Politico: Libertarian Koch Brothers Recognize 2016 Defeat by Populists

Mark Lennihan/AP

Politico reports Oct. 27 that the libertarian Koch brothers are cutting back their huge but ineffective political operation, marking another success for the nation’s rising populist movement.

On a drizzly Monday morning in mid-September, about 200 staffers from the Koch brothers’ conservative advocacy network were summoned to the fifth floor auditorium of the Charles Koch Institute’s Arlington, Virginia, headquarters, and presented with some bleak news: their efforts to reshape American politics were faltering and were being scaled back amid concerns about lower-than-projected fundraising.

In recent years, the deep-pocketed network’s forays into federal elections and policy fights had resulted in “very little success,” the managers were told by top Koch official Mark Holden, according to three people familiar with the meeting.

The Koch brothers’ great wealth was honestly earned in the unforgiving energy sector, where careless progressive dreamers quickly get blown up, bankrupted and forgotten. So the green-eyeshade politics promoted by Charles Koch and David Koch are a rational match for their business needs — they favor small governments, low taxes, low spending, and free trade, plus egalitarian social policies that gradually overlap with the progressives’ radical demands for unlimited immigration and sexual revolution.

But the 2016 election shows that the Koch’s package of business and politics, however productive and principled, is no longer good enough for most Americans. Voters want protection from the corrosive impact of unrestricted free-trade and unrestricted immigration that are favored by the alliance of progressives and executives.

In interviews, some [Koch]insiders traced the network’s decline — or at least its decline in growth — to its decision to sit out the presidential race, at first out of disagreement over whether to play in the crowded GOP primary, and then out of distaste for Trump

Asked about his comments at the staff meeting, [Mark Holden] acknowledged that “we’ve had very little success moving the needle at the federal level. It’s always difficult.” But, he added “we have had a lot of success at the state level and we hope that we will continue to do so.”

Ironically, though, some Koch insiders and critics alike agree that the conditions that are now challenging the Kochs are in some ways of their own creation. By helping to empower the anti-establishment tea party protests in 2009 and 2010, these people say, the Koch network inadvertently laid the groundwork for a movement that turned towards a strain of anti-immigrant protectionism that is anathema to the Koch’s ideology, and that proved fertile ground for Trump’s nationalist brand of populism.

“We are partly responsible,” said one former network staffer. “We invested a lot in training and arming a grassroots army that was not controllable, and some of these people have used it in ways that are not consistent with our principles, with our goal of advancing a free society, and instead they have furthered the alt-right.” …

“What we feel really badly about is that we were not able to educate many in the tea party more about how the process works and how free markets work,” said the donor. “Seeing this movement that we were part of creating going off in a direction that’s anti-free-market, anti-trade and anti-immigrant — many of us are really saddened by that. Unfortunately, there is little in the short term we can do about that.” 

The rise of populism in 2015 and 2016 was a surprise to many GOP-affiliated legislators, donors, intellectuals and lobbyists, despite the growing evidence from polls and media anecdotes. 

And the Koch network announced its jaw-dropping $889 million spending goal at a January 2015 gathering of its donors. It invited a handful of likely Republican presidential candidates — a group that did not include Trump, who was then considered a political sideshow — whose politics were deemed compatible with the Kochs. Not only was the network preparing to play a major role in the presidential general election, but it was openly toying with the prospect of wading into a GOP presidential primary for the first time ever.

All that careful planning was upended, though, when Trump unexpectedly surged to the front of the field. The Koch network couldn’t agree on a consensus alternative candidate to back. And, while sources say Charles Koch and his top lieutenants debated proposals to spend tens of millions of dollars to try to stop Trump, they ultimately decided against it.

The Politico article does not describe any efforts by the Koch brothers to sketch a compromise deal with the populist movement — for example, less cheap-labor immigration and tighter trade rules packaged with less business regulation and lower taxes — even though populist Americans are far more sympathetic to free-market business leaders than are progressive groups or immigrant communities.

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