One thing that very rich people are good at is managing risk. If they make a judgment that the political tide is turning against them, they will seek to make a deal. Now is the time to mentally prepare ourselves to reject that deal.
Once people reach a certain level of wealth, their full time job becomes, in essence, maintaining that wealth. To maintain a great fortune, you must be attuned to not just the business world and financial markets, but to global political trends as well. As the Wall Street Journal’s hearty approval of fascism goes to show, the rich are concerned with politics primarily to the extent that it impacts their fortunes. They will tend to do everything they can to maintain what are euphemistically known as “business-friendly” or “pro-growth” elected officials, which in America means Republicans; when the pendulum swings left, they will attempt to do the next best thing: pull the Democratic party to the center, by discrediting the left and empowering “moderates.”
This is coming. Be ready.
The crisis of economic inequality has destabilized a decades-long set of accepted conventional wisdom about national politics. Anti-establishment sentiment is strong. That got us Donald Trump. Donald Trump, a buffoon, is unpopular. Leftist politics are experiencing an upsurge in popularity. You and I may be happy about this, but for billionaires, this is a worrying development. It is easy to keep tabs on what the very rich are worried about by reading the media outlets that they tend to read and keeping track of what the Davos set is discussing. Alexandria Ocasio-Cortez is on the cover of Businessweek. A 70% top marginal tax rate is beginning to be discussed not as fantasy, but as a plausible policy position in the upcoming Democratic primary. Ray Dalio, a prominent billionaire investor, is warning that her ideas are catching on. (Note: Ocasio-Cortez is the most prominent national advocate of a set of inequality-fighting ideas that have been around for years. Rich people have long been able to dismiss these ideas, because they were less prominent in the mainstream media, and since they see her saying these things, they may assume that she, personally, is their main problem, when in fact the ideas themselves are. Whatever.) Another billionaire investor, Seth Klarman, is warning that “constant protests, riots, shutdowns and escalating social tensions” are increasing investment risk. Rich people know that we have entered an era of populism; they know that right wing populism as practiced by Donald Trump and the Brexiteers is proving to be not so popular; and they see socialists gaining real traction in the political left in America.
Going into the 2020 presidential election season, the rich will have to make a risk-based calculation. The Republican party, traditionally their safe harbor, is now led by Trump, who is racist, narcissistic, stupid, unpopular, and—worst of all, from their perspective—unpredictable. He can do dumb things that will fuck up their money. And if they back him and he loses, they lose influence. It is becoming fairly clear that for the majority of the very rich, who care about politics more in terms of a business proposition than an ideological one, the smart move will be to try to get in with the Democrats and soften the blow. If you truly believe in fighting inequality, know this: the siren song of the billionaires is coming. The offer to help you defeat Trump is coming. And it will come with very meaningful strings attached.
The best case scenario for the rich would be to empower a Democrats who will look out for their own interests and fend off the lefties. That may be Mike Bloomberg, who is considering a run, or it may be Joe Biden, or it may be one of the many less prominent candidates who decides that they can create their own unique space in a crowded field by signaling that they are the ones that rich people should lavish with funds. You can expect that at least one Democrat will become The Chosen One, and the billionaire class will use them to try to head off Bernie Sanders and Elizabeth Warren, either of whom would be Wall Street’s nightmare. At the same time, you will see billionaires begin to make calculated “enlightened” public statements about the need to address all of this unfortunate inequality. You will see calls from rich people for moderately higher taxes. You will see calls from rich people for better school funding, and for climate change initiatives, and perhaps for some moderate forms of financial regulation. These people understand that the inequality issue has gained enough prominence that we must at least appear to be dealing with it. It is smarter for them to look genuine and concerned by offering up their own moderate (and inadequate) set of solutions than for them to fight endlessly against any tax increase and create such a backlash that Ocasio-Cortez gets her way.
The billionaires’ compromise offer will come. It will come in a handsome, well-designed package, with the best marketing that money can buy. It will sound superficially attractive. It will be made to sound like a win for those on the left—at last, you have forced the rich and powerful to compromise. It will be presented as the best deal that we can get. All of the moderate, responsible pundits will be for it. As will the moderate, responsible power brokers of the Democratic party. They will tell you that you are crazy if you let this opportunity slip through your fingers.
Don’t fall for it. Any deal that lets billionaires continue to have a billion dollars is a scam. Our job is to force them to do the right thing, not to let them dictate the terms.