60:42thank you what is the most persistent60:45zombie idea on the left and is there one60:47is there an idea to what you have60:50subscribed in the past which you now60:51kind of put into that category oh boy I60:55mean the trend the left is not nearly as60:58good at maintaining zombie ideas partly61:03because there there are in fact not that61:07many leftist billionaires and and61:09billionaires there are some but not very61:12leftist and so I mean well let me put61:20this way we were talking about climate61:22and environment and and climate change61:25and economic growth I’m running to a lot61:27of people still who are now this is61:30telling you that there I don’t think61:31there are a large part of the electorate61:33but there are61:34but the circles I move in I run into61:36people who are sure that to fight61:39climate change we have to stop living61:41the way we’re living and a much more61:43austere back-to-nature lifestyle is the61:47only way to deal with climate and that’s61:49an idea that it’s just clearly wrong if61:53we actually asked by we know enough61:55about the technological and economic61:57solution to climate change that ASUS a62:00green society that does not burden the62:02planet would almost certainly be a62:04society that looks a whole lot like what62:06we have now in people with the driving62:08cars they’d be using electricity but the62:10cars with the electric and the62:12electricity would be generated by solar62:13and wind and it but the actual rhythm of62:16daily life could look very much like62:18what we we have we don’t have to go back62:20to to an agrarian pastoral Eden to to to62:25deal with the issue but it’s it’s62:26something that sounds again it sounds62:29serious from a different point of view62:30it sounds like if you’re serious about62:31climate change you must be serious and62:34believing that we have to give up on62:35this consumer oriented society and and62:38all of these these comforts that we take62:40for granted but in fact it’s not true so62:43that would here that would be an example62:44of a kind of a left-wing zombie in other62:46countries in the belief that you can62:49just dictate all prices and you know you62:53can put price controls on everything and62:54not and never face shortages that’s not62:58something we see in the US but they62:59Venezuela clearly there’s some refusal63:02to face reality going on but that would63:05be these house but again zombies mostly63:08flourished because their big money63:10behind them not all of them but mostly63:12and and and the no.4 for every George63:17Soros there are 50 quiet billionaires63:21supporting extremely reactionary causes63:23and what about the question the question63:25of an idea you’ve changed your mind oh63:27so most of my changes have been in the63:33in the other direction look at minimum63:36wages no no a piece of economic research63:41has has shaken my views as much63:46actually I’m gonna give you two and and63:50me at this this is a great risk of63:52turning into a Monty Python routine63:54amongst the issues three okay so64:00actually so I’ll give you two one64:01minimum wages up until sometime in the64:05mid 1990s I believe that clearly64:09increases in minimum wages would cost64:11jobs they might be desirable otherwise64:13but econ 101 said that that’s what64:15happened and then we got this amazing64:17body of empirical research because we64:19get in the United States we get a lot of64:21natural experiments when one state64:22raises its minimum wage and the64:24neighboring state does not and the64:26overwhelming evidence says that minimum64:28wage increases at least within the range64:30we see in the US do not cost jobs and64:33that changed my view has said labor64:34markets are very different from where I64:35thought it actually moved me towards64:38emphasizing the role of power and in64:40labor relations and so on another one I64:43used to think that it was always64:44possible just by printing money to get64:47full employment and and the experience64:50of Japan in the late 1990s when despite64:54a very easy monetary policy they slid64:56into deflation changed my views totally65:00I there was a there was a group of us65:03actually of when I when I arrived at65:05Princeton in 2000 was a bunch of Japan65:07warriors who were really very shaken by65:10the Japanese experience because we we65:12looked at it said you know this could65:13happen to us so with me people you65:16wouldn’t have heard of but very65:17influential in the professional arts65:18Vince and Mike Woodford and the fourth65:21was Bernanke Ben Bernanke don’t know65:24what happened to him he disappeared I65:26think yeah so we so that but no the the65:31Japanese Japan’s Lost Decade65:33changed my view and basically made me65:36much more Keynesian much more believer65:38that there are times when you really65:40need to have the government do the65:41spending yes how do you successfully65:45regulate the financial markets while not65:50scaring the business community in sort65:53of trying to65:55in the middle of a class that any form65:58of common sense reform or tax is not66:01Marxist Leninist and it’s not going to66:03take away all their assets and money66:05okay you know we’ve done this before66:10right we imposed extensive bank66:14regulation in the 30s which didn’t66:17obviously cripple the economy we the66:19post-war generation was was the best66:22generation in in in certainly in US66:24economic history the the the only I66:29would say the problem is not scaring66:31people not looking Marxist the problem66:33with regulating financial markets is66:35first of all they’re the financiers have66:39a lot of clout but but beyond that it is66:45hard to keep up with financial66:49innovation which very often is not66:53innovating in the sense of you know66:55doing things better but as is innovating66:58a way of finding ways to set things up67:01that evade the regulations so you67:04regulate banks and then people create67:06something that is functionally a bank67:07but doesn’t technically meet the67:09definition of a bank and evades the67:11regulations it’s hard to keep up with67:13that and and if it’s not a well solved67:16problem in the we had a significant67:21financial reform in the US under Obama67:24not everything you I would have wanted67:26but it was significant but on many of67:29the issues it depends upon this67:31Financial Stability Council which has to67:34define systemic lis important67:37institutions that they’re mean and67:40there’s no clear definition it’s kind of67:43like pornography you know when you see67:44it which is not a stupid way to do it67:47but it depends upon having honest people67:51of goodwill in charge and now we have67:55the Trump administration so so the67:58dodd-frank is not a very effective tool68:00and it always depended upon upon good68:04leadership and68:06we have not found I haven’t come up with68:08a way to the thing about doing a regular68:10old-fashioned commercial banks is that68:15that system works the regulations work68:18the the guarantees work without68:21requiring that there be smart leadership68:23or good judgment calls at the top and68:25unfortunately everything we try to do to68:27deal with more modern financial68:29institutions is requires both goodwill68:34and sophistication which are both the68:36now and very short supply question from68:39the balcony please thanks very much so68:41we’ve mostly discussed zombi ideas in68:43the kind of domestic policy context i68:45wanted to ask about zombie ideas in the68:47international context in the sense of68:50the Washington Consensus and trade68:51liberalization and specifically I want68:54to ask what your thoughts are on the68:56extent to which countries can still68:58develop by exporting I has the impact of69:02technology and the scale of China made69:06it essentially impossible for a trade69:07liberalization to facilitate development69:10okay that’s a good question69:13I think empirically it’s just the69:16premise is wrong so we all know about69:19China and we know that China occupies69:21this huge space and China is a unique69:25success story nobody else has matched69:27their rates of growth but it’s not the69:31only success story so when I took I like69:34to talk about the the unfamiliar cases69:39Bangladesh Bangladesh is a desperately69:43poor country and and compared with69:46working conditions and in in the first69:49world it’s it’s is horrible and they69:51have factories that collapse and kill69:53hundreds of workers and all of that but69:56Bangladesh is actually they’ve they’ve69:59tripled their per capita income and70:03there there are very poor country but70:06they were a country that was right on70:07the edge of Malthusian starvation and70:11it’s all because of the ability to70:13export if the the ability basically70:17clothing labor-intensive70:19that they’ve been steadily gaining70:21market share at China’s expense because70:23China has been moving upscale and that’s70:26that’s showing that you can get yeah70:28that’s that’s major development that’s a70:29major change it’s it’s not it’s a long70:32way from from turning into into Western70:35Europe but it’s it’s it’s a very big70:37deal and it’s showing that the70:39globalization can still work for for70:41poor countries so I that’s that’s what70:45the line Bangladesh is not a it’s not a70:48banana republic it’s a pajama republic70:51but but that you know they can make fun70:54of it but in fact their use that’s a70:56very large number of people who are70:57lifted at least some ways above71:00starvation level by globalization and71:03another question from the balcony please71:06looking at it as a economist with a71:08mathematical mind what impact do you71:11think a shift a proportional71:12representation would have over time as71:15you compared to the electoral colleges71:18and first-past-the-post which we have in71:19the UK other British Commonwealth71:22countries which tend to over time have71:24led to two party states so what if we71:26shifted the proportional representation71:28okay I mean firstly the u.s. the the71:33u.s. electoral college system is71:35monstrosity that’s a that’s not about71:38first-past-the-post it’s about a system71:40that at the presidential level gives71:42disproportionate representation to to71:45some states with small populations and71:48at even more important we have the71:50Senate which where half the Senators are71:53elected by 16 percent of the population71:55so this is a that that’s crazy71:58that’s a deeply basically we’ve we’ve72:00evolved into a rotten borough system for72:03half of the US government and that’s72:05that’s a clear monstrosity as for the72:08rest I mean I don’t know I mean this is72:13not I’m not a political scientist I talk72:16to political scientists which by the way72:18is rare for economists we actually talk72:20I actually talk to these goods to other72:21social sciences and take them seriously72:24and but what I would say is that the the72:29there are places with proportional72:31representation72:32that also managed to be very72:34dysfunctional so you know Israel I72:38believe has proportional representation72:39and I would not say that Israeli72:44politics these past 15 years have been a72:47model of good ideas and wisdom72:50prevailing in fact they I mean every72:52system has its problems and one of the72:54problems with proportional72:55representation is it sometimes causes72:57small factional parties with with very73:01antisocial goals to to be kingmakers so73:06that’s not an easy solution either I73:08don’t really know what the answer is73:10except to say that that you know people73:13people are both generally clever and73:19often nasty and they can find a way to73:21screw up any system question trip down73:24here hi73:25you said earlier that the American73:26economy is in a pretty strong position73:28so I was wondering how much he thought73:30Trump could legitimately claim73:32responsibility for that and then73:33alongside that what are the strong II73:35cannot strongest economic arguments to73:37voters for voting against him okay the73:41reason that we’re in a relatively strong73:43economic position is that it’s basically73:47deficit spending after years and years73:49of saying no debt this is an existential73:52threat then we must have austerity which73:54really hobbled the US recovery under73:58Obama as soon as Trump was in office for74:00Republicans said oh we don’t care about74:02that I mean the last two State of the74:04Union speeches have not so much as74:06mentioned the deficit and that even74:09though it’s badly done it does give a74:13boost to demand so I guess you could say74:16the Trump has gets some credit in the74:19sense that by getting elected he caused74:22congressional Republicans to stop74:24sabotaging the economy that’s not a you74:27know vote Republican and and and and the74:29and the economy won’t be undermined by74:31by our sabotage efforts so that’s not a74:34great electoral slogan but it might win74:36in the election I have to say and I lost74:40the room what the rest of that was but74:42the74:44was one of the strong strongest economic74:46arguments to voters to vote against him74:48oh the thing about Trump is that he’s74:50managed to preside over a economy that74:55by sort of aggregate measures74:58unemployment rate is low GDP growth has75:02been pretty good not spectacular but75:04pretty good but which is is showing75:08increased hardship for many people75:11despite that I mean we were making huge75:13progress in reducing the number of75:15people without health insurance that has75:17now gone into reverse the number of75:19people who say that their that they are75:23that they are postponing or not75:27undertaking necessary medical treatment75:29because of expense has skyrocketed75:32and the America like the UK there’s75:38tremendous regional divergence we have a75:43large part of the large parts of the the75:47heartland which are in severe economic75:50decline as social collapse and that has75:53just accelerated you know despite the75:55low overall unemployment rate the state75:58of affairs in Eastern Kentucky is76:01terrible and life expectancy I guess it76:06rose slightly this past year but you76:07know mortality rates are rising and it’s76:11as in case an Angus Deaton say deaths of76:14despair people dying from from opioids76:19alcohol and suicide have been rising76:22despite the strong economy so this is76:25actually that earlier question about GDP76:27you know the GDP growth not saying that76:31the that it’s false but under under the76:34surface of that good GDP growth is76:36actually a substantial increase in76:38misery just a one final question from76:43thanks bull great to see you here my76:48question is about the u.s. minimum wage76:50obviously it’s very very low compared76:53it should be you know from visiting the76:55US for last 25 years it seems P and76:57getting no three jobs to make ends meet77:00what do you think the minimum wage77:02should be and one of the reasons other77:05than you know losing jobs that perhaps77:07people have been keeping it down the77:09minimum wage suppressed oh so I asked77:12that in Reverse I mean the reason the77:14minimum wage has been held down is77:15because employers want chief labor and77:20they have a lot of clout the question of77:24how high to go is an interesting one77:26and it’s the so even the the big move in77:34the u.s. is for $15 and that’s a I’d say77:39even $15 an hour even Alan Krueger who77:43was one of the key researchers on that77:45revelatory work was a little nervous77:48about 15 and that the problem is77:52regional the the state of New York the77:55state of California no problem you have77:58a $15 minimum wage and and there’s78:00absolutely no reason to think that78:02that’s economic difficulty we’re talking78:05about Mississippi or Alabama places with78:08much lower productivity you might start78:10to have some job loss at that level I78:12think that the preponderance of the78:14evidence says that $15 is okay that78:18there might be some minor job loss in78:21some of the least productive parts of78:22the US but but overall not a big deal I78:26think 20 I would start to make me really78:28nervous78:29that then you start to really be a78:30problem in in potentially problematic78:33territory but it’s it’s why they see78:36actually in this case I think a federal78:38minimum wage of 15 and then higher wages78:40and in in in appropriate States it makes78:44sense this is one of these cases where78:45federalism works to our advantage and78:47and it’s interesting by the way Alan78:49Krueger did do at one point he he went78:52to to Puerto Rico which part of the u.s.78:55is subject to the u.s. minimum wage and78:57much lower productivity and said there78:59we should be able to see clear evidence79:01that the minimum wage cost jobs and he79:03couldn’t find it he said I don’t really79:05believe this by79:06I can’t find the evidence so so for the79:09moment I say let’s let’s go for 15 and79:11see what happens and then maybe maybe79:15look for the high productivity states to79:20to go beyond that great I’m so sorry to79:24have to draw it to a conclusion but you79:27will have the opportunity to meet ball79:29and and get the book signed for now79:32please join me in thanking him for79:34really fascinating today all right
When Joe Biden was declared the big winner in South Carolina, you could hear Democratic donors from Manhattan to Malibu crying for joy. Buoyed by glowing, round-the-clock media coverage of his weekend blowout, Mr. Biden made an impressive showing on Super Tuesday. With the former vice president resurgent, the Democratic establishment now has an unexpected final chance to crush Bernie Sanders’s socialist revolution.
Mr. Sanders achieved early front-runner status by making the wealthy into boogeymen. Pushed to the wall by a rising tide of antiwealth sentiment, these elite Democratic donors feared losing control of their party to a socialist who didn’t need them and, worse, would make them his permanent scapegoat. The patronage system they had built over generations, which assured them of power and fortune, was at risk of forced liquidation.
The Democratic donor class had thrown money at a succession of candidates they judged better bets.
- Kamala Harris,
- Cory Booker,
- Beto O’Rourke and
- Pete Buttigieg
were each trumpeted, proclaimed by the establishment’s media organs as the next Barack Obama. Then, to the horror of their backers, most failed to connect with voters and exited early. Donors were dispirited.
Michael Bloomberg’s entrance was a potential safe harbor—and an attractive one, given the prospect that donors could have influence without having to open their wallets. But that notion was dispelled the moment Elizabeth Warren eviscerated him on the debate stage.
With no viable options left, donors were becoming quietly resigned to a Sanders loss to President Trump in November. They could thrive economically in a second Trump term, but they couldn’t survive politically if a socialist took over their party apparatus. Backing Mr. Biden became the last option to consolidate their resources and recover their slipping grip on political power.
Mr. Clyburn immediately used his political capital to make clear that Mr. Biden needed a campaign “overhaul.” The candidate agreed. With this go-ahead, the money men kicked their efforts into high gear trying to put his Humpty Dumpty operation back together again.
The choreography of the establishment consolidating its resources quickly became visible. Mr. Biden hauled in $5 million in the 24 hours after South Carolina. Then came withdrawal announcements from Mr. Buttigieg and Amy Klobuchar. By the time Mr. Buttigieg offered his endorsement, Mr. Biden’s finance team had recruited dozens of Mayor Pete’s “bundlers.” Top Obama confidantes made it known that “the signal” had been sent to back the former vice president.
Alongside these on-the-ground moves, some media analysts estimated that Mr. Biden enjoyed as much as $72 million in earned media “air cover.” The press’s goodwill filled the void while the Biden campaign rushed to fill its coffers for the contests beyond Super Tuesday.
On Wednesday, Mr. Biden received another political blessing. Mr. Bloomberg exited the race after his $570 million campaign netted an embarrassingly low haul of delegates. He then immediately endorsed Mr. Biden, who will undoubtedly be the beneficiary of the former New York mayor’s deep pockets.
With no billionaire primary candidates left to kick around, Mr. Sanders has turned his ire against Mr. Biden’s contributors. Taking the stage in Minnesota Monday night, Mr. Sanders reprimanded his audience when they booed Mr. Biden’s name. The former vice president was a longtime friend and “decent guy whose just wrong on the issues,” Mr. Sanders said. Then he went after Mr. Biden’s donors: “Does anybody think that we’re going to bring about the change we need in America when you are indebted to 60 billionaires?”
This is the moment my Democratic donor friends have dreamed of since Hillary Clinton lost. The battle for the soul of their party will be fought on the terms that both they and Mr. Sanders want: big-money power brokers versus a small-dollar socialist mob. Since 2015, Bernie Sanders has been a threat to the political relevance of the Democratic donor class. Now, they’re out for revenge and hoping to bankrupt the socialist revolution once and for all.
Bernie Sanders wants to get rid of them. Amy Klobuchar is fine with them, but wants them to pay somewhat higher taxes. Joe Biden promises them that under him, “nothing would fundamentally change.” Tom Steyer is one of them and wouldn’t be in the race if he wasn’t but seems slightly embarrassed about it. Elizabeth Warren wants to break up the companies that made many of them in the first place. Michael Bloomberg is trying to become president largely on the basis of being one. It would take Pete Buttigieg thousands of years to become one at his past rate of adult wealth creation, and yet he seems to be their top choice.
And waiting across the aisle, Donald Trump claims he’s one of them, which, because he’s Trump, means he probably isn’t.
I’m talking about billionaires, of course.
The Democratic debate on Wednesday made it clearer than ever that November’s election has become the billionaire referendum, in which it will be impossible to vote without taking a stand on extreme wealth in a democracy. The word “billionaire” came up more often than “China,” America’s leading geopolitical competitor; “immigration,” among its most contentious issues; and “climate,” its gravest existential threat.
Ms. Warren dominated the night by framing Mr. Bloomberg’s campaign as a bid to “substitute one arrogant billionaire for another.” When Mr. Sanders later confirmed his view that billionaires should not exist, one of the moderators, Chuck Todd, asked, “Mayor Bloomberg, should you exist?” Mr. Bloomberg replied, “I worked very hard for it, and I’m giving it away.”
With the debate careening between billionaire loathing and billionaire self-love, Mr. Buttigieg warned against making voters “choose between a socialist who thinks that capitalism is the root of all evil and a billionaire who thinks that money ought to be the root of all power.”
As the veteran Washington watchers Jim VandeHei and Mike Allen, of Axios, have observed, billionaires are less a major topic of this race than the total atmosphere of it. It’s not just the politicians. From Jack Dorsey and Mark Zuckerberg to Jeff Bezos and Rupert Murdoch, billionaires are the captains of an economy whose cruelties have given this year its populist verve, the boogeypeople for some candidates, the bankrollers of others, and the owners of the platforms of persuasion.
So what should we do about them? Voters are being treated to a vast range of answers to that question — from “Let’s tax them down to mere millionaire status” to “Let’s put them in charge of everything A.S.A.P.”
The debate is testing abiding American assumptions. A country more ardently capitalist than most is asking itself, as seriously as at any time in the modern era, whether the ultrarich, just because they are ultrarich, endanger democracy. And a country just as committed, contrarily, to its founding ideal of equality is asking whether to resign itself to a gilded revolving door in which you unseat billionaire leaders you hate by electing billionaires you don’t mind.
These conditions make it at once utterly remarkable, and totally explicable, that Mr. Sanders, the junior senator from Vermont and a democratic socialist, has become the front-runner for the Democratic nomination — and that Ms. Warren’s debate performance this week resonated as much as it did. You wouldn’t know it from watching cable news, where pundits are often aghast at the tastes of regular people who think green rooms are just rooms that are green, but in recent years, anger at billionaires has risen to a boil. This is thanks to
- the financial crisis, to
- endless wars cheered on by corporate and media elites and to
- yawning inequality.
There is a growing sense that billionaires are not people who just happen to have drifted up from our midst, that in fact they are up there because they are standing on our backs, pinning us down.
Mr. Sanders and Ms. Warren, the senior senator from Massachusetts, have some meaningful differences of policy and personality. But the thread that connects their campaigns is their insistence that the “left behind” in America are not actually being left behind so much as stood on. They each seek to take the passive voice out of the grammar of American hardship: Your health insurance hasn’t somehow, mysteriously been made too expensive; your brick-and-mortar store hasn’t somehow, mysteriously been undercut. Someone did those things to you, probably by rigging the system to secure an undeserved advantage. And that person was probably a billionaire.
The degree of support for these ideas in 2020 is astonishing in a center-right country where, as John Steinbeck once wrote, explaining socialism’s limited growth in America: “We didn’t have any self-admitted proletarians. Everyone was a temporarily embarrassed capitalist.” It is a reflection of how fed up many Americans are with the old narratives about how, with a little pluck and patience, they too will rise. And it is a sign of a generational changing of the guard. As the (millennial) journalist Charlotte Alter, author of the new book “The Ones We’ve Been Waiting For,” told me, “Socialism is a generational Rorschach test: Boomers think of Soviet gulags and bad shoes, millennials think of Swedish health care and free education.”
In the mainstream of the Democratic Party, it has long been said that billionaires should pay more of their “fair share.” But, until recently, few would have questioned that you’d want more billionaires on the Forbes list, not fewer. Today a vocal chunk of the Democratic electorate is gravitating to a strikingly different conclusion: that America would actually be better off reducing its billionaire population through taxes and profit-trimming regulations.
(In fact, if I could ask one debate question, it would be this: Raise your hand if you would want there to be more billionaires at the end of your presidency than the start; raise your hand if you’d want fewer billionaires. Then, same question, but applied to millionaires. I think it would be revealing.)
Ballooning anti-billionaire sentiment is galvanizing billionaires. Some have been motivated to go on television to cast their critics as naïve and un-American. Others donate to centrist candidates like Mr. Biden, Mr. Buttigieg and Senator Amy Klobuchar of Minnesota, who serve a cocktail of down-home incrementalism shaken with wealth defense. But it took a special billionaire — Mr. Bloomberg, the former mayor of New York — to find a more direct way to thwart ascendant progressives. He is seeking to buy the election.
Just when the accountants thought they knew every tax-avoidance trick, here is the ultimate: become the leader of the free world. Of course, Mr. Bloomberg would say that he is running for an entirely different reason, which also happens to be very billionairey: He thinks he’s the only one with the wits and war chest to pull it off. “I alone can fix it,” as Mr. Trump once put it. It is something of a mantra for the billionaires.
There was never a way for Mr. Bloomberg to run as anything but Mr. Billionaire. The pitch he landed on was incorruptibility. “I will be the only candidate in this race who isn’t corruptible,” Mr. Bloomberg told an audience in Phoenix last November, “who isn’t going to take a penny from anyone, and will work for a dollar a year.” This was the best he could do: suggest that being a billionaire would make him more honest because billionaires are so rich they don’t have to listen to other billionaires.
One problem with this approach is that it is eerily similar to that taken by Mr. Trump, whose White House Mr. Bloomberg has called “besotted by lies, chaos and corruption.” As Larry Kudlow, a Trump adviser, put it in 2016, “Why shouldn’t the president surround himself with successful people? Wealthy folks have no need to steal or engage in corruption.” And Mr. Trump also said, “As far as salary is concerned, I won’t take even one dollar.”
The billionaire’s intrinsic incorruptibility is a curious pitch when you seek to run against a maybe-billionaire impeached for corruption. But even if we take Mr. Bloomberg at his word, the notion that being beholden only to your own opinions, and not those of many donors, deserves more scrutiny. Personally, I am not a fan of billionaires pumping any money at all into politics. But I would trust someone who has to juggle the different needs, moods and taboos of multiple billionaire donors over a billionaire who is accountable only to himself.
Mr. Bloomberg’s incorruptibility argument functions as a smokescreen. It can cause you to ignore that his basic enterprise — spending his personal fortune to flood the airwaves with an unprecedented deluge of ads, thereby ginning up votes and arguably purchasing the presidency — is the picture of corruption.
(When I texted my friend Alexander Theodoridis, a political scientist at the University of California, Merced, to ask if any scholarship could shed light on Mr. Bloomberg’s method of campaigning, he answered: “Most of the work on buying votes is about the developing world, which perhaps the U.S. is joining.”)
Yet, simply by running, Mr. Bloomberg is performing a valuable public service: illustrating to the public how billionaire influence complicates any challenges to billionaire influence.
As Alexander Burns and Nicholas Kulish have documented in these pages, Mr. Bloomberg is a dedicated philanthropist — and has leveraged his giving to develop “a national infrastructure of influence, image-making and unspoken suasion that has helped transform a former Republican mayor of New York City into a plausible contender for the Democratic nomination.” By giving away billions of dollars to nonprofit groups that fight for the most vulnerable, Mr. Bloomberg has made allies out of people who might otherwise be vocally against him.
This, too, is what is at stake in the billionaire referendum. Do we wish to be a society in which wealth purchases fealty? Are we cool with plutocrats taking advantage of a cash-starved state to run their own private policy machinery, thus cultivating the networks required to take over the state from time to time, and run it in ways that further entrench wealth?
Just this week, Mr. Bezos, the founder and chief executive of Amazon, announced his creation of a $10 billion fund to fight climate change. Once, such a gift might have been greeted with unmitigated gratitude. But now, rightly, people are asking about all the taxes Amazon doesn’t pay, about its own carbon footprint, and about whether any mortal should have that much power over a shared crisis.
This, too, is on the ballot this autumn. There are candidates who would leave undisturbed the opportunity to create wealth on that scale and who encourage the private solution of public problems. (One less thing for the pols to do!) And there are candidates who want the Bezoses of the world to have way less money, and who want citizens to trust that the government having that money instead will mean better solutions.
Never in our lifetimes has it been a prerequisite to have a take on billionaires in order to do your basic civic duty and vote. But it is now. Here are some questions no voter can avoid:
Do you think we shouldn’t have billionaires or should have many more — maybe you?!
Do you think being incredibly wealthy makes you immune to corruption, or prone to it?
Do you think it’s possible to empower those Americans locked in the basement of opportunity while helping billionaires do even better — a win-win? Or do you believe we need to take away a great deal of billionaire wealth to give millions a better life?
Do you trust a news media that sells advertisements to corporations owned by billionaires, and sometimes to billionaire candidates directly, to inform you properly about the level of power billionaires have and what to do about it?
Do you believe only a billionaire is qualified to solve the problems billionaires helped create? Or are you skeptical of the deployment of arsonists as firefighters?
Let’s face it. You’re unlikely to become one of the billionaires. But you can choose whether to resign yourself to living in their country — or to remind them that they live in yours.
A point-by-point exploration of their arguments would exceed the space allotted for this column by several thousand inches. But I think one can sum up the libertarian approach to Warren with a single question: How big a problem do you think billionaires, and the mega-successful corporations they helm, pose to the average American? Actually, come to think of it, I think that’s about how you’d sum up the question of Warren from any angle.
Which is why this debate ultimately matters to a lot more people than just some cranky libertarians: It speaks directly to a whole lot of young people who see that the economy doesn’t work for them the way it did for their parents and grandparents, and therefore conclude that somewhere along the way, the people it is working for — the barons of finance, the giants of Silicon Valley — must have rigged the system in their favor.
To be fair, they’re not entirely wrong. As Adam Smith once wrote, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” Bankers and tech executives very much included. So I find myself nodding in agreement with Wilkinson — and, by extension, with the progressive base of the Democratic Party — when he says: “Warren’s general diagnosis of the problem — it’s a rigged system of anticompetitive rent-seeking enabled by insufficiently democratic and representative political institutions — is broadly similar to my own.”
Yet they’re not entirely right, either. Are big corporations, or billionaires, or banks, or tech giants, or health insurers and pharmaceutical firms — to name some of Warren’s favorite targets — really the reason that young people are struggling
Sure, Warren may be eager to sic her Consumer Financial Protection Bureau on your mortgage lender if you fall afoul of some obscure clause, but that’s not the problem for most Americans. They’re much more likely to struggle with finding affordable housing in prosperous cities. In fairness, Warren does have a plan to ease the zoning regulations that cause the shortage — but for some reason she rarely talks about it on the campaign trail, possibly because it’s constitutionally dubious, but more likely because it would alienate her affluent suburban base.
Similarly, Warren is eager to forgive student loans — a $1.6 trillion transfer to some of the most affluent members of society — but not to attack degree creep, which has walled off most of the best jobs for those who hold a bachelor of arts while enriching a lot of colleges. She targets insurers and drugmakers, but not the hospitals and medical workers who drive most of our health-care costs.
Too many of her proposals are like this; they focus on corporate villains or billionaires while ignoring the much broader class of people that Richard Reeves of the Brookings Institution dubbed the “Dream Hoarders” — the well-educated upper-middle-class people who are desperate to pass their privilege onto their kids, and are unhappy about the steadily mounting cost of doing so. They’re Warren’s base.
Unfortunately, the Dream Hoarders — and I include myself in their number — are a much bigger problem for the rest of America than the billionaires whose wealth Warren promises to expropriate. Those billionaires got that way by building companies that disrupted cozy local monopolies, and they fund coding camps for high-school dropouts; Dream Hoarders
- protect their professional licensing regimes and
- insist on ever more extensive and expensive educations in the people they hire. Dream Hoarders also
- pull every lever to keep their own housing prices high — and poorer kids out of their schools — while
- using their wealth to carefully guide their children over the hurdles they’ve erected.
Which may be why the best predictor of a neighborhood with a low degree of income mobility is not the gap between the top 1 percent and everyone else — the gap that Warren focuses on with all her talk of taxing billionaires — but
If you really want to unrig the system, you need to focus less on a handful of billionaires than on the iron grip that the Dream Hoarders have on America’s most powerful institutions — including, to all appearances, Elizabeth Warren’s campaign.