The billionaire CEO of BlackRock, the world’s largest asset manager, has said it “really doesn’t matter” who wins the US presidential election, because both Donald Trump and Kamala Harris will be good for Wall Street.
“I’m tired of hearing this is the biggest election in your lifetime. The reality is over time it doesn’t matter”, said BlackRock chief Larry Fink at an October 21 conference hosted by the Securities Industry and Financial Markets Association, according to the Financial Times.
“It really doesn’t matter”, Fink reiterated. He revealed that, at BlackRock, “we work with both administrations and are having conversations with both candidates”.
BlackRock has $11.5 trillion assets under management, making it the biggest investment company on Earth.
BlackRock has enjoyed close links to the US government. Veterans of the asset manager have held high-level roles in the Joe Biden administration’s Treasury. A BlackRock executive has likewise served as a prominent economic advisor for Kamala Harris.
Trump’s Treasury, on the other hand, was run by Goldman Sachs’ former chief information officer, Steven Mnuchin, who made a fortune as a hedge fund manager.
Trump and Harris have competed to see who could get more support from Wall Street.
As president, Trump significantly cut taxes on the rich, leading billionaires to pay less than the working class. The richest 400 US families paid an average effective tax rate of 23% in 2018, which was lower than the 24.2% average paid by the bottom 50% of households.
Trump has pledged to further reduce taxes on the rich. An analysis of Trump’s tax proposals by the Institute on Taxation and Economic Policy showed that they would be extremely regressive: the richest 5% of Americans would pay at least 1.2% less, whereas the bottom 95% of people will have to pay more taxes, including a 4.8% increase for the poorest 20% of the country.
One of the top financiers of Trump’s presidential campaigns, in 2024 and 2020, is the billionaire CEO of Blackstone, Stephen Schwarzman, who in 2022 was the highest-paid chief executive in the US financial services industry.
Schwarzman is a Republican Party mega-donor, and was Wall Street’s number one funder of political campaigns in the 2020 election cycle.
Blackstone is the world’s largest alternative asset manager, and the biggest commercial landlord on Earth. The investment company owns and manages more than 300,000 rental housing units in the United States.
Blackstone has evicted many homeowners in numerous states, contributing to a growing crisis of homelessness, which increased by 12% in 2023.
The Guardian succinctly encapsulated just how powerful Blackstone has become:
Blackstone is the largest commercial landlord in history. Over the past two decades, it has quietly taken control of apartment blocks, care homes, student housing, railway arches, film studios, offices, hotels, logistics warehouses and datacentres. Blackstone doesn’t just own real estate, it owns everything – or that’s how it can feel when you start to examine its bewildering array of assets. If you wear Spanx, have ever matched with someone on Bumble, stayed in a Hilton hotel or a CentreParcs resort, visited Legoland, Madame Tussauds, the London Dungeon or an elderly relative at a Southern Cross care home, you have encountered a company that forms, or has recently formed, part of the Blackstone empire.
US investors buying up residential real estate has fueled an explosion in housing prices, turning family homes into a speculative asset rather than a place to live.
The cost of housing in the United States has grown significantly faster than wages in the past decade. The housing bubble that burst in 2008 was simply reinflated after 2012, and is much larger today.
Approximately 45% of US households spend more than 30% of family income on rent, over 30% of households spend more than 40% of family income on rent, and nearly one-quarter of households spend more than 50% of family income on rent, according to the 2024 Economic Report of the President.
Although BlackRock and Blackstone are different companies, they have overlapping histories, and BlackRock owns 6.56% of Blackstone, making it the second-largest shareholder.
Blackstone’s biggest shareholder is Vanguard, which has a 9.05% stake. The fourth-largest is State Street, which owns 4.12%.
BlackRock, Vanguard, and State Street are popularly known as the “Big Three” US index fund mangers.
A 2017 academic paper found that the Big Three were the largest owners of 438 of corporations in the S&P 500, an index that consists of the 500 biggest companies listed on US stock exchanges. These 438 firms made up 88% of the total of S&P 500 companies, representing 82% of the index’s market capitalization at the time.
Big Three (BlackRock, Vanguard, State Street) ownership of US companies, as of 2017
When he was campaigning for president in 2019, Joe Biden promised wealthy donors in Manhattan that he would not “demonize” the rich, and that, if he won, “no one’s standard of living will change, nothing would fundamentally change”.
The US president has consistently kept this promise to serve the rich.
Just 10% of people in the United States own 93% of stocks, whereas the bottom 50% of the country holds just 1%, as of 2023. This is the highest level in recorded history.
The wealthiest 50% of Americans receive 95% of capital income. The top 10% alone gets 60% of capital income.
An influential 2014 study by scholars at Princeton and Northwestern Universities empirically showed that the United States is an oligarchy, not a democracy. The academics wrote (emphasis added):
Multivariate analysis indicates that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence. The results provide substantial support for theories of Economic-Elite Domination and for theories of Biased Pluralism, but not for theories of Majoritarian Electoral Democracy or Majoritarian Pluralism.
The 2024 election is the second-most expensive in the history of the United States, with approximately $16 billion spent. This enormous sum was only surpassed in 2020, when $18.3 was spent on the election.
In the past decade, the amount of money spent on US elections has roughly doubled, from $8.5 billion in 2016.
Why do wealthy donors spend so much on US elections? Because they have a lot of success investing in politicians.
Over the past two decades, on average, the candidates who have the most funding win the elections for the House of Representatives over 90% of the time and the races for the Senate over 80% of the time.
