Politics among the Billionaires

Imagine yourself as a billionaire in 1981.  Ronald Reagan has just been elected.  You’ve parked one of your billions in Treasury bonds—a solid, conservative investment backed by the full faith and credit of the US Government.  The rate is 10% per annum.  From those bonds alone you’ll make $100 million per year.  That’s your good news.  The bad news is that your income tax obligation to the IRS will be $70 million leaving a net of only $30 million in your pocket.  But you’re in luck.  History will show that you’re in for better times.

The rest of us in 1981 knew only that President Reagan had an attitude—taxes were too high, regulations were too numerous and the Government was our biggest problem.  But you, as a billionaire, had supported his campaign with the hope of cashing in on his libertarian ideals—looking to get that 70% marginal tax rate down around 50% at the very most.  And, as history did show, Ronald came through.  By the end of his two terms as president the IRS demands had flipped: the marginal rate was down to 28% and $72 million stayed in your pocket!  An additional profit of $42 million!  The arithmetic of politics had obviously changed!  The wealthy of America could see clearly that an ultra-conservative, libertarian ideology produced a substantial upswing in tangible, after-tax results and, according to the recently published book “Dark Money”, the game of politics made a quick right turn back towards the policies of the  Gilded Age of the 1890’s.

Jane Mayer’s ”Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right” tells the billionaires’ story—how you and other ultra- wealthy Americans rallied around the Reagan Revolution, how it was organized, why and how much you donated, where the money was spent, what you expected in return, how you’ve benefited so far, and what your ambitions are for the 2016 election and beyond.  It’s a gripping tale: a nice bit of investigative reporting.  It is a sad prognosis for the non-wealthy classes, but, whether true or not, it certainly explains the campaigns we’ve seen in 2016.  The GOP candidates are making sure to honor the politics of Reagan.  They, and all the Democrats, except Sanders and his followers, steadfastly disavow any obligations to their big donors, while all struggle to accumulate the money they know they’ll need to ultimately gain favor with the American voter.  The big picture seems clear, and “Dark Money” fills in many of the details:  why, after each election, the US Congress seems to ignore the actual desires of American voters, how the Supreme Court, with decisions such as  Citizen’s United, unleashes the political power of big business,  or how the Congressional districts got gerrymandered, or …  The list goes on as each seemingly irrational or mysterious political development is related to the flow of large amounts of money from those who can afford it and who benefit most directly by the results.  

Mayer’s book follows primarily the activities of three well-endowed foundations, the Olins, Scaifes and Bradleys, and the fortunes of the now famous Koch Brothers.  Lower taxes and fewer regulations remain their most important political objectives.   Their efforts are built primarily around implementing the libertarian ideology and boosting its acceptance among “We, the People”.   From the billionaire’s perspective, Reagan’s  task, or that of any politician, was simple:  get into office, cut taxes  and keep the government out of the free market.  Meanwhile, the Kochs work on the structure underlying the bigger picture.  They and other billionaires charge themselves with cultivating the proper line of thinking, setting the agenda, and selecting and supporting ‘right-thinking’ candidates.  Among the actual voters, they generally denigrate government and brighten the appeal of their free market alternatives.  For, ultimately, the voter must learn to love their program.  Herein lies the most interesting part of Mayer’s book.  How does one convince an ordinary citizen to align their self-interests with those of the billionaires?  

“Dark Money” prepares the reader well for its last and most interesting chapter: “Selling the New Koch: A Better Battle Plan”.  The book takes us to a five-star oceanfront resort, along with the invited big donors, to learn more about “The Long-Term Strategy: Engaging the Middle Third.”  Their challenge is to address their poor performance in 2012 and the surprising ineffectiveness of the big money in that election.  The analyst is Richard Fink, Charles Koch’s “grand strategist.”  He begins with an obvious fact: “We libertarians have an image problem.  The voter sees us as greedy and simply out for ourselves.”  “That might be true”, he notes, “however, we still need their vote!”  From there, the logic gets a bit convoluted but Fink’s message is clear:  “We must convince these voters that we mean well and that we’re good people.”

The amount of money in the 2016 election is expected to set records.  Both parties and the SuperPACs will be championing their candidates.  But mingled with that scene will be the Kochs, their “Battle Plan”, their extensive network of political activities, and the $889 million pledged to fuel the effort.  The script will be “good people” playing down the greed and shining up the libertarian image.  “Dark Money” will help you follow their cynical campaign.

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terry@vashonloop.com