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Moderate Disdain For ‘Wall Street Kids’

Sen. Amy Klobuchar
Sen. Amy Klobuchar, D-Minn. Photo by Gage Skidmore.

Sen. Amy Klobuchar is running for president as a moderate Democrat. She is from Minnesota, for gosh sake, where people still bake and eat apple pie, and you just can’t get any more moderate than apple pie in Minnesota.

So when Klobuchar put forth her position on free college education at one of last week’s televised presidential debates, the language she chose really jumped out at me – because it says a lot about what qualifies as moderate in this campaign’s Democratic field.

“My problem with some of the plans is they literally would pay for wealthy kids, for Wall Street kids to go to college,” said the moderate candidate from Minnesota.

I express no opinion here about the idea of providing free college education to anyone or everyone. Likewise, when Klobuchar talks about “wealthy kids,” I grant that she is actually referring to children of wealthy parents, however one chooses to define “wealthy.” You don’t get much time to speak in a televised debate with 10 candidates on the stage. Klobuchar’s comment appears to be shorthand for saying that any program of free higher education should be means-tested, designed to benefit only the children of parents she would not define as wealthy. I express no opinion about that here, either. It certainly qualifies as a moderate position coming from a Democratic presidential candidate this year.

But who, or what, is a “Wall Street kid”? What could a Democrat from Minnesota who favors all manner of apple pie, in moderation, possibly have meant by that remark – especially since she seemed to draw a distinction between “wealthy kids” and “Wall Street kids”?

Wall Street is not in Minnesota. It is in New York City, where I was born and raised before fleeing to Montana for college. (I was seeking clean snow and pie, which are also features of Minnesota, and mountains, which aren’t.) Back then, and still today, about the only kids you might find on Wall Street are school groups on field trips to see the headquarters of global capitalism. There they learn how money that is raised on the debt and equity markets, representing otherwise idle funds from all over the world, is concentrated and then disbursed to start, expand and operate enterprises. Those enterprises employ countless millions of nonwealthy parents and finance, directly and through taxes, the education of their children.

But I’m guessing these visiting schoolchildren are not the Wall Street kids to whom Klobuchar referred. Who, then?

There are virtually no children actually employed on Wall Street, even as unpaid interns. This is partly because everyone on Wall Street gets paid. But it is also because labor contributed to banks and investment houses is not the sort of community service that impresses admissions officers at selective universities, whom the Wall Street kids I conjure in my imagination would want to impress. I suppose there could be a latter-day Alex P. Keaton who tries to gain admission by being a contrarian, or merely acting as his or her capitalist self. But there can’t be many. If nothing else, high school guidance counselors and college admissions consultants know that a commitment to capitalism is not the surest ticket to most selective college campuses these days.

So we’re not talking about interns on Wall Street. Who else could it be?

Maybe it is the child of a flight attendant who crews a Boeing 787 Dreamliner, or of a technician who helps assemble the aircraft in Washington state or South Carolina. A 787 can list for nearly $250 million before typical discounts. Even after those discounts, it is an extremely expensive piece of machinery. Big airlines could never afford to buy them without the capital they raise on Wall Street. Smaller airlines can only fly them because big leasing companies – financed, of course, on Wall Street – supply the capital those upstarts can’t yet raise for themselves, or could only raise at higher cost because of their greater financial risk. Wall Street can fund a risky startup at rates otherwise only available to much bigger, financially stronger companies. This creates more jobs for flight attendants and assembly technicians, and thus more college opportunities for their offspring. Are these the Wall Street kids she meant?

Perhaps she meant the kids of people who work on Wall Street, or in the business of finance generally. Not just the people at the top; since they are presumably wealthy by Klobuchar’s definition, singling out their offspring would have been redundant. There is no time in a televised presidential debate for redundancy. So maybe she meant to apply this label to the kids of people who work in very ordinary jobs in the financial field.

I know a lot of those kids personally, because my company provides financial advice and manages investments. We don’t do our work literally on Wall Street, or even in New York, but Klobuchar may have meant firms like mine regardless of geography. In that case, she applied “Wall Street kids” to the children, ranging from newborns to teenagers, whose parents make their living at our firm. Some of those parents started with us as part-time office assistants when they themselves were in high school and college. Now they are professional managers who make a good, although not extravagant, salary. Most are saving as much as they can to pay for their children’s education. If Klobuchar had her moderate way, would their children be carved out of benefits because they are “Wall Street kids”?

Or maybe – just maybe – Klobuchar meant nothing at all by a gratuitous reference to Wall Street kids, except to signal to her party’s primary voters that even in her Minnesota moderation, she really does not like capital markets. She might do away with them if she could. If she can’t, she can at least disparage those who work in them and seek to deny them the benefits afforded other citizens who work in places like government. Government commandeers capital through taxes and then allocates it via decisions driven by politics, which moderate politicians like Klobuchar understand, rather than by economics, which often they clearly do not.

As I sat down to write this column, I reflected that this sort of bias against the free movement of capital has to be an -ism of some sort. Democrats usually oppose -isms, such as racism or sexism, but then I realized that they don’t uniformly oppose socialism. That is what you espouse when you invent Wall Street kids to attack for no other reason than to please your audience in a televised presidential debate.

It does not sound very moderate to me. Then again, I never really cared for apple pie. I’m a blueberry pie guy. If Klobuchar is telling me socialism is now a moderate position in her party, and that all-purpose disparagement of Wall Street is a prerequisite for running as a Democrat for president, I will take her word for it. She is from Minnesota. She ought to know.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us” and Chapter 4, “The Family Business."

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