America’s Love for Its Billionaires Has Cooled

What would America be without its billionaires? In the past they were John Rockefeller and Henry Ford; Today, the crowd of the super rich is much more diverse with stars like Oprah Winfrey and Beyoncé.

For most Americans, wealth has something glamorous about it. And even if a multimillionaire is not a dazzling celebrity but a pale building contractor, he does not have to fear being envied like he would in Europe. “Socialism never took root in America because the poor see themselves not as an exploited proletariat, but as temporarily embarrassed millionaires,”* the writer and Nobel Prize winner John Steinbeck is said to have once described this acceptance.

But this understanding is diminished to the extent that some Democrats explicitly want to put a stranglehold on the super rich. And they receive strong approval for it.

The newly elected U.S. Rep. Alexandria Ocasio-Cortez proposes a tax rate of about 70 percent for annual incomes of over $10 million. And presidential candidate Elizabeth Warren wants to introduce a wealth tax of 2 percent for household assets of over $50 million.

And the “temporarily embarrassed millionaires” Steinbeck described? They are quite taken with it. In a recent survey by Politico/Morning Consult, 61 percent of Americans approve of Warren’s wealth tax. The even more radical proposal by Ocasio-Cortez is still getting an approval rate of 45 percent from respondents.

Such approval values are unusual in a country whose inhabitants often reacted suspiciously to state redistribution and intervention. Even the programs of the New Deal era (1933-1936), such as the establishment of a social security system, were not particularly popular at the time of their introduction. And among Ronald Reagan’s messages, U. S. citizens mostly remember his “trickle-down” theory. If the state stays out, the rich can unleash economic power and everyone benefits from the wealth that drips down. Who wants to slow down this force of nature through taxes and regulation?

Economists have long discredited this idea. In U.S. politics however, this idea is still booming, at least in the Republican camp. And among the Democrats, for decades no one wanted to expose themselves to the suspicion of making policies that went against American companies and their owners.

Now a turning point has apparently been reached. The strong perception of economic unfairness either did not exist five years ago, or it might have existed, but found no way to express itself. Michael Cembalest, investment strategist at J.P. Morgan Asset Management, shared his analysis in an interview with Politico. “This is quite a moment in American economic history where all of a sudden in a matter of months this thing has kind of exploded like this,” he said.

For Paul Campos, author and law professor at the University of Colorado in Boulder, the aversion to the affluent class is anything but sudden. “Skepticism about the financial system has grown in America at the latest since the economic crisis of 2007/2008, which could be nicely observed through the Occupy Wall Street movement or in the success of Bernie Sander’s election campaign,”* he said.

Surveys have also showed that the desire for more social justice among the population has been perceptible for some time. “Now the Democrats are finally responding to this change,”* Campos analyzed. According to a Gallup survey, only 32 percent of Americans agree with the distribution of wealth.

Last month even Fox News host Tucker Carlson, otherwise not suspicious of progressive ideas, held a flaming live TV monologue against capitalism and the exploitation of the working class. Americans “are ruled by mercenaries who feel no long-term obligation to the people they rule” he said. Later, he added in an interview that he was considering voting for Warren.

This is also due to the fact that the political influence of the wealthy has become clearly visible in recent years. Since the Supreme Court ruled in 2010 that unlimited corporate party donations are considered freedom of expression, election campaigns are now only considered a “battle of billionaires.” With the Republicans, it is the Koch brothers, the Mercer family or the real estate mogul Sheldon Adelson who influence politicians with their donations and push their ideas through. Among the Democrats, the actors are Tom Steyer, George Soros and Michael Bloomberg.

On the other hand, cynicism is created by the fact that young Americans are sitting on five to six-figure tuition debt, citizens often spend years stuttering away at their overpriced medical treatment, and millions of Americans work hard below the subsistence level. The billionaire Trump also criticized the allegedly corrupt elite in 2016 and presented them with tax cuts shortly after.

Now that the distribution issue is being openly discussed, of all people, two more super rich individuals are interjecting themselves into the presidential election campaign. Howard Schultz, billionaire and founder of Starbucks, is currently flirting with candidacy as an independent candidate. Billionaire and former mayor of New York, Michael Bloomberg, may run for the Democrats. Naturally, they both vehemently reject the idea of wealth tax. For Bloomberg, such a project is “unconstitutional” and more suitable for socialist Venezuela than for the U.S.

Schultz, for example, emphasizes that he worked his way up from modest circumstances with ideas and diligence. The 65-year-old frequently mentions the fact that his family lived in low income housing – he shares this in his biography “Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time.”

He does not mention, though, that socially subsidized housing is financed by the state and thus by taxpayer money. As the computer entrepreneur Michael Dell recently explained, problems should be solved not through taxes, but through private foundations. Philanthropy critic David Callahan notes dryly that if the super rich hadn’t pushed tax cuts around for decades, the state would now have money to tackle the problems itself.

“Schultz, Bloomberg and people like them are vain men who believe that in times like these, there is a mass audience in the U. S. for their political positions. But the polls couldn’t be clearer: it’s not like that,”* Campos believes.

The Democratic bloc around Ocasio-Cortez and Warren, with their rich tax proposals, has turned the rethinking that is happening in parts of society into concrete political proposals. This does not indicate whether they will be able to assert themselves politically in the foreseeable future. The political right is working with full force to portray any form of redistribution as the beginning of a Sovietization of America.

“Egalitarian concepts are in tension with what Max Weber called Protestant ethics and the spirit of capitalism,” Campos explains. “This kind of cultural Calvinism is still very powerful.”* But it begins to crumble. And America’s super rich are already feeling it.

*Editor’s note: These quotes, accurately translated, could not be independently verified.