How a playboy billionaire built a political army to defend his fossil fuel empire.
A few years ago, I was sitting in the book-lined study of an elegant condo with a view of downtown Washington, interviewing a former senior Koch Industries lobbyist about his job. I asked him what got him up in the morning when he worked for Koch. He gave me a one-word answer: “Carbon.”
At the time, I had been reporting for years on Koch Industries, one of the largest and most confusingly complex private companies in the world. Its annual revenue is larger than that of Facebook, Goldman Sachs and U.S. Steel combined, and it makes everything from gasoline to nitrogen fertilizer to nylon, paper towels and windows. For all this complexity, one business inside Koch Industries remains more important than the rest — processing and selling fossil fuels.
David Koch, who died Friday at the age of 79, is best known as a major funder of right-wing political causes, from tax cuts to deregulation, an enthusiastic patron of the arts and a man-about-town. But to his critics, his most lasting political legacy might very well be the rapidly warming world that he has left behind.
Koch Industries realized early on that it would be a financial disaster for the firm if the American government regulated carbon emissions or made companies pay a price for releasing carbon into the atmosphere. The effects of such a policy would be measured over decades for Koch. The company has billions of dollars sunk into the complex and expensive infrastructure of crude-oil processing. If a limit on greenhouse gas emissions were imposed, it could dampen demand for oil and diminish the value of those assets and their future sales. The total dollar losses would likely be measured in trillions over a period of 30 years or more.
Construction on the Koch political machine began in the 1970s, after Charles Koch took over the family company. He and David began funding and orchestrating a political project to restrain government power in the United States through lobbying, think tanks and political donations. The effort accelerated in the 1990s after a Senate committee, following a long investigation, accused Koch Industries of stealing oil from Native American reservations where the company was operating. That experience convinced David and Charles Koch that they needed to have a stronger presence in Washington to fend off their critics.
The machine reached full fruition in 2008, when Barack Obama was elected president. The machine is so effective because it is multifaceted. In addition to one of the largest registered corporate lobbying offices in the country, located about two blocks from the White House, there is a constellation of Koch-funded think tanks and university centers. They all convey a consistent message: that government programs can only cause more harm than good and that market forces alone must shape human society. And their work is bolstered by a private network of donors that David and Charles Koch assembled over the years, a network that gives donations at levels rivaling a political party.
Finally, Koch controls a “boots on the ground” army in the form of Americans for Prosperity, a network of employees and volunteers who knock on doors, attend rallies to protest climate change legislation, and visit the offices of any lawmakers who seem likely to cross Koch Industries on the issue.
This machine has been employed to great effect to ensure that no government action is taken to control greenhouse gas emissions. In the early 1990s, President George H.W. Bush made it clear that he would support a treaty to limit carbon emissions. The Republicans even had a market-based solution to tackle the problem, a system called “cap and trade” that put a price on pollution and allowed companies to buy and sell the right to pollute. Cap and trade had been used to great effect to reduce power plant pollution and acid rain. But in 1991, the Cato Institute, a Koch-funded think tank, held a seminar in Washington called “Global Environmental Crises: Science or Politics?” This was part of a decades-long effort to cast doubt about the reality of climate change.
David Koch worked tirelessly, over decades, to jettison from office any moderate Republicans who proposed to regulate greenhouse gases. In 2009, for example, a South Carolina Republican, Representative Bob Inglis, proposed a carbon tax bill. KochIndustries stopped funding his campaign, donated heavily to a primary opponent named Trey Gowdy and helped organize teams of Tea Party activists who traveled to town hall meetings to protest against Mr. Inglis. Some of the town hall meetings devolved into angry affairs, where Mr. Inglis couldn’t make himself heard above the shouting. Mr. Inglis lost re-election, and his defeat sent a message to other Republicans: Koch’s orthodoxy on climate rules could not be violated.
Mike Pence, who was then a congressman in Indiana, and others soon signed a “carbon pledge” circulated by Americans for Prosperity, which effectively prohibited the government from putting a price on carbon emissions. Those efforts and others effectively derailed the effort to pass a cap and trade plan for greenhouse gas emissions in 2009 and 2010. In 2009, the level of atmospheric carbon concentration hovered around 370 parts per million. In the decade since, levels have surpassed 400 parts per million, the highest level recorded in human existence.
Since the 2016 election, and in the face of more urgent scientific warnings about climate change and a growing popular movement for action, the Koch network has tried to build a Republican Party in its image: one that not only refuses to consider action on climate change but continues to deny that the problem is real. Just this week, Senator John Cornyn, Republican of Texas, dismissed data about climate change by pointing out on Twitter: “It’s summer.” In doing so, he reflected the politics of a party — and a world — that has been profoundly shaped by David Koch.
Shays-Meehan would limit spending in House races to $600,000. In 1996, every House incumbent who spent less than $500,000 won compared with only 3% of challengers who spent that little. However challengers who spent between $500,000 and $1 million won 40% of the time while challengers who spent more than $1 million won five of six races. The McCain-Feingold bill, which sets spending limits in Senate races, would yield similar results. In both 1994 and 1996, every challenger who spent less than its limits lost, but every incumbent who did so won.
This anecdotal evidence supports comprehensive statistical analysis: The key spending variable is not incumbent spending, or the ratio of incumbent to challenger spending, but the absolute level of challenger spending. Incumbents begin races with high name and issue recognition, so added spending doesn’t help them much. Challengers, however, need to build that recognition. Once a challenger has spent enough to achieve similar name and issue recognition, campaign spending limits kick in. Meanwhile the incumbent is just beginning to spend. In other words, just as a challenger starts to become competitive, campaign spending limits choke off political competition.
In a new book, Steve Kornacki looks back at the 1990s — and finds the roots of today’s polarization in the Clintons’ ascent.
.. the 1990s was until recently an invisible decade. “The holiday from history,” it was called, a “lull” where nothing much really happened, a candy-colored coma between the Berlin Wall’s fall on 11/9 and the 9/11 attacks less than a dozen years later.
.. The Red and the Blue, is a political procedural that sets out to explain how we went from giga-landslides in the ’60s, ’70s, and ’80s to Electoral College squeakers today, how Republicans disappeared from the coasts and Democrats died their final deaths in the South and Midwest.
.. it benefits from the context provided by Trump’s ascent, which has clarified that one big reason we’re seemingly reliving the 1930s today is because both the Left and Right spent the 1990s and early 2000s rehashing the culture wars of the 1960s and early ’70s.
.. Because cable and the Internet have so completely transformed American culture over the past two or three decades, it’s easy to forget (and younger people can’t even remember) just how norm-shattering Bill Clinton was, compared to the Greatest and Silent Generation leaders who came before him. To social conservatives and foreign-policy hawks, Clinton’s election was downright triggering, and deserved nothing less than full-on #Resistance. Historian Steven Gillon famously interviewed one who succinctly fumed that Clinton was “a womanizing, Elvis-loving, non-inhaling, truth-shading, draft-dodging, war-protesting, abortion-protecting, gay-promoting, gun-hating Baby Boomer!”
.. aside from Gary Hart, whose ill-fated career was recently reexamined in the Jason Reitman movie The Front Runner, America hadn’t had a youthful, truly sexualized major-party presidential nominee since JFK — until Clinton came along.
- .. The Federal Reserve’s preference for financialization and neoliberalism was at its very peak under the influence of Paul Volcker and Alan Greenspan.
- Nearly half of Americans still thought “sodomy” — never mind same-sex marriage or civil unions — should be illegal.
- And while America was pro-choice, huge percentages of voters demanded restrictions to abortion-on-demand.
The Red and the Blue gives an excellent Gen-X-plaining of just how systemically, institutionally, and culturally impossible it would have been for Democrats to move even farther leftward than they did back then — of how much damage their “too far left” brand had done to the party in the ’80s and of the disastrous political consequences of Bill Clinton’s attempts to govern from the left in 1993–94, as epitomized by Hillary’s attempt at health-care reform. He reminds his readers with his trademark aptitude for facts and figures that America in the 1990s was still very much living in what Sean Wilentz called The Age of Reagan.
.. He manages, for example, to nail the most salient point of the abusive relationship between Bill Clinton and Newt Gingrich: that it was at heart a love story, and/or a co-dependency worthy of Dr. Phil. One man could simply not have managed to stay in office without the other.
.. It was Clinton hatred on the social right that gave us Gingrich, and it was Gingrich’s surefire ability to trigger the libs that protected Clinton year in and year out. “Do you want him – or me?” became the basic campaign pitch of both men.
.. his Officer Friendly approach to the media is just too naïve by half, especially for someone who is a cable-news host with considerable experience in online journalism. In Kornacki’s telling, reporters merely report, offering just the facts or serving as quickie Greek choruses and footnote sources. This might work for a tenth-grade term paper, but for a book that seeks to illuminate the decade that saw the rise of the Internet, the birth of Fox News, unprecedented media consolidation, and what Eric Alterman called “the punditocracy” at the height of its influence, it’s entirely inadequate.From highly influential anti-Great Society “Atari Democrats” like
- Michael Kinsley,
- Joe Klein,
- Sidney Blumenthal, and
- Robert Samuelson and proudly un-PC pundits like
- Camille Paglia,
- Ben Wattenberg,
- Bill Maher, and
- Andrew Sullivan to donor-funded think tanks like
- Heritage and
- Cato, an entire intellectual infrastructure was shaping the national narrative for what became Third Way Clintonism well before the Clinton era began. Yet most of these people and institutions do not even appear in Kornacki’s index, or if they do, they’re curtly dispensed with in one or two lines.
.. It’s possible that with Donald Trump’s attacks on the press (and with some people using criticism of “the media” as an anti-Semitic dog whistle), Kornacki didn’t want to even go there.
.. But a book on 1990s polarization that omits Steve Jobs, Roger Ailes, and Bill Gates from its index? One that effectively ignores the O.J. trial, Maureen Dowd’s gendered, campy, sexist (certainly by today’s standards), Pulitzer-winning coverage of Monicagate, and Clarence Thomas vs. Anita Hill?
.. writers as far apart as Ann Coulter and Eric Alterman blamed Al Gore’s loss in 2000 on the media’s hatred of him (and his hatred of them)?
.. Limbaugh’s pioneering tactic (soon perfected by Gingrich, Coulter, and Karl Rove) of branding anyone whose politics were even slightly to the left of, say, Sandra Day O’Connor or Dianne Feinstein, as a Loony Liberal, Radical Leftist, or Femi-Nazi. From Clinton and Dubya well into the Obama years, red-meat conservatives intentionally fuzzed the line between corporate social-liberals and the true hard left of Michael Moore, Pacifica Radio, and Thomas Frank, and Kornacki captures their strategy perfectly... Aside from the Obamas themselves, no other politician would even remotely disrupt or challenge Clintonistas’ hold on the Democratic party for another ten or 15 years. But Clintonism could only continue as long as the true far-left remained repressed, and as long as the economy kept humming... When a fist-shaking socialist senator from Vermont lined up an army of Millennials in formation behind him eight years after the dawn of the Great Recession caused in no small part by Clinton-era financial policy, it became crystal clear that Newt Gingrich had won the war... When they exited the White House, the Clintons left behind a Democratic party that working class, rural, and/or religious whites had become almost allergic to, one more dependent on African-American and Latino voters than ever... Donald Trump cruised to triumph in 2016 using all of the dog whistles and wedge issues that Gingrich, Rove, Buchanan, and Ross Perot had refined to perfection... And just as education-conscious, socially liberal white professionals reacted against Gingrich’s and Buchanan’s reactionary rhetoric in the late ’90s, Trump’s Republican party has now been effectively evicted from places as once-synonymous with the GOP as Long Island, Maine, New Jersey, San Diego, and Orange County.
Most climate models predicted warming above the mid-20th-century average of about 1 degree Celsius by 2016. They were right. Atmospheric scientists predicted increased frequency of extreme-heat events, and they were right, too. Scientists also predicted warming would be most apparent in East Asia and the Arctic, and it is.
These results aren’t surprising, given that they are based on many independent data sets. Measurements are collected by towers, buoys, aircraft, satellites and more, and are assessed by thousands of scientists world-wide.
.. It’s a sign of the reliability of this research that the insurance industry, with trillions in liability at stake, uses it to determine financial models. Most businesses can’t afford to have “political” opinions about climate change. For companies facing potential impacts from climate trends, to deny warming would be like Macy’s pretending online shopping isn’t disrupting retail.
.. Onetime climate skeptic Jerry Taylor, a former vice president of the Cato Institute, changed his views when he reread Mr. Hansen’s testimony and realized its predictions were “spot on.”.. Climate change is a byproduct of the prosperity created by the market economy, but the market similarly can be an engine to generate cost-effective solutions. Clean-energy technologies such as wind and solar power already have developed immensely in the past two decades. Public policy that puts a price on carbon emissions would speed the adoption of clean energy by exposing the market to the costs this pollution puts on society. This will accelerate adoption of and private investment in clean-energy technologies.
Though climate change presents American industries a daunting challenge, market-based policies can unleash innovation from investors, inventors and entrepreneurs, who will work to build a more prosperous and safer future. Working with accurate scientific facts and the right incentives, the market will find winning solutions.
David Kopel, associate policy analyst at the Cato Institute, evaluates prospects for changes to federal gun laws following the shootings in Newtown, Connecticut.
The biggest challenge facing free societies today is our lack of belief in them. I am seeing too many self-inflicted wounds, most of all the recent democratically derived decisions in the United Kingdom and the United States.
.. It’s interesting to see that the countries that are doing fine, such as Canada, are those which in their cultural DNA never pushed that hard on libertarian ideals in the first place (though I would argue that Canada is implicitly fairly libertarian).
.. global authoritarianism is probably poisoning our political climate more than many people realize.
.. what is the most important reason for optimism about a free society?
I think it is talent and human capital. Today there is more mobilized talent than ever before, by a wide order of magnitude. More people are protected from the ravages of malnutrition and severe childhood diseases, more people get educated, and more learn from the internet. Furthermore, there is more opportunity for that talent. Say it is 1970 and you are a potential math or science genius born in India. What is the chance you can bring your talents to fruition?
.. I fear that libertarians have their own version of the Progressive myth. Progressives often believe that ever-growing tolerance and health insurance coverage are the future, if only bad Republicans could be defeated in political battle.
.. many of the dangers come .. a kind of old-style authoritarianism, souped up by the clever use of social media.
.. That war, using that word in the broadest sense possible, will be between today’s amazing accumulated stock of human capital — and the emotional momentum behind authoritarianism, which is encouraged by the political fraying that stems from underlying fears of disruption.
The ObamaCare regulations it retains are already causing insurance markets to collapse. It would allow that collapse to continue, and even accelerate the collapse. Republicans would then own whatever damage ObamaCare causes, such as when the law leaves seriously ill patients with no coverage at all. Congress would have to revisit ObamaCare again and again to address problems they failed to fix the first time around. ObamaCare would consume the rest of Congress’ and President Trump’s agenda. Delaying or dooming other priorities like tax reform, infrastructure spending, and Gorsuch. The fallout could dog Republicans all the way into 2018 and 2020, when it could lead to a Democratic wave election like the one we saw in 2008. Only then, Democrats won’t have ObamaCare on their mind but single-payer.
.. It is likely that the number of states participating, and the number of people enrolled in the Medicaid expansion will be higher after “repeal” than before.
.. Currently, Congress matches states’ spending on their Medicaid programs. When a state spends $1 on its program, Congress contributes between $1 and $3. This creates a pay-for-dependence incentive. It encourages states to expand both enrollment and benefits far beyond what they would if states bore the full marginal cost.
.. Just as ObamaCare’s Medicaid expansion creates incentives for states to expand their programs to able-bodied adults, while reducing access to care for the aged, blind, disabled, children, and pregnant women, the House leadership bill would create (or preserve) an incentive to expand enrollment to less vulnerable populations while cutting benefits for more vulnerable populations.
.. ObamaCare’s community-rating price controls literally penalize insurers who offer quality coverage to patients with expensive conditions, creating a race to the bottom in insurance quality.
.. The leadership bill would modify ObamaCare’s community-rating price controls by expanding the age-rating bands (from 3:1 to 5:1) and allowing insurers to charge enrollees who wait until they are sick to purchase coverage an extra 30 percent (but only for one year).
.. ObamaCare would continue to make it easier for people to wait until they are sick to purchase coverage, and the law would continue to penalize high-quality coverage for the sick.
.. Though they sound like tax cuts, ObamaCare’s tax credits are actually 94 percent government outlays and only 6 percent tax reduction.
.. This means that if the House bill ever makes its way to President Trump’s desk, it could subsidize abortion even more than ObamaCare does.
.. Conservatives deny any similarities between an individual mandate and a tax credit for health insurance. But consider the following. ObamaCare’s individual mandate penalty for single adults is $695 or 2.5 percent of income, whichever is greater. Suppose that instead, Congress had simply enacted a tax with those features, and then come back and provided an equivalent tax credit for anyone who purchases health insurance. The end result would be identical to ObamaCare’s individual mandate. But which would it be, a tax credit or a mandate?
.. The parts of the country that stood the most to gain from ObamaCare swung the most to President Trump.
.. Making health care better, more affordable, and more secure requires first repealing all of ObamaCare’s regulations, mandates, subsidies, and taxes. Next, Congress should block-grant the Medicaid program, giving each state a fixed sum of money that does not change from year to year, combined with full flexibility to target those funds to the truly needy. (If states want to cover less-needy populations, like able-bodied adults, they can pay 100 percent of the marginal cost of that coverage.)
.. Large HSAs would be a larger effective tax cut than the Reagan and Bush tax cuts combined, adding $13,000 to the wages of a typical worker with family coverage. Large HSAs would drive down prices by making consumers cost-conscious at every margin, and would reduce the problem of preexisting conditions by freeing consumers to buy portable coverage that stays with them between jobs.