If you brought back either of the Roosevelts—Teddy or Franklin—from the grave, the most astonishing thing they would find is that the “malefactors of great wealth” have become the benefactors of today’s liberalism, and Democrats have become the party of the rich. In the economic crisis of the 1930s, the rich hated FDR. Most of today’s rich love Barack Obama—so much so that Washington D.C. area airports ran out of space to handle all of the private jets flying in the well-heeled for both of his inaugurals. Forget the “limousine liberals” of the 1960s and 1970s, sending their own kids to private schools while advocating forced busing for everyone else; behold today’s burgeoning class of “Gulfstream liberals,” who jet about the globe while fretting about global warming.
To be sure, labor unions (along with trial lawyers) still provide the majority of the Democratic Party’s campaign funds and organizational muscle on election day, but it is the super rich of Silicon Valley and Wall Street, combined with the super rich of Hollywood, who command the priority attention of Democratic Party leaders these days. Of the ten richest zip codes in the U.S. eight gave more money to Democrats than Republicans in the last two presidential cycles. President Obama doesn’t go to union halls to host fundraisers; he goes to posh Wall Street townhomes, the Hollywood hills, or to Tom Steyer’s house in Pacific Heights. Steyer, a billionaire investor and wannabe George Soros, is the perfect model of today’s rich liberal, and shows where the balance of power on the Left rests today. Organized labor wants the Keystone pipeline built; Steyer, who imbibes deeply the green Kool Aid, is adamantly against Keystone. Note who Obama is siding with.
Yes, but haven’t many of the leading plutocrats, such as Warren Buffett and Bill Gates, embraced higher income taxes? Yes, they have, but one important fact has escaped notice: higher income tax rates will not touch the bulk of the fortunes of today’s plutocrats, for the simple reason that the great bulk of the accumulated wealth of Gates, Buffett, Silicon Valley and Wall Street consists of appreciated asset values—not ordinary income. Few seem to be aware that most of this wealth has never been taxed, and in the case of Buffett and Gates, who are taking advantage of the charitable foundation laws, will never be taxed. Even a return to Paul Krugman’s nirvana of 90 percent marginal income tax rates of the 1950s would do little to reduce the wealth gap in the nation.
At a time when the Democratic Party is moving leftward, away from Bill Clinton’s relatively centrist economic outlook, what explains the growth in the ranks of super-rich liberals? (Or, to flip the Thomas Frank title, what’s the matter with Connecticut?) It is worth noting that many of today’s leading liberal super-rich are not heirs of fortunes, like Stewart Mott and various Rockefellers of previous decades, whose liberalism could be attributed to personal guilt over unearned wealth. Most of today’s super rich liberals are financiers and entrepreneurs, like Google founders Larry Page and Sergei Brin. Liberal guilt is not entirely absent from the mindset of the new rich, as can be seen especially in the mindless mantra that the rich have an obligation to “give back,” as though they “took” something in creating wealth by serving the marketplace with dazzling innovations like computer software and internet marketplaces.
There are several parts to this story, but perhaps the most significant is the presumption of the new rich today that they’re simply smarter (look at how fast I got rich?, they think), and today’s elitist, technocratic liberalism appeals to their superficial intellectual vanity. As a one-time critic of the new super rich once put it, “they found it hard to imagine that there might be any social ill that could not be cured with a high SAT score.” (That critic was Barack Obama, in The Audacity of Hope.)
The dependence—if not slavishness—of Democrats on the new super rich is best revealed by the dog that isn’t barking in the current liberal crusade against economic inequality: where is the call for a straight up wealth tax? Where is today’s Huey Long, who in 1935 proposed that no one should be allowed to keep any wealth beyond $50 million—or perhaps, he suggested, only $10 million. Whatever the figure, Long said, “it will still be more than any one man, or any one man and his children and their children, will be able to spend in their lifetimes; and it is not necessary or reasonable to have wealth piled up beyond that point where we cannot prevent poverty among the masses.”
Where is the voice of Huey Long in today’s supposedly populist liberalism? Long’s $50 million wealth limit, adjusted for inflation, would be about $850 million today—still more than anyone could spend in a lifetime. But not even Elizabeth Warren or Bernie Sanders will go there. (The only person who has mooted the idea so far, ironically enough, is the quixotic and still befuddled David Stockman.) Why not? Probably because any such proposal would make Republicans out of the Hollywood and Silicon Valley crowd in a big hurry. The scene is another good reminder of the hypocrisy of modern liberalism.