The most memorable moment of the debate between Joe Biden and Bernie Sanders — the one that drew a bright line between them — was an exchange about the role on money in politics. Returning to a common theme that he has hammered home throughout his career, Sanders recited a litany of economic injustices, which he punctuated with a question: “Who has the power?”
He continued: “It’s the people who contribute money, the billionaires who contribute money to political campaigns, who control the legislative agenda. Those people have the power.” Sanders repeated the same point he has made countless times before — that it’s necessary to take on the entrenched power of capital in order to achieve meaningful change for working people.
And to do that, he argued, politicians need to be free from the influence of corporate interests.
Biden responded by saying that he called for publicly funded elections 30 years ago and that he supports a constitutional amendment to take private money out of politics. Only minutes before, he had scoffed at Sanders’ notion of a political revolution, saying: “We have problems we have to solve now. What’s a revolution going to do?”
But at the core of what Sanders means when he talks about political revolution is the problem of money in politics, and Sanders was the one who took action to solve it in the here and now.
Rather than waiting for some constitutional amendment that will never get passed, he did something that has never been done before: He built a people-funded campaign that raised historic amounts of money from small donors, besting Biden nearly two-to-one.
The race between Biden and Sanders was a crossroads. It was a choice between two paths: one that leads to the greater empowerment of the vast majority of ordinary people and one that solidifies the hegemony of the wealthy.
When Biden asked Sanders to join him in pushing for publicly funded elections, Sanders shot back: “Why don’t you join me?” He called on Biden to renounce support from billionaires and Super PACs, and he did so knowing that this was an impossible ask.
Biden’s fundraising has been weak throughout the primary — at the end of March he still trailed Sanders by $80 million — and now that he’s the presumptive nominee, he has no choice but to rely on the generosity of the Democratic donor class. Lacking a broad base of small donors, Biden has replaced the traditional $10,000-a-plate fundraiser with a coronavirus-friendly Zoom call in which the wealthy are paying up to $100,000 a person for VIP access to the prospective future president.
Meanwhile, the number of Super PACs backing Biden is growing and they’re swelling like ticks with Wall Street cash. And even with aggressive fundraising, he’s a few million shy of where Sanders was two months ago and far behind Trump.
Nearly a third of the $31 million raised for Priorities USA, the largest pro-Biden Super PAC, comes from just three financial firms — Paloma Partners, Bain Capital and Baupost Group. Headed by megadonor Donald Sussman, Paloma alone contributed $8 million.
Finance dominates the other two big pro-Biden PACs — David Brock’s American Bridge and Unite the Country — in roughly the same proportions. Less than 40 percent of Biden’s donations are under $200. For Trump, the share is 65 percent.
Biden’s campaign represents the next step in the decades-long takeover of the Democratic Party by Wall Street and Silicon Valley. The candidate for the “party of the people” now draws more support from the finance and real estate sector than the incumbent from the traditional party of big business.
Trump has just one Super PAC — America First Action (AFA) — with just two Wall Street companies in the top ten donors. AFA’s biggest contributors are lawyer Geoffrey Palmer, Blackstone CEO Stephen Schwarzman as well as WWE owners Vince and Linda McMahon. Outside groups only account for 16 percent of Trump’s fundraising. For Biden, that figure is 37 percent — and it will likely grow as he continues to build his war chest.
In the 2016 elections, Trump spooked Wall Street with pseudo-populist demagoguery, prompting the defection of some major Republican donors. The most notable of these is Michael Bloomberg, to whom the Democrats are now looking to bankroll their efforts to defeat Trump. Despite big promises, he has only donated $18 million to the DNC so far, which is crumbs compared to the billion dollars he blew on his own failed bid for the Democratic nomination.
Of course, this hardly means the Republicans have transformed into the party of the common man, either. In 2010, when asked if he votes, Noam Chomsky replied: “I often do, without much enthusiasm. In the US, there is basically one party — the business party. It has two factions, called Democrats and Republicans, which are somewhat different but carry out variations on the same policies.”
This point is illustrated by looking at the contributions from CEOs of the hedge fund Renaissance Technologies, which ranks №6 on the all-time list of biggest contributors. In the last presidential election, they were almost evenly split between the parties. CEO Robert Mercer was Trump’s biggest benefactor, whereas James Simons was a major source of funds for both the Clinton campaign and down-ballot Democrats.
The two were both in the top 10 individual contributors, giving more than $20 million each. Interestingly enough, almost all of the contributions from Renaissance Tech this cycle have been to the Democratic Party. Mercer has been hesitant to give to Trump because of bad publicity, though he did give $300,000 to a joint GOP fundraising committee and he has signaled that he plans to give more.
There are multiple other examples of partisan splits within Wall Street firms as well as instances of individuals hedging their bets by spreading their wealth to both parties. In 2016, 60 rich donors gave to both Jeb Bush and Clinton. Silicon Valley billionaire Karla Jurvetson, who almost single-handedly financed the pro-Elizabeth Warren Persist PAC, had previously funded the senate run of Trump ally and forced labor enthusiast Joe Arpaio to the tune of $2.7 million.
This cycle, CEOs from the investment company Blackstone have given $21 million, which includes donations to support the campaigns of both Biden and Trump as well as roughly even contributions to down-ballot candidates of both parties. And Blackstone’s influence goes far beyond money. Its founder Pete Peterson helped cultivate a cadre of deficit hawks on both sides of the aisle through his pro-austerity foundation. When he died, Democratic House Speaker Nancy Pelosi eulogized him as a “national hero,” adding that she “loved him very much.”
The Great Depression brought about a paradigm shift toward a Keynesian philosophy of economic governance that lasted more than three decades. Many on the left see the COVID-19 outbreak as an opportunity to bring about a comparable sea change, but there’s reason to be doubtful.
While the two crises are similar in magnitude and effect, the environment that gave rise to the New Deal just isn’t there. The crisis is a necessary but not a sufficient condition to bring about a change on that scale.
In the decade before the stock market crash, there was a militant and radical socialist-led labor movement, at the height of which there were more than 3,500 strikes and at the lowest point, more than 500. According to the Bureau of Labor Statistics, there were a total of 150 major work stoppages from 2010 to 2019.
Furthermore, free market ideology wasn’t hegemonic. The Soviet Union posed a credible threat to its legitimacy. The negative aspects of Stalin’s rule weren’t widely known outside Russia at the time. Its autarkic economic model largely insulated it from global market shocks, and many saw its breakneck industrialization as a success story.
Franklin Roosevelt had a peculiar set of incentives to adopt the New Deal, the foremost of which was to stave off revolution, and those do not exist today — or at least not yet. We’re past the “end of history,” neoliberalism is dominant, the labor movement is decimated, and socialism is only barely starting to regain some semblance of legitimacy after decades of Cold War demonization.
Many have argued that the selling point of Joe Biden is that he isn’t ideological. He has historically kept to the dead center of the party and as the party moves left, he will too — or so the logic goes. His platform has been hailed as more progressive than that of any Democratic presidential candidate in this century.
But is the party really going left? And when we say “party,” what does that even mean? The leadership? The rank-and-file? The donors? People who vote Democrat but aren’t card-carrying members?
If Biden’s supposed appeal is that he can be pushed, then what matters is the relative power of the various forces pushing him.
Roosevelt’s name frequently crops up on Biden’s podcast, which consists of him talking to various politicians, activists and experts. Biden praises Roosevelt as someone to emulate. In one episode, historian Jon Meacham gives a lecture on FDR in which he describes history from the New Deal to the 2016 election as “a figurative conversation between FDR and Reagan. You were on a field that was marked off by Reagan on one end and FDR on the other.”
Thus far, Biden has been the embodiment of Clintonian triangulation, much closer on the spectrum to Reagan. It’s hard to tell if our present crisis can actually swing the pendulum the other way.
This week, Biden unveiled a “unity task force” that features many supporters and surrogates of his erstwhile opponent Bernie Sanders. The biggest name from the Sanders’ camp is freshman House Rep. Alexandria Ocasio-Cortez.
It also includes some representatives from the two political poles of the labor movement. On one end is the progressive firebrand Sarah Nelson, leader of the Association of Flight Attendants. On the other is American Federation of Teachers head Randi Weingarten, a moderate party loyalist who has shown inexplicable hostility to Medicare for All.
Biden is offering the left a seat at the table — at least for the duration of the election — but there’s reason to be skeptical about whether that will translate into meaningful policy if he wins. After all, this is the guy who stood before a crowd of wealthy donors a year ago and told them “nothing will fundamentally change.”
When Biden is promising change to one group and the status quo to the other, he has to be lying to one. The smart money is on the former.
He’s sent mixed signals about what his future cabinet might look like. The names of both Warren and JPMorgan CEO Jamie Dimon have been floated as potential candidates to head the US Treasury.
More troubling is the appointment of economist Larry Summers to his council of economic advisors. As an article in Bloomberg News notes, the move sends a signal to Wall Street that “Biden is not moving too far to the left from the centrist positions that earned him his establishment support.” A veteran of both the Clinton and Obama administrations, Summers is a Milton Friedman-admiring true believer in neoliberal orthodoxy, who is as opposed to wealth taxes as he is in favor of financial deregulation.
Unless the population gets increasingly restive while labor grows more organized and militant — something that could very well happen if the crisis is prolonged — Biden will have more incentive to appease his corporate sponsors. And that means, when the dust settles, the reflex response will be austerity, not New Deal-style public works programs and a more robust welfare state.
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If the 2008 financial crisis is an indicator, the outbreak will only increase the relative power of capital and its influence over the political process in the near future, as the ranks of the unemployed swell, creating a race to the bottom among a massive pool of desperate workers.
In the event that proposed restrictions on mergers aren’t included in stimulus packages, the crisis could lead to a consolidation of whole sectors further exacerbating the obscene concentration of wealth. And those who control that wealth will be in a better position to buy influence.
Donors to the Democratic Party were among the biggest winners of the last crisis. In 2009, James Simons topped the Forbes list of highest earners, bringing in a cool $2.8 billion. His fellow Renaissance Technologies exec and megadonor Harry Laufer placed at №6, with $390 million. Laufner and his wife Marsha together donated more than $2 million to the DNC this cycle.
№2 on the list, John Paulson, financed Trump in 2016.
Regardless of who wins in November, the interests of capital will be well represented. If the left hopes to achieve another New Deal — or something more ambitious — it has to take on the power of capital with that of labor.
The silver lining of this crisis is that it shows clearly who makes this country run. When the great multitude of people stop working, the world stops working. And when people see that, they come to an awareness of the power that they have. The surge in strikes this year testifies to a burgeoning militancy among the working class.
We have to seize the moment and build power from that or else the government of capital, by capital and for capital will not perish from this earth.