It is quite a time to be a billionaire with socially liberal politics who dislikes President Donald Trump.
Starbucks CEO Howard Schultz is no longer considering an independent run for president. The Democratic Party has not one, but two, major presidential candidates whose campaigns are devoted to taking on billionaire power. And former Vice President Joe Biden, the candidate who many well-heeled donors thought would sail to the White House, has shown some signs of weakness.
As a result, the superrich residents of moderate-minded coastal communities are starting to panic. They are casting about for last-minute solutions, including a late-in-the-game bid by former New York City Mayor Michael Bloomberg and a trial balloon by Deval Patrick, the former Massachusetts governor who’s now a Bain Capital executive.
“There is great fear among the monied parts of the Democratic Party that this populist insurgency is coming and that when it comes … there is going to be a serious regulation of wealth that this country has not seen since the early to mid-’60s,” Gary Gerstle, a professor of U.S. history at the University of Cambridge and author of ”Liberty and Coercion: The Paradox of American Government From the Founding to the Present.” “They see a threat to their prerogatives and their wealth that they have not had to deal with under Democrats or Republicans for 60 years. They have a right to be worried.”
But the failed attempts by billionaire Jeff Bezos’ company to impose its will on municipal elections in Seattle, a city of under 750,000, show how the ultrarich of the Democratic Party might struggle to shape a rowdy, unpredictable 2020 primary fight.
In late July, with the Seattle City Council’s nonpartisan primary elections looming, the city’s embattled left found itself on the defensive.
Mayor Jenny Durkan, who has adopted an enforcement-heavy approach to the city’s homelessness problem since her 2017 election, warned residents of Seattle’s diverse, working-class southeastern neighborhoods against electing progressive community organizer Tammy Morales to the City Council. “Another socialist” like Morales, she said in a mass email, would “cause more division in the city.”
Morales, who went on to win the city’s open 2nd District seat on Tuesday, easily pushed back against the charge, denying that she identifies with the socialist label.
But for the city’s community of progressive activists, it was a frightening omen that city elections would be dominated by the same homelessness crisis that had provoked a showdown with Amazon and divided them from the institutional left, including elements of organized labor.
Then in October, Bezos, the CEO of Amazon, dramatically ramped up the company’s involvement in the race and completely changed the dynamic. The company, which calls Seattle home, contributed an additional $1 million to a $2.4 million effort by the Seattle Chamber of Commerce to defeat candidates who had either previously supported raising taxes on big business to address the homeless problem or had not expressly ruled out the idea going forward. Amazon’s total contribution to the effort would end up being $1.5 million.
Two of its biggest targets were Morales and Councilwoman Kshama Sawant, a proud socialist who served as a driving force behind the city’s pioneering $15 minimum wage and an effort to raise city revenue to address homelessness through a big-business-focused “head” tax. (The City Council ended up repealing the tax under intense pressure from Amazon and over Sawant’s objections.)
The outside threat united the city’s normal fractious progressive movement, according to Morales.
Bezos “was very helpful at unifying the left in the city. There was a clear rejection of the narrative coming out of the Chamber,” she said.
The races gained national attention when the two populist presidential contenders, Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.), weighed in in support of the progressives. Sanders even used his text message network to encourage 43,000 Seattleites to vote for the left-leaning candidates.
The candidates’ involvement “kept the conversation going in a way that was very helpful,” Morales said.
Many of the city’s mainstream liberals, who might otherwise be wary of Sawant in particular, felt forced to choose between Amazon and the left. And to Amazon’s chagrin, they chose the left, according to Laura Loe, a housing advocate who spoke to many such voters.
“There are people who would never vote for a socialist, but they said, ‘There was no way I was going to vote for somebody backed by Amazon money,’” recalled Loe, who is also a member of the Democratic Socialists of America.
In the end, despite the cash advantage, just two out of the seven City Council candidates whom Amazon backed prevailed; one of them, incumbent Debora Juarez, also received support from organized labor PACs.
Markham McIntyre, a spokesman for the Seattle Chamber of Commerce PAC that served as a vehicle for Amazon’s money, sounded a conciliatory note when asked about the losses. “The business community stands ready to work with the new Seattle City Council,” McIntyre said in a statement to Reuters. “How our local government chooses to partner ― or create division ― matters.”
There are shades of the Seattle results in the Democratic presidential primary, in which leading candidates have turned tech executives in general, and Bezos in particular, into the faces of their calls to increase taxes on billionaires and diminish their political influence.
Warren’s calls to break up Amazon and other large technology firms is perhaps the best-known example. Shortly after announcing her plan to disassemble the conglomerates, she held a rally in Long Island City, the New York neighborhood where local resistance scuttled a plan to build a major Amazon facility there in exchange for big tax breaks.
But she has been far from alone in taking on the titans of the technology industry, to say nothing of the broader billionaire class. Sanders held his massive comeback rally in October in Long Island City as well. And in a new 30-second video advertisement his campaign is now airing in Iowa, Sanders says that, although Trump is the “most corrupt president” in history, the “greed and corruption undermining our democracy is bigger than one man.” As he says the latter, images of Bezos, oil billionaire Charles Koch and Treasury Secretary Steve Mnuchin, a former hedge fund manager, appear on screen.
Andrew Yang, a millionaire entrepreneur whose candidacy is premised on the idea that corporations will be automating millions of jobs in the near future, is joining the populist parade. His first television advertisement ― a 1-minute spot he is spending $1 million to air in Iowa ― features an image of Facebook CEO Mark Zuckerberg as the narrator promises that Yang will create an economy in which “Big Tech and Wall Street are held accountable.”
Even South Bend, Indiana, Mayor Pete Buttigieg, who has attracted scrutiny for the support he has received from the superrich, including many leading tech executives, singles out Amazon for criticism in his stump speech.
In a riff on his expansive vision of freedom, Buttigieg draws applause from crowds in Iowa when he says, “I’m not terribly interested in preserving Amazon’s freedom to not pay any income taxes at all.”
The responses of some of the country’s leading billionaires ― and, not to be excluded, mega-millionaires ― is, as a first resort, to go on television with furrowed brows and denounce the criticism of their power as attacks on the very foundations of the country.
Given her high standing in the polls, Warren has been the principal target of their fulminations. Hedge fund billionaire Leon Cooperman has delivered the most dramatic performances, tearing up on CNBC as he fretted about what Warren’s 2% wealth tax might do to the country.
Microsoft founder Bill Gates has expressed similar alarm at Warren’s wealth tax, professing he would be willing to pay double his net worth in taxes but not $100 billion. (In fact, a New York Times analysis found that Gates, who is presently worth $97 billion, would still be worth $13.9 billion if Warren’s wealth tax had been in place since 1982.)
And in a Sunday interview on CBS, JPMorgan Chase CEO Jamie Dimon, whose $31 million salary he erroneously claimed he has no say over, asked Warren, Rep. Alexandria Ocasio-Cortez (D-N.Y.) and other progressives not to “vilify people who worked hard.”
It’s unlikely that the effect of these statements does anything more than strengthen Warren. A majority of Americans think that the government both does too much for wealthy people and should do more to curb income and wealth inequality in the country, according to a YouGov poll commissioned by HuffPost in March. Among Democrats, those figures exceed 80%.
One in five Americans and 37% of Democrats think that the existence of billionaires is a “policy failure,” the same poll found.
“Their lack of self-awareness is amazing,” a veteran Democratic campaign strategist, who asked for anonymity for professional reasons, said of the various wealthy businessmen’s anti-Warren remarks. “Do they think that a billionaire going on TV and complaining about how Warren’s plans are un-American is going to help their cause? On the contrary, it’s like a massive in-kind donation to Warren’s campaign every time they do it ― certainly in the primary election but with the general electorate, too.”
Will Ritter, a Richmond, Virginia-based Republican ad maker, questioned whether veering too far to the populist left would make it harder for Democrats to appeal to the general electorate.
“When the Democrats resort to demagoguery and false promises, they run the risk of not being taken seriously by an educated, moderate voter,” Ritter said.
The trouble for the nation’s socially liberal superrich people is that they are evidently unconvinced that Biden, or any other of the candidates they consider acceptable, has enough of a shot at winning the Democratic nomination and beating Trump.
As a result, some billionaires have not been content to throw potshots from the sidelines. Bloomberg, the former New York City mayor and media mogul who is worth over $52 billion, announced last week that he is considering a run for the Democratic presidential nomination. Bezos, the richest man on the planet, reportedly encouraged him to do so.
If he entered the race, Bloomberg would have virtually limitless resources to finance his bid, even if he plans to skip the first four primary and caucus states.
But the track record of other self-funders currently in the race does not portend well for his chances. Former Rep. John Delaney of Maryland, a mega-millionaire financial entrepreneur with business-friendly policies similar to Bloomberg’s, failed to qualify for the third debate despite spending nearly $27 million and announcing his candidacy earlier than anyone else.
Likewise, billionaire hedge fund manager Tom Steyer, who is running as an anti-establishment progressive and has poured upwards of $47 million into his race, remains mired in single digits in the polls.
“I find it laughable,” said Mike Mikus, a Pittsburgh-based Democratic campaign consultant. “Whether it’s a super-liberal Democrat that supports Bernie or a moderate Democrat that supports Biden, I don’t think anyone thinks the problem is we don’t have enough rich people in government.”
But for some billionaires, the stakes of the Democratic presidential primary are about more than just who gets the chance to take on Trump. It’s about whether the Democratic Party, an institution that suits many of the wealthy’s preferences on so-called social issues related to race and gender, is still a place where they can feel at home ― and exercise influence.
Particularly since Bill Clinton’s victory in 1992, the Democratic Party has functioned as a home for the multiracial working class alongside a portion of the moderate-minded, wealthy elite. The party’s accommodation of not just affluent professionals but also self-styled liberal billionaires was driven partly out of self-interest: National elections require ever-larger sums of money to compete.
The 2008 financial crisis and accompanying growth in the income and wealth gaps punctured a hole in that détente, according to Gerstle of the University of Cambridge.
“These two wings have existed pretty comfortably, and that comfort is being exposed as extremely uncomfortable, and so it’s going to make the primary season for Democrats, particularly if Bloomberg jumps in the race, really interesting to watch,” Gerstle said.
Gerstle likened the rage fueling the current left-populist wave to the disgust with concentrated wealth that last gripped U.S. society during the Gilded Age of the late 19th and early 20th century. The resentment that emerged from those movements fueled the reforms of the Progressive Era and, later on, the New Deal.
One difference, he noted, is that the superrich of the present era prefer to display their wealth less ostentatiously, a phenomenon most evident in the casual dress code of tech entrepreneurs and investors concentrated on the West Coast.
“Ultimately it’s not going to mask their wealth and power, but it did for some time,” Gerstle said.
Even if their motives are understandable, though, to some observers, billionaires’ apparently indefatigable instinct to pile on against populist Democrats against all evidence of its ineffectiveness is a mystery.
For Joe Sanberg, though, a successful investor and progressive activist leaning toward either Sanders or Warren, it is not a surprise. He believes many of his successful peers in the investment world are out of touch not just with workers but also with small-business owners and entrepreneurs outside of the most rarefied enclaves.
“It’s a lack of perspective,” said Sanberg, an early investor in Blue Apron and co-founder of the socially responsible online banking firm Aspiration. “It’s hard to bring someone out of a narrow perspective just by telling them. You have to get them out of their echo chamber.”
Kevin Robillard contributed reporting.