Are America’s billionaires oligarchs?
It’s a strange question for many who see oligarchs as a uniquely foreign problem. But the answer is, without a doubt, yes.
We’ve heard a lot about oligarchs in the news over the last year, as Russia’s unprovoked invasion of Ukraine has sparked a fierce international backlash against the aggressors and brought attention to the inner workings of the Russian state. Along with a push against the Russian state itself, the US and other Western countries have issued economic sanctions against Russian oligarchs, a small group of extremely wealthy (and notoriously corrupt) individuals that have strong ties to Putin and wield enormous influence over the Russian government.
These oligarchs may not be actual members of the Russian government, but there is no doubt that they are complicit in Russia’s actions. Russian billionaires like Roman Abramovich and Oleg Deripaska use their wealth and privilege to puppeteer politicians and control the political scene, and ultimately directly benefit from the government actions they play a role in shaping.
Sound familiar?
America’s 735 billionaires are no different. Most people might think of Russians when they think of oligarchs, but if we’re talking about a shadowy mix of private wealth and public power, there’s no place like home. American billionaires are not shy about using their wealth to influence American politics.
(Our very own Board Chair, Morris Pearl, made this argument in an op-ed published by The Hill back when Russia first invaded Ukraine. If you’d like to read the piece, click HERE.)
Just look at how billionaires have been behaving ahead of next week’s midterm elections. The 50 biggest donors this election cycle – including high-profile billionaires like Richard and Elizabeth Uihlein, George Soros, Kenneth Griffin, and Jeffrey Yass – have collectively given $1.1 billion to political committees and groups.
According to a report from Americans for Tax Fairness, almost half of the $190 million raised by the House and Senate Republican SuperPACs in the first 16 months of the 2022 campaign cycle came from just 27 billionaires. (Democratic SuperPACs raised far less from billionaires – $26 million out of $154 million total – in the same time frame.)
This amount of billionaire spending is staggering, but it’s nothing new. In the 2020 election cycle, billionaires, who made up just .01% of all donors giving more than $200, contributed almost 1 out of every 10 dollars received by federal campaigns. If that wasn’t enough, the top 20 billionaires combined spent more than twice as much as the entire Biden campaign. On a longer timeline, between 2009 and 2020, the top twelve billionaires alone spent 1 out of every 13 dollars given to candidates and political groups.
In some cases, they’re even skipping the middleman and running for office directly. We just had a billionaire president (with disastrous results), and the 2020 Democratic primary included two more would-be billionaire presidents: Tom Steyer and Michael Bloomberg (not to mention union-busting CEO of Starbucks Howard Schultz’s brief exploration of a run as an Independent). There are two billionaire governors, J.B. Pritzker of Illinois and Jim Justice of West Virginia, and countless other extremely wealthy politicians. It’s actually become a campaign tactic for the Republican party, with over half of Republican candidates for competitive seats this cycle being rich enough to loan their own campaigns money.
All of this campaign cash makes a difference. Running a successful campaign in America today is extremely expensive. Things like television advertisements, polling, direct mailing, and consultant fees all cost a lot of money, which means that even a small edge in campaign fundraising can make a huge difference. It’s not always the case that the winning candidate is the biggest spender, but there is nonetheless a strong positive correlation between election spending and election success that cannot be ignored.
What, you may ask, have America’s billionaires gotten in return for their massive political investments over the years? They are not spending for the fun of it – they’re investing in politicians, and the return on their investment has been incredible. We now have a system of government where public policy outcomes almost exclusively reflect the interests and preferences of the wealthy rather than those of the public.
We can see this in many policy areas, but nowhere more so than in the tax code. Today, billionaires pay much lower effective tax rates than everyday Americans who work for a living. Between 2014 and 2018, the richest 25 billionaires – including the likes of Elon Musk, Warren Buffett, and Jeff Bezos – paid an average effective tax rate of just 3.4% on over $400 billion in gains, while the average American pays 13.3%. And sometimes, these billionaires actually get away with paying nothing at all in taxes.
Considering all this, is there any denying that we live in an oligarchy? America’s billionaires may not speak Russian or be friends with Vladimir Putin (well, some of them are), but the enormous influence they wield over our government makes them oligarchs all the same. And that makes our entire country worse off. The late Supreme Court Justice Louis D. Brandeis once said, “We must make a choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we cannot have both.” He was right – we as a country have to choose what kind of future we want.
The midterm elections are in one week, and we’re about to see what over $1 billion in billionaire spending can do. It’s too late to stop America’s oligarchs from attempting to buy this election, but it’s not too late to prevent them from influencing the next one. If we want to save our democracy, we need to stop the oligarchs.
