Why did Warren blast a hedge fund manager who has criticized Trump?
WASHINGTON — A little over a week ago, a powerful politician read something disagreeable in a news article, logged on to social media, wrote a post blasting a private citizen, and sent it to millions of loyal followers.
The politician wasn’t Donald Trump. It was Elizabeth Warren.
And the private citizen, a wealthy hedge fund manager named Whitney Tilson, is going public with his belief that Warren misunderstood the comments he made to a Bloomberg News reporter that prompted the Facebook denunciation from the liberal Massachusetts senator.
Tilson is, it turns out, an outspoken critic of president-elect Trump and a big fan of Warren’s — and, according to him, one of the few people on Wall Street who agree with much of what she says.
“I wasn’t surprised at all about her views on the financial industry and about Donald Trump. I was shocked that she was using me as an example, given that she had obviously completely misread the article and what my views really are, ’cause my views are the same as hers,” Tilson said in an interview with the Globe.
Warren’s critics see the dust-up with Tilson — which got a very public airing in a prominent New York Times business column Tuesday — as an example of the progressive champion’s occasional tendency toward ideologically driven impulsiveness.
Andrew Ross Sorkin, the Times columnist who featured Tilson’s saga, accused Warren of displaying behavior that resembled that of Trump’s social media outbursts, with what the columnist called her “knee-jerk, fact-free” response to a news story.
“She has a tendency to shoot first and ask questions later,” said Mark Calabria, director of financial regulation studies at the libertarian think tank, Cato Institute, who shares Warren’s skepticism of giving Wall Street insiders plum government jobs but doesn’t see eye to eye with her on most policy issues.
“The attack seems gratuitous. She appears to be equating rich with evil,” said Jeffrey M. Berry, a political scientist at Tufts University. He predicted the hubbub wouldn’t hurt Warren’s image, since she’s beloved by those who love to see folks lash out at Wall Street, “but she could have thrown darts at half the addresses in Greenwich, Conn., and come up with better targets than Mr. Tilson.”
The spark of this fight was a Nov. 30 Bloomberg article on Trump’s emerging choice of Wall Street bigwigs for prominent administration posts, teeing off the news that he had tapped former Goldman Sachs trader Steven Mnuchin to run the Treasury Department. The article prominently featured Tilson, quoting him in the opening paragraphs as saying he can “take glee” at Trump’s supporters being angry that the president-elect is stocking his Cabinet with rich Wall Street types.
“I think Donald Trump conned them,” the article quotes Tilson saying of Trump’s supporters. “I worried that he was going to do crazy things that would blow the system up. So the fact that he’s appointing people from within the system is a good thing.”
The next afternoon, Warren let loose. “Hedge fund managers like Whitney Tilson are thrilled by Donald Trump’s economic team of Wall Street insiders,” she wrote to her more than 2.4 million Facebook followers, quoting from the Bloomberg article. “If Trump gets his way, the next four years are going to be a bonanza for the Whitney Tilsons of the world – at the expense and pain of everyone else.”
Tilson, who runs a hedge fund called Kase Capital, said that Warren’s reading of what he said was so off base that he sort of chuckled when he read it. He had donated $2,500 in 2012 to Warren’s campaign, and more recently he and his wife gave $1,000 in order to see Warren speak at a Hillary Clinton fund-raiser in New York. He also spoke out forcefully against Trump throughout the campaign.
Tilson tried to explain later to Warren’s chief of staff that he meant he was angry at those voters who supported Trump so was taking pleasure that they were getting what he considered their just deserts. And the Bloomberg article clarified further down in the story that Tilson’s praise of Mnuchin and other Cabinet choices was an expression of relief that Trump didn’t name completely unqualified picks for important economic policy posts.
The Bloomberg article also noted Tilson’s support for the Dodd-Frank financial law.
Tilson is also an outspoken education reform advocate who supports charter schools. A group he cofounded, Democrats for Education Reform, spent $500,000 to try to sway Massachusetts voters to support a ballot measure allowing more charter schools, a question Warren opposed.
Tilson’s wife, Susan, who in 1992 was a student in Warren’s first-ever Harvard Law bankruptcy class and considers herself one of Warren’s biggest fans, was not amused at her eruption.
She wrote Warren an e-mail expressing disappointment in the “inaccurate” Facebook post and asked the senator to delete the post and take some time to get to know her husband. “I think you would like him,” she wrote.
In response, Warren’s staff told the Tilsons they would delete the description of Tilson being a billionaire, but otherwise leave it as-is.
A Warren aide told the Globe that while Tilson and the senator agree on some things, she finds it unsettling he would be happy that the American people were “conned” by Trump and his economic promises. The aide also said Warren strongly disagrees with Tilson’s praise of the appointments of Wall Street insiders to key positions.
Certainly being a Democratic donor or expressing support for Dodd-Frank hasn’t shielded others from Warren’s ire, particularly when it comes to her focus on who is getting key economic policy positions.
Most famously, the Massachusetts liberal sunk the nomination of Antonio Weiss, an investment banker who was also described by allies as a progressive Democrat, after President Obama named him as his pick to be a top official at the Treasury Department. After he withdrew his name from consideration for that job, Weiss joined the department as an adviser to the secretary.
Warren was also involved behind the scenes in helping scuttle the candidacy of Larry Summers — another longtime Democrat who professed support for Dodd-Frank, but one with less progressive economic views than Warren — to be Obama’s nominee for Federal Reserve chairman.
When it comes to her signature issues, Warren has been known to use her megaphone to criticize people who are hardly household names. In September 2015, she publicly challenged economist Robert Litan and the highly regarded think tank he was associated with after he gave testimony in a congressional hearing critical of a financial rule she supports.
Warren charged that Litan’s research had been done at the behest of financial interests opposed to the rule who funded his report. Her complaints about the conflict of interest ultimately led Litan to resign his “nonresident” position at the Brookings Institute, even though he considered Warren’s criticism largely unfair. He, too, is on the record supporting many of the financial changes Warren has championed, including the creation of the Consumer Financial Protection Bureau.
Litan declined to comment for this article, noting his past experience.
To be sure, many on the left think Warren’s style is exactly what Democrats need, particularly in the era of Trump.
“Senator Warren is one thousand percent right. Donald Trump is betraying his own voters by appointing Wall Street elites and billionaires who will fight for big corporations at the expense of working families,” said Adam Green, cofounder of the Progressive Change Campaign Committee.
Even Tilson is reluctant to completely criticize Warren’s instincts in attacking him.
“I think being a bit of a bomb-thrower is a good and healthy thing,” said Tilson. “But you have to be clever . . . and pick your battles wisely.”
That includes her efforts to prevent a revolving door between Wall Street and the federal government. He agrees with the goal, generally, but “she’s too dogmatic about it,” Tilson said. “She should have been doing handsprings that someone like Antonio Weiss would be brought into the administration. He and I are about her only two supporters in the financial industry and we’re the two she’s choosing to take shots at.”