Wall Street grew so frustrated with US President Joe Biden’s antitrust policies over the past three and a half years that many long-standing Democratic dealmakers considered switching their support to Donald Trump in the 2024 elections or even boycotting the ballot altogether.
But two events have dramatically changed that stance in the past fortnight: Trump named JD Vance as his running mate and Biden dropped his re-election bid, endorsing his vice-president Kamala Harris for the Democratic nomination.
Mergers and acquisitions practitioners are now reconsidering their electoral strategies. They consider Harris to be potentially more moderate than Vance, who is seen as an economic populist who could double down on the antitrust policies initiated by Biden’s trustbusters.
“Vance espouses this anti-corporate, populist and isolationist creed that big business, international trade, Wall Street, mergers, immigration, etc are all designed to hurt ‘real Americans’,” said a top dealmaker.
“Vice-president Harris is a moderate who has spent her life enforcing the law respecting precedent. While she would be tough on enforcement, it will be rational enforcement,” the dealmaker added.
Vance is at the vanguard of a new generation of Maga populists who condemn anti-competitive behaviour by US companies and view Big Tech as a threat to freedom of expression, hindering job creation and propagating the values of the left.
This rhetoric from the traditionally business-friendly Republican party has alarmed Wall Street, where several people describe Trump’s running mate as the rightwing alter ego of Bernie Sanders, the veteran leftwing senator from Vermont.
In his speech at the Republican National Convention last week, Vance railed against finance and big business. “We’re done, ladies and gentlemen, catering to Wall Street. We’ll commit to the working man,” he said.
“JD Vance might resonate with the Maga base, but the broader business community is very concerned this morning, as they should be,” said a prominent dealmaker the day after Trump selected the senator.
US antitrust policy has already become more vigorous over the past three years. Biden in 2021 appointed Lina Khan and Jonathan Kanter to respectively lead the Federal Trade Commission and the Department of Justice’s antitrust unit — a new generation of progressive officials who have clamped down on anti-competitive conduct across the economy.
Khan and Kanter are two of the least-liked individuals among financiers across the political spectrum as fear of their scrutiny has discouraged dealmakers and hurt transaction volumes.
But Wall Street appears less concerned about Harris. Despite being perceived as progressive, she has been backed by some notable names, including Blair Effron, the co-founder of adviser firm Centerview Partners, and Ray McGuire, a prominent banker at Lazard.
Several M&A bankers and lawyers believe that if Harris won the election she could replace Khan with somebody more deal friendly. But a Democratic operative called the speculation “just wish casting”, adding: “Do you think that Harris is going to toss out a 35-year-old brown woman immigrant progressive icon?”
Harris has not yet articulated her antitrust policy. But in 2010, when Big Tech was not facing as fierce a pushback from Washington and the public over its alleged market abuses, she said: “We cannot be short-sighted . . . we have to allow these [tech] businesses to develop and grow because that’s where the models will be created.”
“This is a very significant source of California’s economy,” she added.
Tech does not dominate the economy of Vance’s home state of Ohio in the same way, giving him more leeway to push back against the industry.
But Wall Street fears his populist defence of blue-collar jobs. A top antitrust lawyer said Vance’s views were more radical than those espoused by Khan and Kanter, which are rooted in curbing market dominance rather than a blanket opposition to M&A.
Vance turned heads earlier this year when he said Khan was “one of the few people in the Biden administration . . . doing a pretty good job”.
“Massive corporate mergers rarely produce their promised benefits but often leave American workers and families behind,” he said in March.
But Mark Meador, partner at Kressin Meador Powers and visiting fellow at the rightwing Heritage Foundation think-tank, said alarm over Vance was testament to his calibre. “If I’m on Wall Street, I’m concerned that one of the brightest and most articulate [voices] for the populist version of conservatism now has a seat at the table in the White House and the president’s ear,” he said.
Still, Vance’s nomination has deepened a generational divide between older conservatives, who largely support a more laissez-faire antitrust approach, and younger Republicans, who are more in line with agendas promoted by Khan and Kanter.
The bipartisan realignment is unnerving corporate America. The business community tends to be “very centrist”, said Jeffrey Sonnenfeld, a professor at the Yale School of Management. “Now . . . the CEOs are wondering ‘what’s happened to the middle?’”
But the drivers behind Democratic progressives and Maga conservatives are different. Khan and Kanter aim to rethink how antitrust statutes are applied to today’s sprawling business structures and complex markets, in a bid to protect consumers and curb corporate power.
Maga Republicans seek to be standard bearers for working-class Americans and use antitrust to further rightwing, hot-button social issues, such as online platforms allegedly censoring conservative voices.
They see antitrust as a “less intrusive” tool to address free speech, with “fewer unintended consequences” compared with “more heavy-handed” government regulation, said Todd Zywicki, a professor at the George Mason University Antonin Scalia Law School.
Some antitrust observers say it is difficult to forecast how Vance would act in government. Given that his former career as a venture capitalist was bankrolled by Silicon Valley heavyweights such as Peter Thiel, they also wonder to what extent he would challenge the tech industry.
Others argue that Vance’s closeness to the VC industry does not mean he supported the megadeals that collapsed under Khan and Kanter. A top banker said VC investors backing Vance were more interested in his support for deregulating cryptocurrencies and artificial intelligence.
Nor is Harris likely to depart entirely from the antitrust policies initiated during the Biden administration. But the expectation among dealmakers as well as executives in the tech world is that she will have a more moderate approach.
Former FTC chair William Kovacic said Harris’s stance might depend on whether she strikes a deal with the Democratic party’s progressive wing.
“There is room for her to move a bit towards the centre on these issues while at the same time saying ‘look at this wonderful programme that our antitrust agencies have developed. Full speed ahead’,” Kovacic said.
Many financiers are still deciding who to support in the upcoming election, but the wave of Wall Street donor support for Harris’s campaign suggests they might stick with the devil they know.
“While I’m reluctant to say this,” a top dealmaker said, “implementing JD Vance’s policies would actually make Wall Street long for the return of Lina Khan.”
Additional reporting by Brooke Masters in New York
