Anxious US Financial Sector and Stock Market Amid Rapid Rise of Socialist Sanders

Sanders Wins New Hampshire Primary
Blankfein, Former Goldman Sachs Chairman, Says "Sanders Will Ruin Economy"
Stock Market Crash Investment Reports Circulate
Bloomberg News Calls Wall Street View "Narrow-Minded"

[Asia Economy New York=Correspondent Baek Jong-min] As Senator Bernie Sanders won the Democratic New Hampshire primary, controversy is growing in the U.S. financial sector over the impact of the rise of a socialist. Although the U.S. stock market surged sharply on the 12th (local time), the day after Sanders' victory, reflecting no market concerns, the financial sector's view of Sanders' political stance remains cold.

Lloyd Blankfein, former chairman and CEO of Goldman Sachs, tweeted about the New Hampshire primary results, stating, "If Senator Sanders becomes the candidate, he will polarize as much as President Donald Trump, ruin the economy, and neglect the military."

Blankfein also said, "If the Democrats choose Senator Sanders as their candidate, Russia will have to reconsider who to work with to ruin the U.S. If I were Russia, I would go with Senator Sanders this time."

This is not the first time he has sharply criticized a progressive Democratic presidential candidate. Last year, when progressive Senator Elizabeth Warren advocated for a wealth tax and featured billionaires like himself from Wall Street in her campaign ads, Blankfein expressed dissatisfaction, saying, "She is not my candidate, but there is nativism in Warren's genes." Senator Warren, known as a Wall Street critic advocating for stronger financial regulations, represents the Democratic progressive camp alongside Sanders. Blankfein supported former Secretary of State Hillary Clinton in the 2016 presidential election.

The scenario of Sanders becoming the Democratic presidential candidate or winning the presidency is currently one of the hottest issues in the U.S. stock market. Investment reports predicting a market crash the moment Sanders takes office are circulating. This is expected to be the exact opposite of the market surge that followed the election of pro-business President Trump.

Wall Street's opposition to Sanders is also evident in campaign donations. Compared to moderate Democratic presidential candidates like former South Bend Mayor Pete Buttigieg and Senator Amy Klobuchar, Sanders receives significantly less funding from Wall Street. Sanders has used this to attack Buttigieg, accusing him of receiving donations from the wealthy.

The New York Times (NYT) described Blankfein's remarks as "reflecting Wall Street's concerns" and reported that many perceived his comments as revealing Wall Street's anxiety about democratic socialists. Sanders' campaign manager Faiz Shakir also said, "It feels like watching Wall Street figures panic."

Some argue that Wall Street's view of Sanders is excessively narrow. Bloomberg News introduced a column titled "Sanders Could Be Wall Street's Friend" on the same day.

The column emphasized that claims of stock price declines if Sanders is elected lack evidence. Although stock prices rose during Trump's administration, this was observed before the tax cuts and was mainly due to deregulation focused on the energy sector. Sanders has pledged to reverse the $1.5 trillion tax cuts implemented by Trump at the end of 2017, raising the corporate tax rate from 21% back to 35%.

The column diagnosed that the expansion of the U.S. government's fiscal deficit is one of the factors behind the stock market's strength and predicted that the deficit is likely to continue increasing even if Sanders takes office.

Sanders aims to introduce "Medicare for All," a government-run universal health insurance system, if elected. Abolishing private health insurance and implementing universal healthcare will require massive funding, inevitably expanding the fiscal deficit. Government spending will also have to increase to implement free college education. Since raising taxes on the wealthy alone is insufficient to fund these policies, the government's burden will inevitably grow, which could ultimately serve as a driving force for stock market growth, suggesting that excessive caution is unnecessary.

This content was produced with the assistance of AI translation services.