Warren's private equity ‘vampires’ plan draws fire from prominent business group
Massachusetts Democratic Sen. Elizabeth Warren, who is running for president in 2020, unveiled a plan on Thursday to rein in the private equity industry – which she referred to as consisting of “vampires” – but the business community that it is designed to protect does not appear to be on board.
The Chamber of Commerce on Thursday issued a statement that Warren’s plan would limit job growth and potentially hurt the U.S. economy.
“Senator Elizabeth Warren’s financial service plan to limit private equity firms is another brick in the wall to stop growth, job creation and creating return for retirement,” U.S. Chamber of Commerce executive vice president of the Center for Capital Markets Competitiveness, Tom Quaadman, said in a statement. “What the U.S. needs are policies to promote a growing dynamic economy, and Senator Warren’s plan fails to meet that test.”
The Chamber of Commerce represents 3 million businesses of all different sizes, across all sectors and regions.
On Thursday, Warren unveiled a plan to rein in Wall Street, calling for a reinstatement of a modern-day Glass-Steagall Act – which required the separation of investment and commercial bank activities.
The proposal would also require private equity firms to take up more responsibilities – like debt-related obligations and some legal liability – for companies they buy. That would mean firms would only make money if their companies do well.
In a blog post, Warren referred to the private equity industry as “the poster child for financial firms that suck value out of the economy.”
On Twitter, Warren said the Stop Wall Street Looting Act would “end the worst abuses of private equity that kill jobs, hurt workers [and] drain our economy.”
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Warren is known as a staunch advocate against what she perceives as greed on Wall Street. Already, throughout her relatively nascent campaign, she unveiled a multitude of proposals that take aim at some of the country’s largest companies – including Amazon and Google. She has positioned herself as a champion of working-class Americans.
Warren's latest proposal comes about two weeks before the next round of Democratic debates.