In the first part of this series, we looked, in considerable detail, at nationalism and populism, among other topics.
This installment will be shorter, because it concerns just a single topic: the “Billionaires’ Consensus,” and Donald Trump’s departure from it.
By Billionaires’ Consensus, we mean the common ideological ground that plutocrats, for all their partisan differences, manage to share with each other.
We can immediately observe that America’s billionaires—there are an estimated 536 of them—are divided on many issues. Some are Republicans, some are Democrats. Some are conservatives, some are liberals. Some are for gun rights, some are for gay rights. Some are Greens, some are energy moguls; the Rockefellers, who made their money from Standard Oil more than a century ago, are still prominent in billionaire-dom—although now, of course, some of them are Greens.
Yet for all their diversity, we can still see some underlying commonalities that unite virtually all of them. That is, they can each live a separate luxe life, yet still come together to cohabit a surprisingly large amount of shared policy space.
In fact, as we survey this Billionaires’ Consensus, we can identify a 10-point, or 10-plank, agenda:
Plank One: Billionaires don’t like to pay taxes. As Breitbart’s Chriss Street has observed, the 400 richest Americans are paying a third less in tax than they were 30 years ago:
The average tax rate paid in 2012 by what is referred to as the “Fortunate 400” was 17 percent, despite the statutory top marginal income tax rate of 39.6 percent. This compares to an average income tax rate of 27 percent under President Reagan; 26 percent under George H.W. Bush; 25 percent under Bill Clinton; and 20 percent under George W. Bush.
We might note that this fall-off in the taxation of fatcats, from 27 percent in the Reagan era to 17 percent now, has occurred despite the fact that Democrats have controlled the White House for 16 of the last 24 years.
To be sure, Democrats say they are for higher taxes on the rich. Indeed, Presidents Clinton and Obama explicitly raised income tax rates, as did Republican Bush 41. Yet as we can see, supposed “soak the rich” policies have been having the reverse result.
And it’s not hard to know the reasons why: Not only do the rich have access to the best lawyers and accountants, but even more, since the end of the Cold War, they have also had access to the whole wide world—and a dollar moved beyond US borders is a dollar lost to the IRS.
US corporations, for example, have stashed away some $2.1 trillion overseas. And private investors have moved even more cash abroad; according to one left-leaning group, total American capital placed overseas is $11.5 trillion, with that number growing by nearly a trillion dollars every year.
But wait just a second: Don’t some billionaires actually support their taxes going up? What about Warren Buffett, who, according to Forbes magazine’s real-time estimate, is worth $59.9 billion? He declares that it’s morally wrong for him to be paying a lower tax rate than his secretary, who is paid in the mere six figures.
Yes, Buffett, a stalwart Democrat, wrote an op-ed in The New York Times on August 14, 2011, entitled, “Stop Coddling the Super-Rich.” In it he revealed,
Last year my federal tax bill—the income tax I paid, as well as payroll taxes paid by me and on my behalf—was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income—and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.
We might pause at some of those numbers: Buffett paying 17.4 percent of his income in taxes puts him right in line with the findings noted by Chriss Street above. And yes, we can believe that his tax rate is roughly half that of his office employees; in today’s tax system, the curve of the rate of effective taxation rises progressively with income—and then plummets, regressively, for the very rich. (As an aside, we might note that Buffett does not seem to have volunteered any extra payment to Uncle Sam as guilt money.)
Yet interestingly, even as Buffett basks in liberal praise for proposing a tax increase on himself, the Omaha-based tycoon has found a do-it-yourself approach to cutting his taxes: Buffett was a big player in the corporate tax inversion that sent Burger King from Miami to Canada. So now that the tax-inversion deal is done, and Burger King as a corporate entity is gone from the US, some of the money that isn’t going anymore to the US Treasury will wind up instead in Buffett’s pocket. So let’s not get carried away with the idea that Buffett wants to see his taxes raised.
There may be some billionaire, somewhere in the US, who truly, un-hypocritically, wants to raise his own taxes, but the argument here is that there’s a Billionaires’ Consensus, not a billionaires’ unanimity.
Plank Two: Billionaires like globalization. If the rich can outsource their tax obligations, why not outsource everything else?
In his 1992 novel, Snow Crash, the science-fiction writer Neal Stephenson described the impact of globalization on jobs and incomes on America:
Once we’ve brain-drained all our technology into other countries, once things have evened out, they’re making cars in Bolivia and microwave ovens in Tadzhikistan and selling them here — once our edge in natural resources has been made irrelevant by giant Hong Kong ships and dirigibles that can ship North Dakota all the way to New Zealand for a nickel—once the invisible hand has taken all those historical inequities and smeared them out into a broad global layer of what a Pakistani brickmaker would consider to be prosperity…
Then, he concludes, we get to the Snow Crash scenario, where Americans aspire to get jobs in pizza delivery.
In fact, the real incomes of Americans peaked in 1974, and have been drifting down, or bumping along, ever since that era. And during those same four decades, the real incomes of the richest 1 percent of Americans have more than doubled.
So from the Billionaires’ point of view, life is good—and so let’s keep a good thing going. And so, after all the recent trade deals—NAFTA, WTO, CAFTA, and AGOA, and the list goes on—why not the TPP? Why not keep globalization beat going? Not every billionaire today is in favor of the Trans-Pacific Partnership, for example, but most are. If the TPP doesn’t pass, their stock portfolios might sag.
Plank Three: Immigration. From the Billionaires’ Consensus point of view, if money and goods can flow freely around the world, why not people? The average American might look at unlimited immigration as a threat to jobs and a source of crime, but to the Consensus, immigration is a source of docile nannies, outdoors-oriented groundskeepers, skilled chefs, and attractive prostitutes.
Plank Four: Crony capitalism. Crony capitalism is, of course, a familiar concept to Breitbart readers, but we must note that there other flavors of Cronyism, too. For instance, there’s Crony Environmentalism. And so once again, we can cite Warren Buffett, who has met many times with President Obama. And it’s a fact that Buffett has been further enriched by Obama’s decision to kill the Keystone Pipeline. Why? Because Buffett owns the Burlington Northern Santa Fe railroad, which carries the oil south from Canada. If Keystone is off the table, Canadian oil must continue to come to the US by rail—Buffett’s rail.
Here we might note that shipping oil by rail is dangerous—to people. However, it’s a safe bet that no billionaire in American lives anywhere near a freight rail line. (And as an aside, we can add that Green groups, mostly funded by the rich, seem far more concerned about the fate of the whooping crane or the pallid sturgeon than about the safety of their fellow American humans.)
Plank Five: Celebrating the “new economy.” Yes, billionaires seem to have perfected the dark arts of Cronyism, and yet there are always new tricks to apply. And the so-called “New Economy”—that supposedly radiant future conjured up by DC think-tanks and other hired guns—affords many tricks.
Back in 2001, Daniel Pink, a former White House speechwriter for Vice President Al Gore, wrote a deeply influential book: Free Agent Nation: The Future of Working for Yourself. Pink’s thesis was that workers were increasingly opting to be free-lancers and contractors, and that this was good thing, because workers-turned-free-agents enjoy more freedom and flexibility.
To be sure, free-agentry works for some—especially if you’re a billionaire; then you have all the freedom and flexibility that you could want. But for most Americans, odes to freedom and flexibility are less valuable than a steady paycheck and benefits. Phrases such as “creative disruption” and “disruptive innovation” are not necessarily what a guy trying to raise a family and pay a mortgage wants to hear. And if he does hear those phrases, he wants to know that his interests, too, will be protected in the disruption.
On the other hand, from the point of view of the Billionaires’ Consensus, the idea of the workforce being fragmented is deeply appealing: After all, a fragmented workforce is a lower-paid workforce, and what’s not to like about that? Doesn’t every empire believe in divide-and-conquer?
A case in point is Uber, the transportation company. As The New York Times noted on Sunday, Uber drivers have taken a more than 60 percent pay cut in the last two years:
Two years ago, drivers for Uber and Lyft could hope to make as much as $25 an hour, according to interviews with more than a dozen Los Angeles-based drivers. Today, with a glut of Uber and Lyft cars on the road, those drivers say that their average fares have dropped from $2.40 per mile in December 2013 to $0.90 per mile for most trips after Uber’s most recent rate reduction this month. (emphasis added)
A 62.5 percent pay cut—imagine how jealous other bosses must be!
It’s no wonder, then, that the founder and CEO of Uber, Travis Kalanick, is worth $6 billion. He is undeniably whip-smart, and Uber is undoubtedly an improvement over traditional taxi companies, many of them now in, or near, bankruptcy. With the better Uber business model, both driver and passenger are presumably safer, because of credit cards and GPS tracking of the entire ride.
Yet as we think about Kalanick, we might also recollect Jack Welch, the former CEO of General Electric, whom we took note of in the first installment. Welch, too, was happy to jack up his own wealth at the expense of his workers.
So once again, we can ask: What would America be like today if CEOs cared about their people. What if Kalanick had done what Welch did not do—that is, think sincerely about the well-being of his workers? If he had, Uber would still be a brilliant company, but its drivers wouldn’t be getting a pay cut. And Kalanick himself would still be doing fine, albeit poking along on maybe just $3 billion.
Uber continues to expand, even as it is under constant attack (with apologies to the comedian Jeff Foxworthy: If you didn’t know that Uber was offering a helicopter service to the Sundance Film Festival, you might not be a billionaire). And because the company is in so many legal fights, it was wise to hire… a top Democratic political operative. David Plouffe, of course, was Barack Obama’s campaign manager in 2012, and now he’s still running campaigns, only for Uber.
The corporate behavior of Uber isn’t so different from the corporate behavior of GE—or, going back a ways, the corporate behavior of Standard Oil. Thus we can see that the “new economy” isn’t so different from today’s economy; it’s still the same old story: the Crony story. Yes, Uber is in plenty of legal fights, but thanks to the Plouffe hire, it has nothing to worry about from the Obama administration. (And here’s a related question: How long will it be before the 44th President, a champion of key causes such as the TPP, fully joins the Billionaires’ Consensus?)
But don’t worry, Republicans aren’t left out of the Consensus—provided, of course, that they play ball. Yes, Uber’s reach is completely bipartisan: Sen. Marco Rubio actually wrote a piece for—where else?—National Review, headlined, “An America Safe for Uber.” No doubt those Uber drivers, the ones who got the 62.5 percent pay cut, would agree; thanks to astute Cronyism, and propagandists such as Pink and Rubio, Uber is perfectly safe.
Plank Six: Environmental elitism.
The affinity of limousine liberals for Green causes is well known. In 2014, for example, a single San Franciso-based billionaire, Tom Steyer, spent more than $74 million to help Democratic candidates. Steyer’s money is a big reason why Democratic pols talk about “climate change” all the time, even though the issue is routinely at the bottom of voter concerns.
But what’s less known is that limousine conservatives quietly share many of the liberals’ preoccupations. For example, there’s Hank Paulson, President George W. Bush’s treasury secretary in 2006, having resigned from—where else?—Goldman Sachs. Interestingly, some hold him partially responsible for the subsequent financial crisis, and yet after the 2008 crash, Paulson’s old company was one of the big winners in the TARP bailout that Paulson orchestrated: Goldman collected $12.9 billion from Uncle Sam in 2008.
Since leaving office in 2009, Paulson has become much more deeply involved in environmental efforts. It’s almost enough to make one think he is trying to change the subject from his time as a “public servant.” His eco-pursuits include The Peregrine Fund and The Nature Conservancy. And while neither group is as left-wing as, say, Greenpeace, it’s clear that the Conservancy, for example, has pretty much the standard Green view of fracking, and energy in general.
So don’t worry: If two billionaires from different parties bump into each other, there will be few awkward silences. At a minimum, they can make small-talk on the value of NIMBY policies around their personal estates. Yes, the elite’s determination not to let the riffraff spoil their vistas of mountains, lakes, or beaches is widely held—and completely bipartisan.
Plank Seven: Earned entitlement cuts. If the Billionaire Consensus declares that billionaires ought to have more money, it also declares that ordinary Americans should have less.
Pete Peterson, who made his money at Lehman Brothers and then Black Rock, declared in 2010 that he would put a billion dollars of his own money into the cause of federal deficit reduction. The Daily Beast spoke more truth than it might have realized when it labeled him as “the George Soros of budget hawks.”
Peterson set up a constellation of front groups, including Committee for a Responsible Federal Budget, Fix the Debt, and even a youth front-group, The Can Kicks Back. Early in this decade, these astroturf outfits had real mojo—at least inside the Beltway. This author was an eyewitness to a couple of occasions in which DC hungry political consultants and hired ghostwriter guns attempted to sell themselves to those consultants who had already been hired by Peterson.
Peterson is just one billionaire, of course, and yet with the help of like-minded nine-figure guys, he has had great influence: The bipartisan deficit-reduction commission of a few years ago—known in Washington as “Simpson-Bowles”— was a tribute to Peterson’s lobbying muscle.
We might note that the Simpson-Bowles effort has been a bust. The American people are remarkably hostile to entitlement cuts, especially cuts to earned entitlements, such as Social Security, Medicare, and VA benefits. A Washington Post-Bloomberg News poll, for example, showed that voters opposed Social Security cuts by a more than a 6:1 margin. So the Billionaires’ Consensus doesn’t always get its way. Still, Peterson is remarkably rich, and he has many allies atop the commanding heights of the economy.
Plank Eight: Free Love, or at least, deregulated love. Billionaires naturally don’t like to throw stones at each other’s glass houses. Stern sexual morality has been in decline across the whole of society for decades, but glass houses tend to get glassier as one moves up the income ladder.
And because the billionaires don’t want to hurt each other, and tend to frown on judgmentalism of any kind, the political class and pundit classes, too, have tended to stay away from any judgment on any sort of behavior. And the biggest beneficiary of that trickle-down avert-your-gaze attitude has been Bill Clinton, the sexual predator-turned-Billionaire Consensus courtier.
Plank Nine: More US “engagement” with the world. It’s easy to see how all the globalism of the Consensus would get fatcats thinking more about international issues, as opposed to the more “humdrum” domestic issues.
Some billionaires are hawks, others are doves, and others are in-between. But for no other reason than that they might own a house in that part of the world, or be planning a safari there, the rich tend always to be thinking that the US should “do more” in the world, be it opposing Al Qaeda or opposing malaria. So while the issues might vary, One-Percenters, on both the left and the right, find ways to work together.
Thus it’s not surprising that DC politicians, too, tend to be considerably more internationalist than their own voters. As James Carville might say today, it’s the donors, stupid. That is, in DC, money talks the loudest.
Case in point: Operation Iraqi Freedom. In the words of Scott McConnell, writing for The American Conservative, “The blunt truth is that the most important ‘conservative’ project in recent memory was the Iraq war.” If so, it’s easier to see why Republicans have lavished so much attention on the Middle East, at the expense of Middle America.
Yet we must recall that Iraq was bipartisan: It was also a liberal war, supported in the US Senate by Hillary Clinton, Joe Biden, John Kerry, and many others. John Kerry, we might add, is himself married to a billionaire.
Even today, big donors of both parties—such as Sheldon Adelson on the right, and Haim Saban on the left—help keep the political class fat, happy, and fulsomely supportive of internationalist policies.
Plank Ten:Always, two tiers—one for them, one for us. Jeff Skoll, a co-founder of eBay, is as rich as one could want. He funds left-wing movies, thereby empowering himself to hobnob with the likes of George Clooney. So he’s with The People, but such folks have never been invited actually to join him at his house.
So that’s the Billionaires’ Consensus: The ten planks on which most of them stand. So a Republican such as Hank Paulson might find himself having a perfectly warm discussion with a Democrat such as Tom Steyer. And if, say, Paulson and Steyer were ever to bump into each other at Lincoln Center, or Jackson Hole, or the Davos Conference, it’s a safe bet that they find they have many areas of agreement.
Okay, so here’s a question: If there’s a Billionaires’ Consensus, is there also a Middle-Class Consensus? Sure there is. And we could cite such middle-class verities as having a job, getting married, having kids, and saving for retirement—these are Middle-Class Consensus items.
But here’s the rub: The Middle-Class Consensus isn’t much of a priority with politicians.
That’s not just my opinion, that’s also solid political science. Martin Gilens, of Princeton University and Benjamin I. Page, of Northwestern have found that in DC policy-making, the views of ordinary citizens don’t really matter. They studied 1,779 issues over a 20-year period and found that the preferences of the rich were vital to political outcomes—and that the preferences of the middle class were mostly irrelevant. As Gilens and Page put it,
In the United States, our findings indicate, the majority does not rule. Majorities of the American public actually have little influence over the policies our government adopts.
The headline on one news report of these findings: “The US is an oligarchy, not a democracy.”
All right, that’s a perhaps bleak assessment of American politics today. But it doesn’t have to be the last word.
One billionaire was watching as his fellow fatcats divvied up the country—until there wasn’t much left to be divvied. That lone billionaire could see that it wasn’t ordinary people who were demanding, for example, that we topple Hafez al-Assad of Syria. Instead, ordinary folks were demanding a wall across the US-Mexican border—and their own elected officials were ignoring them.
That billionaire, of course, is Donald Trump.
Trump could see something that the Consensus couldn’t see—or couldn’t care less about. That is, the middle class has been completely left out of the Billionaires’ Consensus. There are billionaires who love #BlackLivesMatter, and there are billionaires who hate #BlackLivesMatter. But there are no billionaires tweeting out #MiddleAmericaMatters.
And so Trump made his move. As he said to Breitbart News Sunday in May,
The people that like me best are poor people and middle-income people. The rich people don’t like me. I get along much better with the middle class. I would save the middle class.
From then on, all Republican candidates were on notice: Get the middle class into the message. And you know what they say: If you hear yourself say something long enough, you start to believe it. A Republican Party that focused on the middle class, and not the billionaires, would be a better party, and a stronger party—even if it might not be as well-funded.
Indeed, Trump is seemingly well-positioned to break up the Billionaires’ Consensus. Speaking of his fellow fatcats, he added to Breitbart, “I know the games. I know them better than they do.” And so it was, for example, that Trump demolished the carefully constructed carapace of denial around Bill Clintons’s history as a sexual marauder—and he did it with just a few comments and a Tweet or two. Whatever happens to Trump in the future, Republicans, as well as the nation, owe him a thank-you for his detonation of the Clintons’ “war on women” nonsense.
So why, exactly, did Trump make his big move? Why did he break away from the Consensus, and break toward politics—starting at the top?
He would say, of course, that he’s doing it for the good of the country. Others would say that he saw daylight, and, in the distance, the presidency. And so he ran through this huge gap in our politics—the gap opened up by middle class despair and outrage. Or, one could say, he rolled through it like a Mack Truck.
It’s too soon to know if Trump can win in November; we don’t even yet know if he can win the nomination—or even Iowa.
However, it seems fair to say that in going rogue, Trump has become a one-man wrecking crew on the Billionaires’ Consensus. He has made a bonfire of many, if not all, of their shared vanities. From now on, politicians will have to think a little bit more about voters, a little bit less about donors.
Meanwhile, Donald John Trump could be on his way to having something that none of the other 535 American billionaires have ever even realistically thought of—the White House as a residence.
Next: The Beltway Is Struck, But It Strikes Back.