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NEW YORK – One of Wall Street’s biggest titans offers President Donald Trump minimal credit for the past year’s surge in stock rates. And he’s not as worried as many investors about a reckoning if the GOP does not deliver tax cuts.
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“An awful lot of it is not linked to Trump,” said Hamilton “Tony” James, president of private equity giant Blackstone Group, within an interview for the latest “POLITICO Funds” podcast. “We’ve possessed nine years of run-up and he’s been president during one of these.”
While stock rates have built in some expectation for corporate taxes cuts, James said he doesn’t think Wall Street will tank if the Republican work to overhaul taxes falls aside – a warning offered even by Trump’s unique Treasury secretary.
“If we don’t obtain it, I believe it’s a modest bad for the marketplace,” the Blackstone executive said. “But I don’t think it’s an enormous driver for the marketplace. I don’t think the market will probably tank by any means.”
James took sharp issue with some provisions found in the GOP tax expenses, especially those that might hit the private-equity industry including changes to the taxation of carried curiosity and the deductibility of curiosity on corporate debt.
He’s especially important of the debt-funding provisions, arguing they would not merely hurt private equity, but also plenty of sectors that for a variety of reasons rely upon borrowed money to fund operations.
“I think that this is very dangerous for a few reasons,” James said. “We are the only economy in the world that has such a strict limit on curiosity deduction. U.S. companies will go borrow abroad, build a plant abroad and hire persons abroad.”
James, a Democrat, was once rumored seeing that a probable Treasury secretary in a Hillary Clinton administration. He explained Wall Street isn’t the reason Clinton shed the presidential race last November, despite the attacks for her highly paid speeches to Goldman Sachs and other banks.
James said it had been Clinton’s failure to connect with voters in the middle of the country that price her the White Residence. “I don’t think Hillary lost as a result of Wall Road ties,” he said. “I just think she didn’t resonate at all with the guts part of the country and I don’t think she particularly tried to. The united states just desperately wanted modification, radical modification, and she represented the continuity applicant and that was that.”
James, who has a net worth someplace north of $1 billion, said he adores Joe Biden, who is on tour for a fresh book this week, but doesn’t think the past vice president is the Democrats’ best bet in 2020.
“Joe is fantastic and I believe he’s such a warm, likable individual,” James said. “I’m concerned that his time has passed. Much just as I like him, he’ll be 78 years older at the time the next president is certainly inaugurated. I just feel like the country is going to choose a fresh face and new ideas.”