Fearful rumblings of a potential Elizabeth Warren presidency are growing louder by the day on Wall Street, and hedge fund titan Leon Cooperman said this week he’s afraid of a move too far left in the country’s political landscape, which could hurt the economy and stock market.
“They won’t open the stock market if Elizabeth Warren is the next president. You don’t make the poor people rich by making rich people poor.”
Cooperman, speaking at the Delivering Alpha conference, which is being hosted by CNBC and Institutional Investor, said he and Wall Street are concerned about how far some in the Democratic Party are shifting.
“There’s unquestionably a shift to the left in this country,” he said. “They won’t open the stock market if Elizabeth Warren is the next president. You don’t make the poor people rich by making rich people poor. The Democratic Party seems to be leaning toward the left on policies, which is very harmful for the economy. I don’t like the shift to the left.”
Of course, they’ll have to open the market if Warren wins but it will be “a helluva lot lower,” Cooperman said. “It would be a bear market and they go on for a year and go down 25%.”
Warren is a Massachusetts senator who is campaigning as the champion of the working class. She has unleashed an avalanche of policy proposals aimed at all number of things from universal childcare to universal health care to boosting Social Security payments and beyond.
She is an unabashed basher of big banks and big business who plans to pay for all of her pricey policy proposals with a number of wealth taxes to combat wealth inequality.
Warren has proposed not one but two different wealth taxes so far, the first of which would be a 2% tax on assets above $50 million and a 3% tax on assets above $1 billion, in addition to minimum tax on corporate profits. The second wealth tax, announced this week, would levy a 14.8% tax, split between employer and employee, on annual earnings above $250,000 and $400,000 for joint filer. This new wealth tax would go to boosting Social Security checks by about $200 a month.
“Her policies are counterproductive,” Cooperman said. “They’re negative for capitalism and capitalism is what brought America into the position we’re in today.”
The latest polls have former Vice President Joe Biden leading but Warren has surged ahead of Sen. Bernie Sanders, I-Vt., into second place among the huge field of Democratic hopefuls. In fact, FiveThirtyEight says it’s closer to just being a top two, with Biden and Warren, than a top three that also includes Sanders.
Cooperman said the policies of those on the far left, like Warren and Sanders, would be detrimental to the stock market, while Biden would be a better alternative.
“It looks like she’s a credible alternative; I think the stock market will run into some problems,” Cooperman said. “Biden’s OK — he’s a centrist … but I don’t know that he’s acceptable to the progressives.”