Evil Geniuses: The Unmaking of America: A Recent History (36 page)

Three years later America’s Talking morphed without Ailes into MSNBC, and Rupert Murdoch hired him to create Fox News. Republican elected officials continued helping their great media pooh-bah. The first Bush administration had suspended the federal antitrust rule forbidding networks from also owning the shows they aired, then New York’s Mayor Rudy Giuliani successfully pressured the local cable operator, owned by Time Warner, to carry Fox News. Soon Murdoch also had conservative media’s high end covered with
The Weekly Standard,
cofounded by Irving Kristol’s son, Bill
.
In 2007, Murdoch added
The Wall Street Journal
to his portfolio and
Breitbart News
launched, funded by the financial billionaire (and Koch associate) Robert Mercer. The elite would be conscripted (and coopted) at scale on college campuses and in Washington, but now through every medium the rabble would be roused as well, 24/7.

Around 1980, donations by business PACs to candidates for Congress started exceeding those made by unions, but never by more than half until 2000, after which the corporate sums were twice those of organized labor, then more than triple. The Club for Growth, a group of the extreme economic right founded in 1999 to oppose regulation and taxes, promptly became one of the largest sources of campaign money for Republican congressional candidates. After Mitt Romney, as a candidate in the presidential primaries in 2011, made the mistake of saying, “I believe based on what I read that the world is getting warmer, and I believe that humans contribute to that,” the club led the right-wing attacks on “his support of ‘global warming’ policies.”

At the same time, the Kochs and their gang spent more time and money on their new political dominion, organizations that run attack TV ads against insufficiently right-wing candidates, operate impressive propaganda sites, and mobilize angry citizens to agitate on behalf of the antigovernment economic agenda—a kind of grassroots politics funded and coordinated from Washington that had just come to be known as Astroturfing. In addition to the funding by right-wing billionaire coordinators, large corporations—oil, pharmaceuticals, insurance, tobacco—also chip in. The groups evolve and split and merge and dissolve and reconfigure, but the two most significant, both Koch creations, have been FreedomWorks (“Lower Taxes, Less Government, More Freedom”) and Americans for Prosperity. Without them—money, planning, talking points, facilities, transportation, almost everything—the Tea Party movement, despite its authentic financial-crash-and-black-president-induced hysteria, might have fizzled out quickly and accomplished little.

Instead, the aroused and properly coordinated Tea Party was crucial to hobbling the Obama presidency. A year after the movement arose, the Affordable Care Act was passed—but barely, thanks to full-bore work by the economic right’s hydra-headed political operation. Even though the new law wouldn’t go into effect for four years—and would enable 20 million more Americans to have health coverage, nearly half of them as new customers of private insurance companies—the political operation nevertheless convinced millions of Americans to be frightened of the prospect, to
hate
Obamacare
. That project was helped, as if providentially, by a signature success of the right’s judicial long game: at the beginning of the year, the Supreme Court issued its
Citizens United v.
Federal Election Commission
decision, effectively prohibiting serious election finance laws and giving big business (and unions,
as if
) free rein to spend money on campaigns.
^*
And in that fall of 2010, Democrats lost their large majorities in both the Senate and House.

Extremely reasonable, extremely
center
-left Obama horrified the Kochs and their friends, in particular his successful passage of the Affordable Care Act after a year in office. When the Republicans won back Congress—that is, saved America from Obama—Charles told a reporter that while “I’m not saying he’s a Marxist, he’s internalized some Marxist models—that is, that business tends to be successful by exploiting its customers and workers.” In the same article, his brother called Obama “the most radical president we’ve ever had as a nation” who, in less than two years, had “done more damage to the free enterprise system and long-term prosperity than any president we’ve ever had.” A billionaire member of their political network (and resident of David Koch’s Park Avenue apartment building) was also apoplectic about the president’s mere suggestion that private equity guys like him should pay taxes on their incomes at an income tax rate of 35 percent, as it was then, instead of the capital gains rate of 15 percent. “It’s a war,” Stephen Schwarzman remarked. “It’s like when Hitler invaded Poland in 1939.”

David Koch died in 2019, but Charles remains overseer of the interconnected political operations, which are spending $100 million to $200 million a year, mainly on election campaigns. From his personal foundation’s assets of nearly $1 billion, he spends an additional $100 million a year promoting the political interests of the rich and big business.

More than that of most rich right-wingers, Charles Koch’s ideological zeal seems genuine, as if he’d probably be a screw-the-unfortunate, screw-the-environment libertarian even if he didn’t own oil refineries, if he had a net worth of $43,000 instead of $43 billion. But ideologically sincere versus monstrously greedy is a distinction without a difference here. As Koch and his associates reengineered the American system and ways of thinking over the last half-century, his own fortune doubled in the 1980s, then tripled in the ’90s and 2000s, then tripled again during the last decade. In other words, his wealth after inflation is twenty times greater than it was forty years ago. The wealth of all affluent Americans, the top fifth, has more than doubled since the early 1980s. Meanwhile the median wealth of all Americans is just about exactly the same today as it was back before the wrong turn.

And the problem isn’t just the spectacle of enormous wealth and the gratuitous economic inequality and insecurity. It’s also the corruption of our system of government, ruining democracy. Beginning in the 1980s, big business and the rich achieved the political power to tilt our system—legislatures, executive branches, judiciaries, media, academia—much more in their favor. Thus they become even richer, which permitted them to buy more political leverage to tilt the system more excessively, further entrenching their wealth and political power. And so on and on. As the Nobel Prize–winning economist Joseph Stiglitz puts it, we’re “converting higher economic inequality into greater political inequality. Political inequality, in its turn, gives rise to more economic inequality.” It’s another cascading vicious cycle, maybe the most disturbing of all.

It’s also another remarkable historical rhyme with America of 100 and 150 years ago, another way we’ve gone back in time. Our original megacapitalists—John D. Rockefeller in oil, Andrew Carnegie in steel, J. P. Morgan in banking (and steel and railroads and electricity), and Richard Mellon Scaife’s great-uncle Andrew Mellon in almost everything—had been a small, coherent, effective group who usually got what they needed out of Washington, thank you. In the early 1900s, when Morgan found out that the new progressive government of his fellow Manhattan patrician Theodore Roosevelt was planning to file suit against a monopolizing railroad he controlled, he went to the White House. “If we have done anything wrong,” he told Teddy, “send your man to my man, and they can fix it up.” The president’s man was the U.S. attorney general, there at the meeting with them.

In the modern age, no country as economically advanced as ours has regressed to an earlier stage of development, not yet. In their epic world history
Why Nations Fail,
an MIT economist and a University of Chicago political scientist explore what has distinguished, over aeons, the poor countries that stay poor from the ones that become fully developed. The basic conclusion is that successful countries keep their greedy elites from exercising too much control of their economies and governments. Likewise, in the recent book
How Democracy Ends,
a political scientist explains that for individual citizens “the appeal of modern democracy is essentially twofold.” There’s the “dignity” of being able to freely vote for one’s leaders, but also the essential “long-term benefits” that democracy needs to provide, the fair “sharing in the material advantages of stability, prosperity and peace.” The former without the latter becomes a pointless charade, as FDR said in 1936.

Alan Greenspan has concerns about extreme economic inequality for that same reason, but in a somewhat different spirit. In the 2000s he was asked about the problem. “Inequality is increasing,” he said. “You cannot have the benefits of capitalist market growth without the support of a significant proportion and indeed virtually all the people, and if you have an increasing sense that the rewards of capitalism are being distributed unjustly, the system will not stand.”

For Greenspan, however, the problem isn’t extreme inequality per se, or the newly extreme inequality between the great majority and the rich, but rather the
envy
of the
poor
for the
middle class
. And his proposed solution to that, honest to God, was to contrive to pay middle-class workers even less, to bring their incomes down closer to those of the poor.

We pay the highest skilled-labor wages in the world. If we would open up our borders to skilled labor far more than we do, we would…suppress the wage levels of the skilled….If we bring in a number of workers to suppress the level of wages [of the skilled] relative to the lesser-skilled, we will reduce the degree of inequality.

After Democrats shifted the political and economic paradigm in the 1930s, they moved left in many ways over the next forty years, but never really on economics. The ultra-liberal George McGovern was not to the left of FDR. On the other hand, after the right’s triumphal paradigm shift in the 1980s, it never stopped moving further right and trying to bring the country with it, never settled into a permanent posture of compromise on economics. And the Democrats for forty years never stopped trying to reach a middle ground with Republicans, even as the old middle was continuously redefined as too far left and the formerly too-far-right as plenty moderate. In 2005 George W. Bush, the compassionate conservative, tried to turn Social Security into a titanic 401(k), to make people’s benefits dependent on the stock market’s performance. In 2010 the Obamacare provision most effectively demonized by the right, the very small annual tax penalty that uninsured people would have to start paying, had been designed twenty years earlier as a central mechanism in the big healthcare reform proposal of…the Heritage Foundation.

As a candidate running for the Democratic nomination in 2008, Obama delivered an excellent speech in New York City about the political economy that got completely eclipsed by his excellent speech in Philadelphia around the same time. “A free market was never meant to be a free license to take whatever you can get, however you can get it,” he said in the same hall where Abraham Lincoln had given a speech when he was about to run for president.

That’s why we’ve put in place rules of the road…Each American does better when all Americans do better….We’ve lost some of that sense of shared prosperity. Now, this loss has not happened by accident. It’s because of decisions made in boardrooms, on trading floors and in Washington….Instead of establishing a 21st century regulatory framework, we simply dismantled the old one, aided by a legal but corrupt bargain in which campaign money all too often shaped policy and watered down oversight. In doing so we encouraged a winner take all, anything goes environment….The future cannot be shaped by the best-connected lobbyists with the best record of raising money for campaigns.

That fall, as Wall Street crashed and the financial system teetered and Obama was elected president partly as a result, he hired the House leader Rahm Emanuel as his chief of staff, who immediately made his most famous pronouncement, concerning the crash,

You never want a serious crisis to go to waste….This crisis provides…the opportunity to do things that you could not do before. The good news, I suppose, if you want to see a silver lining, is the problems are big enough that they lend themselves to ideas from both parties for the solution.

He said that at an annual conference of CEOs staged by
The Wall Street Journal
. Alas, that crisis mostly went to waste.

The Obama administration immediately fell into the modern Democratic role of being the restrained tidiers-up after “conservative” recklessness—in this case, the disastrous $2 trillion war in Iraq as well as the disastrous Wall Street crash. The brand-new administration was consumed for a while with the work of preventing a collapse of the financial system and the onset of a depression.

The opposition party in Washington and its Astroturfed Tea Partiers around the country could focus strictly on assigning blame for the disaster. At the direction of the field marshals of the rich right in Washington, the Tea Party was angry about the federal bailout of the banks rather than at the banks themselves. Unfortunately, the Obama administration—restraint!—didn’t blame the banks or bankers either. Instead of quoting himself from the year before and taking real political advantage—
We must end this winner-take-all environment, reverse the decisions made in boardrooms and on trading floors, the corrupt bargain in which campaign money and the best-connected lobbyists shape policy—
Obama rescued the financial industry and then neither really castigated nor prosecuted any of its obvious villains.

It was too bad, politically and substantively, that Obama’s economic team, official and unofficial, was overstuffed with people who had a distinctly Wall Street view of the economy and life. Moreover, it’s probably too bad that both the financial industry and so much of the Democratic Establishment are clustered together in and around New York City. The cozy intertribal mixing can’t help but be a bit corrupting when it comes to writing and enforcing the economic and financial rules of the road. During the decade leading up to the 2008 crisis, the five members of Congress who raised the most from people in the financial sector were Chuck Schumer, Hillary Clinton, Chris Dodd, Joe Lieberman, and John Kerry—five senators representing New York and two of its rich-banker-laden neighboring states, all of whom but the future Senate minority leader were running for president. One doubts, for instance, that Schumer would have been such an important, full-throated defender of the inexcusable super-low “pass-through” tax rate on private equity and hedge fund managers’ incomes if he didn’t literally represent Wall Street.