Unfortunately they aren't naming names, but Vanity Fair spoke privately to Wall Street executives who have many of the same concerns about the Republican tax cut bill that we do.
We haven't really seen an outpouring of support for the GOP tax cut bill from Wall Street bankers, we've only seen firms prepare for it by buying up stocks and betting on future investments. But those are short-term actions. If the Republican tax cut bill passes, corporations will quickly use their windfall to buy back their stocks and pay out dividends. And then what?
It's what comes after the windfall that has some executives worried.
"It’s a Ponzi scheme,” a Wall Street executive told me, dismissing the idea that a multi-trillion dollar tax cut for multinational corporations would trickle down throughout the economy and also pay for itself. [...]
Since, generally speaking, one of the largest state taxes is on property—your home—eliminating the federal tax deduction for state property taxes will inevitably cause the cost of homeownership in states with high property taxes to go up. It follows, logically, that if the annual cost of home ownership goes up, then the value of the home—which is for most people their single most-valuable asset—must go down. The National Association of Realtors commissioned a recent study that predicted that the elimination of the deduction for state and local taxes could result in a decrease in home valuations of between 10 percent and 17 percent.
That would wipe out a huge amount of homeowner equity, with the usual expected consequences: the sick feeling that comes from knowing that suddenly you are poorer, which can then lead to lower consumer spending, kicking off a recession. Furthermore, if the value of homes goes down, then whatever equity has been built up in those homes will also go down, and the ability to unlock that equity—through home-equity loans or reverse mortgages—will also decrease. Lower home values could also lead to problems—again—for the government-sponsored entities Fannie Mae and Freddie Mac that have guaranteed some home mortgages, which are secured by homes worth materially less. New problems for the G.S.E.s will make it harder for people to get mortgages, leading to a lower level of home ownership than already exists.
So, those are the potential long-term consequences that has some executives worried, but won't they benefit from the bill?
Yes and no. Corporate stock owners are going to see returns pouring in, but that's their only immediate benefit. We've seen other signs that very few corporations are planning to make capital investments beyond their current means. Trump's top economic adviser Gary Cohn spoke at the Wall Street Journal's CEO Council last week where only a handful of executives raised their hands when he asked the crowd if they're planning to make new investments.
VIDEO: CEOs asked if they plan to increase their company's capital investments if the GOP's tax bill passes.
A few hands go up.
"Why aren't the other hands up?" Gary Cohn asks.#WSJCEOCouncil pic.twitter.com/TD2oAlN27S
— Natalie Andrews (@nataliewsj) November 14, 2017
As I've noted before, there's a bizarre disconnect between Republican policy and the supposed beneficiaries of that policy that we haven't really seen before. The political environment we see today is nothing like the environment of the Bush administration.
Wall Street isn't exactly begging for tax cuts. Neither are other corporations. There are no executives spearheading the movement. No one is pretending they're going to use the tax cuts to hire more workers or raise wages. On the contrary, numerous executives have publicly stated that they will use their tax cuts to automate labor, buy back stocks, and pay out dividends.
Some executives have been far more critical.
Howard Schultz, the billionaire executive chairman of Starbucks, was more blunt: “This is not tax reform,” he said at the DealBook conference in New York last week. “This is a tax cut. It’s fool’s gold that he wants to take the corporate tax rate from 35 percent to 20 percent. For what purpose? Is that profit going to go back to the people who need it the most? Is that going to help half the country that doesn’t have $400 in their bank account for a crisis? No.”
There is one group of people more excited than any other about the Republican party's tax cuts and that's Republican party donors.
The GOP's donors aren't necessarily the same people we associate with banks and other corporations, though some do oversee and operate corporations of the worst kind. From Trump's billionaire casino buddies to the Kochs, the Mercers and the Ricketts -- political dinosaurs and old money -- these are the people demanding tax cuts. These are the people who want to eliminate the estate tax and create new deductions for their own political spending.
And that's not a secret. Republican congressmen have said as much out loud in front of microphones and cameras.
“The most excited group out there are big CEOs, about our tax plan,” Gary Cohn, the leading White House economic adviser and former chief operating officer at Goldman Sachs, said in an interview with CNBC on Thursday. [...]
“My donors are basically saying, ‘Get it done or don’t ever call me again,’” Rep. Chris Collins (R-N.Y.), himself a millionaire, said on Tuesday. [...]
Sen. Lindsey Graham (R-S.C.) told reporters on Thursday that a failure to pass tax reform would fracture the Republican Party and lead to more far-right wing primary challengers. “The financial contributions will stop,” he added. [...]
“(Donors) would be mortified if we didn’t live up to what we’ve committed to on tax reform,” Steven Law, the head of Senate Conservatives Fund, a super PAC affiliated with Senate Majority Leader Mitch McConnell (R-Ky.), told the New York Post.
Republicans think failing to pass tax cuts will doom them in 2018, and that may be true, but I think actually passing tax cuts will be worse for them.
The Republican party is not a governing party, it's a suicide cult.