Ten Men, $1 Trillion, and the Personalization of American Capitalism

 Capitalism has always been about the accumulation and the concentration of wealth. 

 Marx and Engels first described that phenomena in their 1848 Communist Manifesto.  Thomas Piketty has also reminded us of that.  But what they never focused on was the personalization of wealth in capitalism and what that means for society.  The latest rankings of the richest individuals in America reminds us of the persistence and personalization of wealth.

Forbes just released its ranking of the richest individuals in the world.  Topping the list is Frenchman Bernard Arnault of LVHM, the fashion and cosmetics empire, with a net wealth of $211 billion.  Yet if we focus simply the  ten wealthiest in the world, seven of them are located in the US, with a combined wealth of $786 billion.  The ten richest Americans, including the likes of Elon Musk, Jeff Bezos,  Larry Ellison, and Michael  Bloomberg,  total $1 trillion dollars.  And this list does not even include the Waltons who own the Walmart empire or the  Koch family.  Of the twenty-five richest individuals in the world seventeen are American.

For some this is God Bless America!  It is the story of the American dream where any of us can become billionaires, or if all else fails, at least millionaires.  Yes while the US has the greatest number of billionaires in the world and perhaps the greatest density of billionaires per capita, it’s Gini coefficient, which measures economic inequality on a scale of 0 (totally equality) to 100 (extreme inequality), has fallen from  039 in 1970  to 0.43 in 1990 to 0.49 in 2022.

While the US was never an economically egalitarian nation, at least in recent history, it has fallen to become one of the least equal among any countries in the world that likes to consider themselves democracies.  Combine this with the decline in social mobility in the US that is getting progressively worse by generation, and it is hard to conclude that the American Dream does exist except for a few.

Capitalism has always been personalized, especially in the US.  It was once the story of the Vanderbilts, Duponts, Carnegies, and the Rockefellers who made money in railroads, finance, or oil.   They made billions at the expense of the workers whom they exploit, and then we lionize them as heroes and beg for their money when they created charitable trusts or foundations. We view them as benevolent and generous, forgetting how they made their money.  They were literally the faces of nineteenth and twentieth century American capitalism.

Today’s personification is Silicon Valley, social media, and tech.  In addition to Musk, Bezos, Ellison, and Bloomberg, it is also Bill Gates, Mark Zuckerburg, Larry Page, and Steve Ballmer.  It is still an American plutocracy, except the nature of the capitalist wealth and their faces have changed.

But we should not forget the other faces of American capitalism  These are the faces that John Steinbeck talked of in his Grapes of Wrath to Michael Harington’s The Other America to Barbara Ehrenreich’s Nickel and Dimed to apropos Faces of Povertythe documentary.  We have nearly thirty-eight million people officially in poverty, each a story of how the American dream is merely a dream for them.

It is no coincidence that there is a connection between poverty and billionaires.  The more that a fewer and fewer number of individuals are rich the greater the number of individuals who will be poor.  Compare the $1 trillion in wealth for ten Americans to the fact that the bottom fifty percent of Americans—roughly 165  million individuals—have a combined wealth of $4.1 trillion.  If your net worth is between $43,760 and $201,800, you are in the middle class.  Once you get below the middle class, there is no net worth—individuals are in the hole and owe more than they own.

Donald Trump and January 6, made many question the viability of American democracy.  Perhaps its viability should have been questioned even before that.  The problem with billionaires is not only that they are different from the rest of us—to paraphrase from F. Scott Fitzgerald—because they are rich, but also because they are using their economic power politically to keep themselves rich.

This essay originally appeared in Counterpunch.

Reflections on the Future Survival of the Donald Trump Presidency

The Trump presidency has always been a rocky and contentious one, but recent and coming events will try its soul in ways that have not previously been seen.  While repeatedly some speculate that Trump will not make it to the end of his term in 2021, realistically it would take a lot to change for him to be impeached, convicted of a crime, or resign.  What forces and events will impact his presidency in the coming months?

Trump Himself

The Death of President George Herbert Walker Bush points to a significant contrast in personalities and the weakness of Donald Trump as a person.  Bush’s death provides not just a retrospective on the 41st president’s legacy, but it speaks also to the deficiencies of the Trump presidency. 

Bush’s presidency illustrates many legacies–some good  and bad–but psychological temperament and style stand out.  Bush’s career in business and government–especially the latter as CIA director, UN ambassador, member of Congress, and vice-president before becoming president–point to someone with the skills, knowledge, and experience to lead the country.  Bush’s resume was one of understanding how Washington worked. It was also a resume that demonstrated a commitment to diplomacy, knowledge-based decision making, and  a respect for the processes of government.

Bush appointed knowledgeable and competent people to serve him, he approached the world, as in the case of the first Gulf War, with a sense of multilateralism and diplomacy that starkly contrast to what Trump displays.  Additionally, Bush, unlike Trump, was willing to accept responsibility for his actions and he made choices–such as correctly breaking his no new taxes pledge–that demonstrated real leadership and a willingness to compromise.

Whether many realize it or not, the passing of Bush will only highlight so much more the deficiencies of Trump and his presidency. 

Michael Cohen and the Looming Special Prosecutor Report

Perhaps the most significant event affecting the Trump presidency took place last week when Trump’s former attorney Michael Cohen pled guilty to lying to Congress.  It was not so much the lying that was the issue, but it was what the lie was about–efforts well into June 2016 to pursue a business deal with Russia.  Why is this significant?

Central to the special prosecutor’s investigation on Russian interference with the 2016 US elections and the role that the Trump campaign had in colluding with them has been ascertaining of motive.  By that, the issue has been to try to explain why Trump and his associates may have wanted to collude with them, or why they seemed even now unwilling to take a hardline with Putin or otherwise condemn the investigation.  The simple answer is that Trump had possible economic ties then and perhaps now with Russia that he did not want to reveal and which may have then and now continue to cloud his judgments as president.

Keep in mind that Trump this week did confirm much of the details of Cohen’s confession about a Russian Trump tower deal.  This fact no longer seems in dispute.  The deal now speaks to how the Trump business empire, his campaign, and now presidency are intertwined, and how there may have been interest or motive to collude with Russians to get a better economic deal for Trump.  There is a possible quid pro quo emerging.  The Russians did not want Clinton elected, Trump wanted a business deal and perhaps a presidency, the art of the deal suggests strike a deal so that everyone gets what they want.  This quid pro quo is perhaps the core of everything which has thus far unfolded, and it goes far beyond accusations that Secretary of State Clinton extended special deals to countries and those who were donors to the Clinton Foundation.

Democratic Control of the House

Democrats taking control of the US House is significant on multiple fronts.  They will pose a policy limit on Trump, they will also be able to do many investigations and perform the oversight of the executive branch and agencies that the Republican House never was willing to do.  But House control by Democrats also closely connects to the special prosecutor’s actions.

One must also read between the lines in the Cohen plea.  It is no surprise that special prosecutor Robert Mueller knows more than the media is reporting.  One can surmise that once the Democrats take control of the House in January Mueller will be able to release a report to them, even if he is fired.  There is little chance that Mueller will indict Trump even if the evidence supports it. Instead, he will follow the March 1, 1974 Justice Department Memorandum which then referred allegations of Nixon’s criminality to the House.  The same will possibly happen here.

One can probably expect the special prosecutor to indict more individuals, especially given Cohen’s plea.  One might also see Trump pardoning many individuals such as Paul Manafort who remain  loyal to him.  But even if all this occurs, the one-two punch of a special prosecutor’s report and Democratic House control will constrain the Trump presidency even more than it has already.

Mounting Personal Lawsuits

Trump faces numerous civil lawsuits in state and federal court that will continue to dog him, and they cannot be halted by presidential pardons or judicial appointments.  These suits involve sexual harassment issues, the Trump Foundation, his business dealings and how they tie into whether he violated the Constitution’s Emolument clause, among others.  President’s cannot issue self-pardons, especially in civil matters, and his authority does not extend to state courts where he cannot control appointments to the federal bench or the Supreme Court.

 
2020 Economic Slowdown

Perhaps the biggest wild card is the economy.  The US is in the middle of one of the longest recoveries and bull markets in history.  But there are many signs that the end is coming.
Internationally, there is a slowing down of world economic growth that will affect US exports.  Also, as a globally interconnected economy, the US will be impacted by what happens elsewhere.  Rising interest rates are impacting an already slowing down housing market that seemed until recently to be overheated. 

The Trump tax cuts, according to analysts, either had little impact on economic growth–especially when most of the tax cuts were taken as profits and not reinvestments–or they have run their course.  The trade wars are beginning to impact many US sectors, including agriculture and the auto industry (as seen by GM’s plans to close facilities), and  the tightening of immigration is leading to labor shortages.

Finally, the Trump administration has failed to address longer term structural problems with the US economy such as the significant racial and economic gaps tht limit opportunities for many, unequal economic development, decaying infrastructure, and an inability to deal with global economic issues such as the increasing competitiveness of China and other major economies. Throw into this also a  growing budget deficit that will force the US to borrow more money at higher interest rates. All told, the recent Wall Street stock jitters highlight what many see as a first or second 2020 economic slowdown that  will impact the presidential race.

But Will the Republicans Abandon Trump?

All of the above forces will serve as manor checks on the remaining Trump presidency.  But does that mean that Republicans in the Senate or his base will abandon him?  As of now there is little sign of that.   It would take a significant combination of the above events for that to happen and for there to be a serious chance of Republicans calling for impeachment, or for there to be support for challenges to Trump were he to run for a second term.  Trump remains more popular among his base than do the rest of the Republicans and until such time as his base leaves him one cannot foresee  this scenario.