit expanding regressive tax cuts that will be only partially offset by inflationary tariff increases. These are not morally good reasons for Jamie Dimon, a high-income bank executive, to prefer Trump over Biden. But they are sound self-interested reasons for him to do so.

Issue salience matters

You could imagine a world in which Dimon was more invested in expressive rather than instrumental politics and flew to Davos to say something like “I completely sympathize with the women who work for me who are fired-up about abortion rights, but Senate Republicans probably won’t nuke the filibuster in a way that lets them ban abortion nationally, whereas they absolutely will use the budget reconciliation process to lower my taxes, and that’s why I’m urging everyone in the rich business executive community to vote for Trump.”

But he doesn’t do that.

Instead, he frames his concerns in a way that generates articles based on the pretense that there is something surprising or interesting about rich business executives warming up to the idea of a Republican Party administration.

Similarly, Elon Musk, who used to publicly worry about the slowing rate of population growth, has taken to tweeting about the need to crack down on illegal immigration. But that doesn’t mean he’s urging Mike Johnson to approve bipartisan border security legislation, the way someone super-concerned about the border would. Because the worse things are at the border, the better things are for Trump’s election odds — which is why Trump is urging Johnson to block any legislation.

Immigration legislation, like abortion legislation, would be subject to the filibuster. And with Biden in office and border legislation yoked to Ukraine aid, mainstream Democrats have strong incentives to make concessions to the GOP. If Trump becomes president, that all goes away and the prospects for getting GOP immigration priorities done get worse. What gets better, though, is the prospect of rich people getting their taxes cut, and of banker-friendly and union-hostile regulators getting appointed to positions of power.

Musk, of course, never tweets about how he’d like a tax cut or a more right-wing NLRB, just like Dimon goes on television to talk about immigration and the idea that Biden is being disrespectful rather than complaining about banking regulations. In a more functional country, high-profile people worried about illegal immigration would be urging House Republicans to come to the table and get something done. But, again, the point here, not just from Johnson but from Dimon and Musk, isn’t to accomplish anything on immigration — it’s to raise the salience of the issue as a club to beat Biden with. And it’s time to fight back.

Biden could use a (mild) dose of class war

A friend of mine who’s a very sharp political observer likes to say that in the 2016 primary, Democrats had an argument about whether to move left on cultural issues (Hillary) or on economic issues (Bernie), and they wound up compromising in 2020 by moving left on both.

I don’t think that was incredibly wise, and I don’t think Biden needs to continue to move left on economic policy. To an extent, I think he should moderate in this area — focus more on boosting productivity, talk about deficit reduction, and otherwise get back a bit to Clinton/Obama approaches. But I do think he needs to capture some of the spirit of Bernie-style economic populist rhetoric. Because while white collar educated workers hate Trump, and the CEO class has been more leery of embracing him than they have other GOP candidates, at the end of the day, business executives are gonna do what’s good for them, and they’re laying the groundwork for that already.

And I think it’s important for Biden to call that out and frame the stakes of the 2024 campaign as not just about “democracy” in an abstract procedural sense, but in a concrete sense. After all, what is the point of democracy?

The point is that the American people, together, can insist on policies that serve the interests of the many rather than the few. That we can drive down the cost of prescription drugs, even if pharmaceutical companies don’t like it. That we can have a consumer protection agency for financial products, even if banks would be more profitable without it. And that we can insist that the richest people in the country do their part to close the budget deficit and put the economy on trend for sustainable growth. Biden doesn’t need to embrace socialism or any new policies, but I do think he has to talk about his policies as being broadly beneficial while also inflicting costs on the richest few.

Dimon trying to frame Biden’s critique of MAGA as an attack on everyone who votes for Trump is clever politics, and it needs to be rebutted. Biden is everyone’s president and he enacts policies — like the prescription drug price cuts — that benefit senior citizens, most of whom voted for Trump, because he believes it’s the right thing to do. But he is an enemy of bank CEOs who want to rip people off or earn exorbitant salaries with risky practices that require bailouts. Those CEOs don’t like him and they are trying to get rid of him, and they’re happy to wield whatever arguments they think will protect their money.