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US Politics Has Become the Fiefdom of Billionaires
At its core, the promise of democracy is “one man one vote”; but the attraction of capitalism is “one man many votes,” meaning the rich guys get the best things and lots of them, while the poor guy loses out.
Nov 08, 2024
Not that many people know that The Wizard of Oz, one of America’s most-loved films, is based on the arcane economic world of monetary policy. L Frank Baum’s novel is a disguised critique of the folly of the Gold Standard written in the wake of the 1896 election, at a time when America was deeply divided socially and geographically, when enormous power was wielded by a billionaire class, the so-called Robber Barons.
The election centred on whether America should swap the straitjacket of a gold-backed dollar for the looser cardigan of a silver-backed dollar. As gold is less plentiful and more expensive than silver, opting for a silver-backed currency would cause a devaluation that would inject more dollars into the economy, helping the poor.
The yellow bricks of the Yellow Brick Road, represent the gold bars which paved the way to the Emerald City, the city of green – or greenback, the colloquial term for the dollar. Dorothy represents the wholesome daughter of middle America, literally Kansas. The Scarecrow is the put-upon Midwestern farmer American and the Tin Man is the industrial worker.
Politically, the Democrats, in an alliance with a new party called the Popular Party, representing workers, farmers and the lower middle class, wanted a dollar backed by silver, meaning there would be more dollars around. In contrast, the Republicans represented industrialists, Wall Street and the wealthy, the kind of people who wanted to preserve their dollar wealth and maintain the Gold Standard.
With so much at stake and the country so explicitly divided along class lines, the rich opened their wallets and, for the first time, America’s election was truly swung by money. The Republicans won because they raised more cash.
William McKinley, the victorious Republican candidate, received contributions worth more than $16 million (about $600 million in today’s money). McKinley’s chief fundraiser, Mark Hanna, raised more than $6 million by courting corporations with the promise of a big-business-friendly agenda. Hanna is famously quoted as saying: “There are two things that are important in politics: the first is money and I can’t remember the second one”.
And who do you think the Wizard of Oz represented? Why, Mark Hanna the financier, hiding behind the slogans and conspiring against the ordinary American, embodied by the innocent Dorothy.
Whoever pays the money expects favors. Money buys policy. That is and always has been the deal.
The American political scene was set over a century ago. Money matters in American politics, and that adage of the Republicans being for sale while the Democrats are only for rent is no longer strictly accurate.
Today’s Democrats aren’t above a mutually beneficial deal and are in the pockets of big business as much as their opponents. The problem with big money and unrestrained capitalism in politics is so obvious that it doesn’t need to be pointed out, but suffice to say that it is inimical with a properly functioning democracy.
At its core, the promise of democracy is “one man one vote”; but the attraction of capitalism is “one man many votes,” meaning the rich guys get the best things and lots of them, while the poor guy loses out.
Capitalism and democracy are in a constant state of friction. The excesses of capitalism need to be tempered by the equalising nature of democracy; however, too much democracy and redistribution limit the “animal spirits” of capitalism upon which prosperity rests.
Modern western societies are a tug of war between these two alternating ideas where a balance is sought between both; sometimes it’s called social democracy, Christian democracy or centrism but it amounts to the same, a truce.
Unfortunately, the conditions of the truce are influenced by money, which is why big money in elections is problematic. As is the case in any indecent proposal, whoever pays the money expects favors. Money buys policy. That is and always has been the deal. American politics has become the fiefdom of billionaires, the effect of which can only be imagined.
We’ve all seen Elon Musk jumping around Trump’s rally with the physical co-ordination of a homeschooled kid who’s never seen a PE class, but Musk isn’t the only billionaire with a stake in the game. The two US presidential candidates had raised more than $3.8 billion by mid-October. A Financial Times analysis of campaign finance filings found that billionaires have donated at least $695 million, or about 18 per cent of the total. Trump is particularly dependent on US elites, with about a third of his money coming from billionaires compared with about 6 per cent of the funds raised by Harris.
Trump’s finance base is rich but narrow while Harris’s is more broadly based. From January 2023 to mid-October 2024, Joe Biden and Harris outraised Trump ($2.2 billion to Trump’s $1.7 billion). But the rich guys have placed their bets; at least 144 people on the list of 800 US billionaires compiled by Forbes have donated to either candidate.
Billionaires leaning toward Harris may seem incongruous as she often criticizes Trump for being too close to the plutocrats, but there are practical reasons why the ultra-wealthy may favor Harris.
As was the case in 1896, if you are rich you want stability – after all, you are doing well from the status quo. A letter signed by more than a dozen billionaires last month endorsing Harris explained their belief that she will “continue to advance fair and predictable policies that support the rule of law, stability, and a sound business environment”. In contrast, although he might cut their tax bills, Trump represents chaos and commotion, which is never good for business.
No matter whether the money comes from the liberal center or the tear-it-all-down libertarian right, it comes with a price, a sort of pay-to-play cover charge. If you want influence in America you pay for it.
In Europe, strict limits on campaign contributions help curb plutocratic influence. For example, the $1.6 billion Joe Biden spent to win the 2020 presidential election is 70 times more than the sum Emmanuel Macron spent on his 2022 win – despite the fact that the US population is just five times larger than that of France. The total spend across all 12 candidates in the French presidential race was just over €83 million. Germany – a country with more billionaires per head than America – enforces strict donation limits and transparency rules, with caps of €50,000 per donor, reducing the risk of policies favoring an elite few.
No matter whether the money comes from the liberal center or the tear-it-all-down libertarian right, it comes with a price, a sort of pay-to-play cover charge. If you want influence in America you pay for it.
Irish elections are subject to strict spending limits. Candidates running for the Dáil can only spend up to a maximum of €38,900 in a three-seat constituency, €48,600 in a four-seater and €58,350 in a five-seater. These numbers are paltry in the context of US elections, where there are no spending limits. In Ireland, donations from individuals or companies to a party are capped at €2,500 per year, while donations to individual candidates are limited to €1,000 per year.
After the alfresco political bribery of the Charlie Haughey and tribunal years, things are more above board and the days of rich guys buying elections in return for explicit special treatment are long gone. By way of contrast, the clear conflict between capitalism and democracy in America is there for all to see. As they say, the US is “the best democracy money can buy”, and the die was cast in 1896 with the election of William McKinley.
In those final days of the 19th century, with their man in the White House and tariffs erected to protect their businesses, America’s billionaire plutocrats must have felt unassailable. But following McKinley’s assassination by an anarchist in 1901, power moved to his vice-president, Teddy Roosevelt, who would turn on the very plutocrats who had financed his campaigns. Sensing that America yearned for equality after years of division and a decade of rich men lording it over the working man, Roosevelt brought the billionaires to heel, regulating them, taxing them and breaking up their monopolies.
A decade after buying the election, the billionaire class was on the skids, accused by Republican president Roosevelt of “predatory capitalism.” Fortunes turned dramatically. Political power slipped away from the plutocrats just when they thought victory was theirs.
Can history repeat itself? I wouldn’t bet against it.
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Crypto Industry's $40 Million Defeat of Pro-Worker Sherrod Brown Called 'Obscene'
The Ohio Democrat lost his seat because "the billionaire-backed crypto industry donated $40 million to his right-wing opponent," lamented one labor journalist.
Nov 07, 2024
The Republican Party's capture of the U.S. Senate this week was made possible in part by massive spending from the nascent but increasingly influential cryptocurrency industry, which pumped more than $40 million into a successful effort to topple pro-worker progressive Sen. Sherrod Brown in favor of luxury car dealer Bernie Moreno.
Crypto industry spending helped make Ohio's closely watched Senate race the most expensive in the state's history, with Moreno's campaign boosted by around $40.1 million from the super PAC Defend American Jobs—part of what OpenSecrets described as the "triad" of allied pro-crypto groups pouring cash into the 2024 election.
The Washington Postnoted that Moreno "founded a blockchain firm called Ownum in 2018" and "has long immersed himself in blockchain technology, a registry of ownership that essentially underpins all cryptocurrency."
A spokesman for Fairshake, another member of the crypto PAC triad, took credit for Moreno's victory in a statement after the election was called in the Republican's favor and condemned Brown's
support for regulating the industry. Fairshake received tens of millions of dollars in donations from the cryptocurrency exchange giant Coinbase—some of which may have been illegal spending, according to the watchdog group Public Citizen, given that the company is a federal contractor.
"Sherrod Brown was a top opponent of cryptocurrency and thanks to our efforts, he will be leaving the Senate," said Fairshake's Josh Vlasto. "Senator-elect Moreno's come-from-behind win shows that Ohio voters want a leader who prioritizes innovation."
Crypto executive Tyler Winklevoss boasted in a social media post, "The crypto army is striking!"
"Sherrod Brown—crypto public enemy, Elizabeth Warren co-conspirator, and Gary Gensler crony—was just ousted by Bernie Moreno for Ohio Senate," wrote Winklevoss, the co-founder of Gemini.
Labor reporter Steven Greenhouse wrote Wednesday that it is "obscene" that Brown lost his seat because "the billionaire-backed crypto industry donated $40 million to his right-wing opponent."
"Sherrod Brown is one of the most pro-worker, pro-middle-class members of the U.S. Senate," Greenhouse added. "He truly fights for workers."
"The strategy was a brazen attempt to buy influence while keeping the public unaware of what they were supporting."
While the Ohio Senate contest was "the biggest single target of crypto money this cycle," as CNBCput it, the industry spread its money widely, backing both Republicans and Democrats in races across the country—underscoring its attempt to gain influence over future regulatory fights in Congress.
Overall, crypto groups spent more than $130 million in support of candidates for federal office this cycle. A tracker created by the Stand With Crypto Alliance estimates that 263 "pro-crypto candidates" were elected to the House and 18 to the Senate in Tuesday's contest.
Former President Donald Trump's victory over Vice President Kamala Harris was also seen as a win for the industry, with Bitcoin's price
spiking to a new all-time high on Wednesday. During his campaign, Trump vowed to make the U.S. "the crypto capital of the planet."
"Tonight the crypto voter has spoken decisively—across party lines and in key races across the country," gushed Brian Armstrong, the CEO of Coinbase. "Americans disproportionately care about crypto and want clear rules of the road for digital assets. We look forward to working with the new Congress to deliver it."
But one critic, Better Markets president Dennis Kelleher, cast doubt on the industry's self-serving narrative that the 2024 results amounted to a ringing endorsement of cryptocurrency.
In an op-ed for the San Francisco Chronicle on Thursday, Kelleher pointed out that pro-crypto PACs adopted "generic anodyne names" and bankrolled ads that didn't even mention cryptocurrency.
"It's as if Ford ran an ad campaign and never mentioned its cars," Kelleher wrote. "The strategy was a brazen attempt to buy influence while keeping the public unaware of what they were supporting. This way, the industry can claim the now-elected officials they backed have a mandate from the public to support crypto interests—even though they don't."
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Progressives Say Trump Win Spotlights Rot of Political System 'Bought and Paid for by Billionaires'
"These monied interests are on the frontlines of destroying our democracy, taking away the power of voters through their unprecedented spending in elections," said the executive director of Justice Democrats.
Nov 06, 2024
As progressives in the United States and around the world assessed the dire implications of Donald Trump's victory and
prepared to fight his coming administration, the advocacy group Justice Democrats said Wednesday that the Republican's win is a devastating indictment of a political system "bought and paid for by billionaires and corporations" committed only to accruing more wealth and power for themselves.
"These monied interests are on the frontlines of destroying our democracy, taking away the power of voters through their unprecedented spending in elections—while those in power refuse to stand up and fight back," Alexandra Rojas, the executive director of Justice Democrats, said in a statement, condemning the leadership of both major parties as servants of corporate power.
"It's time to end the era of career politicians and the corrupt campaign finance laws that keep them in power," Rojas added.
The 2024 contest was the most expensive in U.S. history, according to the watchdog organization OpenSecrets, which noted in an Election Day blog post that outside spending in the race reached a record-shattering $4.5 billion. More than half of that spending, OpenSecrets observed, came from "groups that do not fully disclose the source of their funding."
Such dark money groups have proliferated widely since the U.S. Supreme Court's 2010 Citizens United decision, which—along with other rulings and congressional inaction—allowed torrents of untraceable cash to flood the nation's political system, warping and undermining the electoral process.
"It's Citizens United's world, we're just living in it," researcher Becca Lewis wrote Wednesday morning.
"As long as our party has cozied up with corporate CEOs, right-wing billionaires, and big money super PACs, everyday people in this country have seen Democrats' populist platitudes as hypocrisy at best, and outright deceitful at worst."
As OpenSecrets' Tuesday analysis made clear, both Trump and Vice President Kamala Harris—and their parties—benefited from massive sums of dark money and super PAC cash, as well as donations from billionaire families.
"Super PACs aligned with each major party's leaders in the House and Senate have taken hundreds of millions of dollars from dark money groups funded by anonymous donors during the 2024 cycle," the watchdog reported. "During the 2024 election cycle, the four main nonprofits aligned with Republicans and Democrats in Congress churned about $250 million from anonymous donors to allied super PACs. Senate Democrats' flagship dark money group, Majority Forward, accounted for over $113.2 million of that, more than any prior election."
Despite that massive influx of cash, Democrats lost control of the U.S. Senate after the GOP flipped seats in Ohio, Montana, and West Virginia—underscoring Justice Democrats' call for a "new era" of Democrats "not beholden to corporations and billionaires."
Rojas acknowledged Wednesday that "there are no easy answers for where we as a country and movement go from here" following such a decisive win for Trump and his far-right Republican Party, which has no interest in reforming the federal campaign finance system.
"But what is clear to us is that politically courageous leaders at the federal level are needed now more than ever," she said, warning that the Democratic Party is "rapidly losing its legitimacy amongst the everyday people and marginalized communities continuously used as stepping stones to win elections."
"For as long as our party has cozied up with corporate CEOs, right-wing billionaires, and big money super PACs," Rojas added, "everyday people in this country have seen Democrats' populist platitudes as hypocrisy at best, and outright deceitful at worst."
Joseph Geevarghese, executive director of Our Revolution, argued Wednesday that the Democratic Party "needs institutional reform, a return to the principles of economic justice, and a commitment to prioritizing the needs of the working class and young voters."
"We can no longer afford to be held hostage by the donor class," said Geevarghese.
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