The Billionaires Hit The Panic Button

Bill Gates is thinking about voting for Donald Trump, while Mike Bloomberg intends to vote for himself.
Bill Gates (left) and Michael Bloomberg hold a press conference to announce their charitable support for a global anti-smokin
Bill Gates (left) and Michael Bloomberg hold a press conference to announce their charitable support for a global anti-smoking initiative on July 23, 2008, in New York City.

Since early summer, Sens. Bernie Sanders and Elizabeth Warren have been drawing huge crowds to their rallies, dominating the televised debates, and setting fundraising records with support exclusively from small donors. Most importantly, their surging popularity stems from their plans to dramatically expand the federal government, paid for in large part through a wealth tax. This populist turn has the rest of the Democratic presidential field scrimmaging for what’s left — namely, the support of the party’s super-rich. 

The problem for all of the candidates ― from Sens. Cory Booker to Kamala Harris to Amy Klobuchar ― is that what makes billionaires swoon makes 99% of the country furious. As a result, nobody has come close to matching Sanders and Warren’s collective appeal. South Bend, Indiana, Mayor Pete Buttigieg remains in the realm of respectability, and former Vice President Joe Biden continues to float on name recognition, but neither candidate looks like a solid winner. With the rest of the gang mired in the single digits, the super-rich are beginning to panic. First, billionaire Tom Steyer and now, fellow plutocrat Michael Bloomberg decided to abandon the kingmaker facade altogether and get in the race themselves.

Their desperate bids for the presidency make one thing crystal clear: The 2020 Democratic primary is a referendum on billionaire control of the Democratic Party. At least we can all stop shadow-boxing with the word “moderate.”

Bloomberg has no better chance of becoming president than Howard Schultz, the Starbucks CEO who assembled a campaign operation in January and gave a few disastrous interviews before quietly abandoning his quest. His prospects are also no better than those of ultra-millionaire John Delaney (D-$232 million), who has been steadfastly campaigning in futility in Iowa all year. Bloomberg may well accomplish nothing more than siphoning a few points away from Buttigieg and Biden, ultimately bolstering the very candidates he hopes to crush, namely Sanders and Warren.

But the fact that so many super-rich folks are even trying to get into the primary has surfaced a long-brewing contradiction at the heart of the modern Democratic Party, one that’s made the party uniquely vulnerable to President Donald Trump’s buffoonish demagoguery. Most Democrats think of themselves as champions of the little guy. We’re the party of working people and people of color. The Republicans, we like to tell ourselves, are the party of the rich ― silver-spoon 47%-bashers like Mitt Romney and racist rentiers like Trump. 

That story papers over the fact that both parties have courted and favored America’s super-rich, over and against the interests of the rest of the country.

Sure, there are differences. Republican politicians will defend any lowlife whose bank book is big enough, from payday lenders to Wall Street CEOs. Democrats, by contrast, court nicer, more progressive-seeming elements of the super-rich. Harvey Weinstein, for instance.

During Bill Clinton’s presidency, when incomes were elevated by an epic stock market bubble, this contradiction could be tolerated, even celebrated. But it is not tenable after the joint debacles of the 2008 financial crisis and the foreclosure-infested recovery. One vision has to win out. Democrats can either be the party of the people or they can be the party of what more refined elements of the upper class deign to bestow upon the people. They cannot be both.

Many onetime Democratic billionaires are beginning to read the writing on the wall. Instead of embarking on a doomed mission to win the party’s nomination, Nice Guy Billionaire Bill Gates left open the possibility that he would support Trump in 2020 if Warren is the Democratic nominee. “I’m not sure how open-minded she is ― or that she’d even be willing to sit down with somebody who has large amounts of money,” Gates said of the candidate.

You can understand his ambivalence. On the one hand, Trump puts refugee children in cages and separates them from their parents, dooming many families to permanent estrangement. On the other hand, Warren has proposed a wealth tax of 2% on fortunes of $50 million or higher (3% for those exceeding $1 billion). 

Speaking at a New York Times conference, Gates joked that Warren’s tax would have cost him $100 billion over the last several decades ― which would have left him with ... almost $7 billion. Gates’ math was bad, as Warren’s campaign cheekily noted by rolling out a billionaire tax calculator. But he did, in fact, grasp the essence of what Warren had in mind. If her wealth tax had been in effect since 1982, Gates would be worth about $13.2 billion today, instead of the $107 billion he actually controls.

Back in 2014, when Gates read Thomas Piketty’s groundbreaking “Capital in the Twenty-First Century,” he concluded that the French economist was onto something. Inequality really was out of control, and it wasn’t going to be corrected by the magic of the market. But he stopped short of endorsing Piketty’s policy prescription of a wealth tax. A better plan, Gates insisted, would be to tax luxury consumption. This would punish the super-rich for living lavish lifestyles without discouraging the use of their fortunes for “philanthropy.”

The trouble, of course, is that what Gates calls philanthropy is a nice-sounding name for democratically unaccountable capital. And Gates himself is a useful example of just why it’s such a bad idea to leave billions of dollars in the hands of single individuals. 

At the Times conference, Gates was asked why he had met repeatedly with financier Jeffrey Epstein even after Epstein was convicted as a sex criminal. “I made a mistake in judgment,” Gates said. “I thought those discussions would lead to billions of dollars going to global health. Turned out that was a bad judgment. That was a mirage. None of that money ever appeared. And I gave him some benefit by the association.”

In a democracy, of course, you don’t need to flatter human traffickers to obtain money for public health. You can even put human traffickers in prison. If you need money to pay for social services, there are always taxes. A tax on fortunes of $50 million or more, for instance.

But Gates wasn’t finished. His foundation operates a program called the Giving Pledge, which celebrates gazillionaires who leave their fortunes to charity. It’s a tricky operation, he told the Times, particularly when an applicant has what Gates called “a questionable fortune” that “may have been derived improperly.” He wants to encourage rich people to be charitable, but he doesn’t want to put a seal of approval on people who got their money through piracy.

“I feel bad,” Gates said. “We probably will at some point accept someone into the Giving Pledge and it’ll turn out that their fortune is a disreputable fortune.”

But what Gates misses is that there are no reputable personal fortunes measured in the billions of dollars. Behind every great fortune is a great crime, and the ability to amass billions is never due to one genius idea or product, but to the ability to distort the political system in your favor. Even Gates made his money flouting U.S. antitrust law. And the foundations to which billionaires commit their fortunes are not charities, but essentially private governments that organize the resources of the planet and the policies by which those resources are allocated.

For Bloomberg, controlling a private government is not enough. He wants the public government too. And his candidacy gives Democrats a very clear choice. They can have billionaires or they can have democracy.