Cutting out the Middlemen: the Billionaire Government

Cutting out the Middlemen: the Billionaire Government

[This post was first published in the WV State Journal in January, 2017]

There so much going on in our government right now, it’s hard to keep up. We expect a dramatic shift from the Obama Administration to the Trump Administration next year. In fact, the desire of key voting blocs in our country for major change drove the election result. It seems very clear already that a major change is what we are going to get, but the question is: changes to what, and in what direction.

Our country has worried about the effect of money in politics for some time. Bernie Sanders warned about the “billionaire class” buying politicians and using the government to expand their fortunes by squeezing working people even harder. That message carried him almost, but not quite, to the Democratic nomination last spring.

In a break with establishment Republicans, who downplayed the money issue, Donald Trump tapped into the Sanders message too. Of course, he wouldn’t directly attack billionaires, since he claimed to be one, but he said “special interests,” “Wall Street,” and “Goldman Sachs” had bought the government out from under the people, and he would give it back, because he “didn’t need their money.” That message put him over the top in Wisconsin, Michigan, Pennsylvania and other crucial battleground states.

This raises two questions worth talking about before the year ends. The first question for all of us is: will the new President deliver? The second, for Democrats is: how did we lose the “money in politics issue?” The clues are all over the place.

On question one, look at President-Elect Trump’s cabinet. So far, his proposed nominees are worth over fourteen billion dollars. At least three Goldman Sachs bankers have received plum appointments on his team. The President of Goldman Sachs, Gary Cohn, will lead Trump’s National Economic Council. Steve Mnuchin, a Goldman banker, will be Treasury Secretary. Fellow Goldman alum Steve Bannon will be Trump’s “Chief Strategist.”

Betsy Devos, tapped for Education, is worth over five billion dollars. Todd Ricketts, headed to Commerce, inherited the TD Ameritrade fortune. Investor Wilbur Ross has three billion. Trump has said he wants people who were great business successes, and that’s why he picked these people. But DeVos married her money, and Tom Ricketts inherited his. That’s as fair as it may be, but neither are entrepreneurs nor innovators. They are just very rich.

Used to be, we worried that very rich people would buy politicians and influence them to do favors for the rich at the expense of the working man. It seems that a group of very rich people have decided to cut out the middleman, and simply assume direct control of the government. How will they use their power?

It could be that, free from the need to make any more money, they work hard helping ordinary Americans. But you have to worry about how none of these people has any track record of doing that. These folks gained and expanded their wealth at the expense of ordinary Americans. Mnuchin, for example, made his money preying on depositors at banks during the foreclosure crisis; taxpayers later picked up the tab.

DeVos’s husband’s family business, Amway, is a notorious pyramid scam, wherein 99% of those who open Amway “businesses” never earn a profit, while top-dogs like the DeVoses make billions. Ameritrade, which Ricketts inherited, has been fined millions for illegal securities dealings.

Of course Goldman Sachs has done so many deals at the expense of ordinary Americans it has been called a “vampire squid” sucking the blood out of working people for decades. Trump himself railed against them, before hiring them. Goldman’s double dealings were at the heart of the 2007 financial crisis, when millions lost their homes, and from which many working people have still not recovered.

Trump’s idea appears to be that the utter ruthlessness and greed of these people will now be deployed to help regular people. “They work for us now!” To quote Doc Holiday, “they are daisies if they do.” They will have the other option, though, of using their now unchecked power over government to make even more money, by taking even more from regular Americans. We’ll have to see.

The second question: how did the Democrats let themselves lose the very issue that Sanders mobilized millions to care about? It certainly isn’t as simple as “they didn’t pick Sanders.” There were plenty of Democrats who could have carried that banner effectively. The problem was that Hillary Clinton was not one of them.

A significant chunk of the Democratic Party’s establishment has become so attached to the same bankers and billionaires, taking their money for campaigns, for speeches, and nominating them to positions in government too, that they’ve lost all credibility on the issue of money in politics. Chuck Schumer, Nancy Pelosi, and the Clintons are at the eye of that storm.

They’ve been to so many parties, and taken so much money from so many rich people, just like those Trump is now filling the cabinet with, that they are powerless to object. They can’t make the case that we shouldn’t turn the government over to these rich folks, because that’s what they’ve been doing too. That it may be to a greater or lesser extent doesn’t matter: they have unclean hands.

For now, all we can do is hope that Trump is right, and that the vampire squid and its friends decide to suddenly fight for the common men and women. But if he’s wrong, and we are watching the billionaires take over the government for the sake of their own profits, the Democratic Party is going to have to clean its hands before the next election.The Party cannot be half for the working people and half for the billionaire class. It must choose one or the other. By refusing the big money donors and basing his campaign on individual donations of about $27, Sanders showed the way. If Democrats cannot take that lesson, they will find themselves cut out of the deal permanently.