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Biden made campaign pledges that affected key economic appointments.
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If Harris becomes president, she will have much more freedom and industry leaders have high expectations.
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Numerous business and technology figures told BI that the appointments are critical to the future of U.S. manufacturing.
When President Joe Biden entered the White House in January 2021, he was hampered not only by the pandemic but also by a promise he had made to a former challenger: Sen. Elizabeth Warren of Massachusetts.
As she navigated the political jungle of a crowded Democratic primary, Biden assured Warren she would have significant influence over economic oversight nominations.
Warren’s favored appointments — Lina Khan and Gary Gensler, chairmen of the Federal Trade Commission and the Securities and Exchange Commission, respectively — have drawn praise from many economic progressives and the ire of many business leaders.
But now that Vice President Kamala Harris is running for president in Biden’s place after he withdrew, the future of Khan and Gensler as chief regulators is in question.
Biden made a key commitment to Warren when he ran for president
“One of [Warren’s] “My preferences was, ‘I want Lina Khan to run the FTC,'” William Kovacic, former FTC chairman and current law professor at George Washington University, previously told Business Insider. “Biden has delivered on that promise. But that was Biden’s promise. That’s not Harris’ promise.”
Adam Kovacevich, a Democratic lobbyist and CEO of the progressive tech industry coalition Chamber of Progress, doesn’t think Biden was particularly interested in regulatory economic issues.
“I think giving people like Elizabeth Warren some choices kept Warren off his back on other issues,” Kovacevich said. “Flash forward to today: Kamala Harris owes Elizabeth Warren nothing.”
During the 2020 cycle, several media outlets reported that Warren is particularly attuned to the power of economic regulators. A former Democratic aide told Politico that “Warren will be the most influential voice in the financial policy debate under the new administration,” and the president of the Consumers Bank Association said she “has virtually handpicked the financial and other regulatory nominations that are closest to her heart.”
But business and technology leaders who shuddered at the current appointments see Harris as an opportunity.
With deep ties to California, Harris is casting herself as a pro-business candidate who understands the tech industry far better than her current boss. And she’s drawing support from industry executives across the country — a group of powerful venture capitalists has pledged to vote for her, and nearly 100 business leaders recently endorsed her in a joint letter.
Her supporters at the top of the corporate and technology sectors are focused on appointments, with many arguing that leaders need to strike an effective balance between regulation and innovation.
In particular, they want appointments that will set clear crypto guidelines and deviate from the current regulatory approach Warren has advocated.
Still, Box CEO Aaron Levie said there’s no consensus in the tech world on antitrust doctrine because companies big and small have different priorities. There are many figures in the Biden administration, like Arati Prabhakar of the Office of Science and Technology Policy, who are thoughtful tech leaders but aren’t discussed much, he said.
Harris could take a different path
Yet, overall, founders and business leaders seem dissatisfied.
Democratic donors on Wall Street are quietly encouraging Harris to oust Khan and Gensler, Bloomberg reported.
Chris Larsen, the billionaire founder of blockchain payments company Ripple who is among the executives backing Harris, told Business Insider he wants her to make other appointments if she wins.
Larsen said he wants regulators who are “not pre-selected by the Warren camp and who can provide both consumer protection and ensure that our national champions dominate their industries.”
Christian Catalini, founder of the MIT Cryptoeconomics Lab, said Gensler was “reluctant to engage in constructive dialogue with startups seeking regulatory clarity.”
He thinks tech entrepreneurs are most concerned about who Harris would pick for the SEC.
Recently, billionaire investor and Dallas Mavericks owner Mark Cuban applied for a job with the SEC.
Cuban is in close contact with Harris’ team and said she will likely surround herself with more people from the private sector than Biden.
Levie also said that collaboration with the private sector is “absolutely critical” and hopes Harris will invite more industry players to join her administration.
“The way they’re already engaging with business leaders is a compelling indication of what things could look like in the future,” Levie told Business Insider.
However, the vice president has been relatively quiet about her views on competition law enforcement and who she would appoint.
Khan’s term as FTC chair expires in September, and she has indicated she is open to staying on. Gensler’s term runs through June 2026; in February, he said he would “absolutely” stay on if Biden, then the nominee, wins a second term.
Kovacic previously told Business Insider that Harris’ relationship with economic progressives like Warren remains unclear.
“One factor that has to be assessed is, what is the nature of her relationship with this wing of the Democratic Party? How much loyalty does she feel to them? To what extent does she believe that she has to cater to their tastes in order to maintain a harmonious political relationship? But she has a little bit more latitude than Biden had,” he said.
Kovacevich, who calls himself a “pro-business, pro-Harris Democrat,” doesn’t think Harris needs to convince Warren’s voters.
He suspects the vice president will “reset” the current environment and return to the Obama era, which was more favorable to businesses.
“I find it remarkable that she has not made attacks on corporate power a priority in her campaign rhetoric. I think she is right to see that that is not a motivator for most voters,” he said.
The vice president’s exact plans remain unclear, as there are only 50 days left until the election.
The relationship between Harris and Warren’s philosophical counterparts has been strained at times. Last March, Warren gave a tepid response when a radio host asked whether Biden should keep Harris as his vice president.
“I really want to go with what makes Biden comfortable on his team,” she said at the time. The senator quickly issued a statement saying she supports the Biden-Harris 2024 ticket.
She reportedly called Harris twice after the incident, but received no response.
Kovacic suspects that economic progressives don’t fully trust Harris, given her ties to the business community.
“It’s not that they think she’s just going to be an agent of Big Tech,” he previously told Business Insider. “It’s a concern that she’s going to be too sympathetic to their interests, that she’s not going to be as aggressive.” He expects Harris to focus on mergers at the center but maintain the Biden administration’s approach to anti-monopolization and profiteering.
An SEC spokesperson declined to comment, and representatives for Harris and Warren did not respond to Business Insider’s request.
Douglas Farrar, FTC spokesman, emphasized Khan’s efforts to reduce costs and said “much work remains to be done to realize the benefits of fair competition for American consumers and businesses.”
Should Harris win the election, the issue of appointments will be a big one. Leadership plays a major role in determining how successful American industries and companies are, Levie said.
“In the next four years, we’re going to be dealing with some really important policy issues that are going to affect the next few decades of innovation,” he told Business Insider. “And you want very smart, thoughtful, very competent, experienced people in a stable environment who can help determine where we go with AI, with new energy sources, with advanced manufacturing, biotechnology.”
Unhampered by campaign promises but caught between opposing factions of her party, Harris could usher in a new era of regulation. But since regulatory appointments don’t make for good political soundbites, it’s likely we won’t know her plans unless she wins in November.
Read the original article on Business Insider
