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money in politics
Let's Make Trump the Last Gasp of America's Second Gilded Age
The challenge is the same as it was at the start of the 20th century: To fight for an economy and a democracy that works for all rather than the few.
Jan 03, 2025
Ultra-wealthy elites. Political corruption. Corporate monopolies. Anti-immigrant nativism. Vast inequality.
These problems aren’t new. In the late 1800s, they dominated the country during America’s first Gilded Age. We overcame these abuses then, and we can do so again.
Mark Twain coined the moniker “The Gilded Age” in his 1873 novel to describe the era in American history characterized by corruption and inequality that was masked by a thin layer of prosperity for a select few.
The end of the 19th century and start of the 20th marked a time of great invention — bustling railroads, telephones, motion pictures, electricity, automobiles — that changed American life forever.
But it was also an era of giant monopolies — oil, railroad, steel, finance — run by a small group of men who had grown rich beyond anything America had ever seen.
It seemed as if American capitalism was out of control, and American democracy couldn’t do anything about it because it was bought and paid for by the rich.
They were known as “robber barons” because they ran competitors out of business, exploited workers, charged customers exorbitant prices, and lived like royalty as a result.
Money consumed politics. Robber barons and their lackeys donated bundles of cash to any lawmaker willing to do bidding on their behalf. When lobbying wasn’t enough, the powerful moneyed interests turned to bribery — resulting in some of the most infamous political scandals in American history.
The gap between rich and poor in America reached record levels. Large numbers of Americans lived in squalor.
Anti-immigrant sentiment raged, leading to the enactment of racist laws to restrict immigration. It was also a time of voter suppression, largely aimed at Black men who had recently won the right to vote.
The era was also marked by dangerous working conditions. Children often as young as 10, but sometimes younger, worked brutal hours in sweatshops. Workers trying to organize labor unions were attacked and killed.
It seemed as if American capitalism was out of control, and American democracy couldn’t do anything about it because it was bought and paid for by the rich.
But America reached a tipping point. The nation was fed up. The public demanded reform. Many took to the streets in protest. Investigative journalists, often called “muckrakers” then, helped amplify their cries by exposing what was occurring throughout the country.
A new generation of political leaders rose to end the abuses.
Teddy Roosevelt warned that “a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power,” could destroy American democracy.
After becoming president in 1901, Roosevelt used the Sherman Antitrust Act to break up dozens of powerful corporations, including the giant Northern Securities Company, which had come to dominate railroad transportation through a series of mergers.
Seeking to limit the vast fortunes that were creating a new American aristocracy, Congress enacted a progressive income tax through the 16th Amendment, as well as two wealth taxes.
The first wealth tax, in 1916, was the estate tax — on the wealth someone accumulated during their lifetime, paid by the heirs who inherited it. The second tax on wealth, enacted in 1922, was a capital gains tax — on the increased value of assets, paid when those assets were sold.
The reformers of the Gilded Age also stopped corporations from giving money directly to politicians or political candidates.
Then Teddy Roosevelt’s fifth cousin (you may have heard of him) continued the work through his New Deal programs, creating Social Security, unemployment insurance, and a 40-hour workweek and requiring that employers bargain in good faith with labor unions.
But following the death of FDR and the end of World War II, and after America had built the largest middle class the world had ever seen, we seemed to forget about the abuses of the Gilded Age.
The reforms that followed the first Gilded Age withered.
Starting with Reagan, taxes on the wealthy were lowered. Campaign finance laws were weakened. Social safety nets became frayed. Corporations stopped bargaining in good faith with labor unions.
Now, more than a century later, America has entered a second Gilded Age.
Monopolies are once again taking over vast swaths of the economy. So we must strengthen antitrust enforcement to bust up powerful companies.
Now another generation of robber barons, exemplified by Elon Musk, is accumulating unprecedented money and power. So, once again, we must tax these exorbitant fortunes.
Wealthy individuals and big corporations are once again paying off lawmakers, sending them billions to conduct their political campaigns, even giving luxurious gifts to Supreme Court justices. So we must protect our democracy from Big Money, just as we did before.
As it was during the first Gilded Age, voter suppression is too often making it harder for people of color to participate in our democracy. So it’s once again critical to defend and expand voting rights.
Working people are once again being exploited and abused, child labor is returning, unions are being busted, the poor are again living in unhealthy conditions, homelessness is on the rise, and the gap between the ultra-rich and everyone else is nearly as large as in the first Gilded Age.
So once again we need to protect the rights of workers to organize, invest in social safety nets, and revive guardrails to protect against the abuses of great wealth and power.
Seeking these goals may seem quixotic right now, just weeks before Trump and his regime take power with a bilious bunch of billionaires.
But if history is any guide, they will mark the last gasp of America’s second Gilded Age. We will reach the tipping point where Americans demand restraints on robber-baron greed.
The challenge is the same as it was at the start of the 20th century: To fight for an economy and a democracy that works for all rather than the few.
I realize how frightening and depressing the future may look right now. But we have succeeded before, when we fought against the abuses of the first Gilded Age. We can — and must — do so again now, in America’s second Gilded Age.
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Trump’s Rise Was Four Decades of Upward Wealth Transfer in the Making
When most people stop believing that they and their children have a fair chance to make it, the tacit social contract begins to unravel, and a nation becomes susceptible to demagogues peddling the politics of hate.
Dec 29, 2024
U.S. President-elect Donald Trump isn’t the cause of what ails America. He’s the consequence. The real causes go back four decades.
Let me start with a bit of family history. During the 1950s and 1960s, my father, Ed Reich, owned a shop on the main street from which he sold women’s clothing to the wives of factory workers.
This time of year reminds me of his anxious dependence on holiday sales (and in the days after Christmas, the frantic returns). Between Thanksgiving and Christmas, he needed to earn enough to pay the bills and have a sufficient sum to carry us through the first part of the following year.
It’s crucial that Democrats focus on reversing the staggering inequalities of this era and getting big money out of politics.
We weren’t rich but never felt poor, and our standard of living rose steadily through the 1950s and 1960s—as factory workers and their spouses did better and better.
This was an era when the income of a single factory worker or schoolteacher or baker or salesman or mechanic was enough to buy a home, have two cars, and raise a family.
For three decades after World War II, America created the largest middle class the world had ever seen. During those years, the earnings of the typical American worker doubled, just as the size of the American economy doubled.
Over the last 40 years, by contrast, the size of the economy has more than doubled again, but the earnings of the typical American have barely budged (adjusted for inflation). Most of the gains have gone to the top.
In the 1950s and 1960s, the CEOs of large corporations earned an average of about 20 times the pay of their typical worker. Now they rake in over 300 times the pay of an average worker.
In the 1950s and 1960s, the richest 1% of Americans took home about 10% of the nation’s total income. Today they take home more than the bottom 90% put together.
Then, the economy generated hope. Hard work paid off. The living standards of most people improved through their working lives. Their children enjoyed better lives than they had. Most felt that the rules of the economic game were basically fair.
Although many women, Black people, and Latinos were still blocked from getting a fair share of the economy’s gains, the nation committed itself to changing this. New laws guaranteed equal opportunity, barred discrimination, promoted affirmative action, and expanded educational opportunity for all.
Today, confidence in the economic system has sharply declined. Its apparent arbitrariness and unfairness have undermined the public’s faith in it. Cynicism abounds. Equal opportunity is no longer high on the nation’s agenda.
As you’ll see in “The Big Picture” video above, recent American history can be divided into five periods:
- 1946-1979, we grew together. Almost everyone gained ground.
- 1980-2008, the great U-turn. Most economic gains began going to the top.
- 2008-2010, the financial crisis. The banks were bailed out, but millions of Americans lost their jobs, homes, and savings. The experience revealed the gross inequalities of wealth and power that underlay the new economy. This caused widespread disillusionment with the system.
- 2010-2016, anger at the establishment. Both Sen. Bernie Sanders (I-Vt.) and Donald Trump emerged as anti-establishment candidates—although Trump’s anti-establishment persona was fake (and still is).
- 2016-2050, the choice between oligarchy and democracy. The 2024 election represented a lurch toward oligarchy, but I believe Trump and his oligarchy will overreach, and we’ll choose a more robust democracy.
***
When most people stop believing that they and their children have a fair chance to make it, the tacit social contract begins to unravel. And a nation becomes susceptible to demagogues such as Donald Trump peddling the politics of hate.
Many of the most vocal proponents of the “free market”—including Elon Musk, executives of large corporations and their ubiquitous lawyers and lobbyists, denizens of Wall Street and their political lackeys, and numerous multimillionaires and billionaires—have been actively reorganizing the market for their own benefit.
The consequence has been a market created by those with great wealth for the purpose of further increasing their wealth.
This has resulted in ever-larger upward distributions inside the market, from the middle class, working class, and poor to a wealthy minority at the top.
Because these distributions occur inside the market, they have largely escaped notice. We tend to debate only downward “redistributions” that occur outside the market, through taxing the rich and transferring some benefits to the poor and working class.
Musk and Trump want to reduce such redistributions.
But the hidden upward redistributions inside the market are arguably larger.
This is why it’s so important that those of us who care about social justice speak out and explain what has happened. And why it’s crucial that Democrats focus on reversing the staggering inequalities of this era and getting big money out of politics.
Otherwise, the only explanation most Americans receive for what has happened comes from Trump authoritarians who falsely blame immigrants, “socialists,” the “deep state,” “woke”ism, Democrats, Black people, women, and other countries.
And the only agenda most Americans receive for remedying what has occurred is by backing Trump and Musk and their lurch toward fascism.
My friends, the underlying issue is not the size of government. It’s whom the government is for. The fundamental choice is democracy or oligarchy.
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Trump Is Turning the White House Into a Billionaire Time-Share
It appears that Trump has entered into a power-sharing agreement with Musk and several other wealthy individuals including Vivek Ramaswamy, Robert F. Kennedy Jr., and David Sacks.
Dec 28, 2024
Democracy decays into oligarchy when a few individuals accumulate most of the political power.
The reelection of Donald Trump has accelerated the decline of the United States into oligarchy. Trump has had billionaire donors for each of his presidential campaigns, but in 2024 the role of these wealthy donors expanded. Donors such as Elon Musk made gigantic contributions to Trump’s campaign; in return for this they are taking an active role in the Trump White House. Perhaps, this time around, Trump turned the oval office into a time-share.
On December 19, Elon Musk led the call for House Republicans to repudiate a continuing resolution they had just negotiated to keep the federal government running through the end of the year. Perhaps Musk’s charter includes coordination with Congress.
When Elon Musk and Vivek Ramaswamy speak of increasing government efficiency, they usually start with services for the unfortunate.
It appears that Trump has entered into a power-sharing agreement with Musk and several other wealthy individuals including Vivek Ramaswamy, Robert F. Kennedy Jr., and David Sacks. However this arrangement works, it’s likely that the Trump administration will cater to billionaires—Sen. Bernie Sanders (I-Vt.) observed that the 13 billionaires chosen by Trump to serve in his administration have a combined wealth of at least $383 billion.
What do these billionaires want? The oligarchs and billionaires want lower taxes and reduced government regulations. Of course, each billionaire has a particular set of interests; for example, David Sacks, Trump’s “AI and crypto czar,” is a venture capitalist with heavy investment in AI and crypto. Sadly. most of the oligarchs are climate-change deniers.
The oligarchs want more wealth. Robert Reich observes:
Since [1980], the median wage of the bottom 90% has stagnated. The share of the nation’s wealth owned by the richest 400 Americans has quadrupled (from less than 1% to 3.5%) while the share owned by the entire bottom half of America has dropped to 1.3%… The richest 1% of Americans now has more wealth than the bottom 90% combined.
The oligarchs share a fiscally conservative agenda. They intend to shrink the size of the federal government. The particulars vary but the oligarchs are not concerned with the size of the defense budget; their cost-cutting focus is on programs that service the poor and disadvantaged—such as Medicaid. When Elon Musk and Vivek Ramaswamy speak of increasing government efficiency, they usually start with services for the unfortunate.
What are the practical consequences of this shift to oligarchy? It’s unsettling to be in a political situation where we do not understand who is in charge at the White House. We don’t know how power-sharing will work. The relationship between Trump and Congress has been fraught. The shift to oligarchy will make this relationship even more difficult.
Will the oligarchs fix the economy? Trump was elected because he promised to fix the economy. Most Americans believed he would drive down inflation; they thought Trump would reduce the cost of food, housing, and household and medical expenses. Since November 5, Trump has given no indication of how he plans to do this. Perhaps he has lost interest.
During the presidential campaign, Trump said his inflation-fighting agenda would rely upon tariffs, but it’s likely that the oligarchs will influence how Trump’s tariff strategy plays out. Musk has huge business interests in China, and it’s unlikely that he would support a tariff policy that would hurt his relationships with the country.
Trump has appointed a “czar” for immigration (Tom Homan), energy (Doug Burgum), and AI & Crypto (Sacks). Trump has not appointed a czar for inflation. With much fanfare, Trump has appointed a commission on “government efficiency;” they’ve already started meeting. Trump has not appointed to a commission to curb inflation.
After January 20, Trump will own inflation and the economy. Trump’s immigration “purge” will drive up the cost of food. Trump’s tariffs will drive up the cost of household expenses.
Trump’s trying to ignore inflation. Or turn it over to an oligarch co-president. Stay tuned.
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