MONEY MATTERS - Is Elon’s $100 million of “Political speech” equal to my $20 contribution to ActBlue?
Written by SP Editor
Billionaires constitute 0.00029% of the US population, or about 3 per million American citizens. In the 2024 election, billionaires spent $3 billion on contributions to candidates – that’s $3 billion out of $16 billion or roughly 19% of the money sloshing through the formal, reportable disclosed money in candidate and political committee spending. According to the Brennan Center, about another $1.9 billion was spent by “dark money” sources like super-PACs, c-4 nonprofits, etc. and this is considered a “floor” and unlikely the true amount. One can imagine that billionaires comprise a very large portion of these dark money sources, but of course, by design, these entities blessed by the Supreme Court never have to tell where the money came from. I mean, who should care? Whoever the donor is, that person is just engaging in “free speech” or actually it’s not “free,” it’s actually biased, self-serving speech the purpose of which is to achieve outcomes. We know this because the largest beneficiary of this “system” was a billionaire himself who avoided penalties for his felony convictions by winning a second term in the White House, among a few other tangible goodies like a 747.
His few achievements in a second, and largely disastrous term, are highlighted by the one thing they eked out from a GOP controlled Congress - the so-called “big, beautiful bill” that will inevitably be looked back upon darkly by any sensible person. This is not because of what it gave the billionaire class in terms of tax breaks (a lot), but because it, yet again, postponed a reckoning with the health care crisis and the looming disaster for the Social Security system upon which a growing and large portion of Americans rely as their primary source of retirement income. 53%. When changing the term to “main source of retirement income,” the portion rises to 66%. Whoever replaces Trump in 2028 will face that mess in their first term. Does make one wonder just how crazy the culture wars will get as the right tries to distract us all from fiscal reality.
At this point, the right has put all its eggs in the “trans” basket as the abortion battle wanes amid a tragic parade of dead and injured women. Trans people number somewhere around 0.8% of the population and have to be the most misunderstood, mistreated, and marginalized of people. Republican states in the Midwest have just invalidated driver’s licenses for people who have already transitioned and are creating pain and suffering of a sort Jesus would abhor. But better to put that at-birth M or W on a license of 0.8% of people than deal with the demise of retirement benefits for two thirds of Americans or any number of other issues.
The Social Security can and has been kicked down the road by every past administration since Reagan. Just borrow more. Just don’t even talk about it. Just dream about “privatizing” it, but don’t actually DO anything. Sort of like immigration.
At the end of May, Paul Krugman’s regular newsletter talked about a key analysis of the economy that tells us a lot about where our national priorities lie. It may even explain the growing attraction of democratic socialism. Economists like to look at the various components of “national income,” and the portions from different sources. The largest two are wages and profits or “return on capital.” His May piece points out something that most pundits ignore: the portion of national income going to wage earners has been declining. At the same time, owners of capital (that would be those wealthy enough to own stocks and bonds) are taking more and more of the income pie. No wonder Bernie and AOC are able to attract audiences wherever they show up. Here’s Krugman on this:
It’s not clear how much trends in the division of the economic pie between capital and labor — what economists call the factor distribution of income — are driving current economic discontent and anger. But there’s a growing public sense that the system is unfair and rigged against ordinary people. This sense partly reflects the reality that a rising share of economic rewards is going to shareholders as profits rather than to workers as earned income. It also reflects the fact that, even as a growing share of income accrues to wealth, within the growing upwards distribution of income within, there is growing concentration of wealth at the very top. In other words, a rising share of unearned total income is going to a very small number of people.
As a result, it is now widely recognized that the U.S. economy is far more unequal than it was a few decades ago. However much of the discourse about inequality is still stuck in the past — shaped by the perception that rising inequality is largely a consequence of greater inequality in paid income. According to the prevailing yet misguided story, rising inequality is due to higher earnings of those with more education.
That story was never entirely true even in the past. But to the extent it was ever true, it mainly explains rising inequality between around 1980 and 2000. Since then, and especially in recent years, the main story is one of rising oligarchy: more and more of the economy’s rewards are going to a small group that overwhelmingly derives its income from the assets it owns.
This is the baseline for Americans entering mid-life: 30s, 40s, and 50s – the “power years” when one often earns the most, might have a family, and maybe begins to plan for their senior years. To borrow a term, the system is rigged. Wages continue to be the largest component of national income, but it is declining. In its place are rising investment returns for the 10% of Americans lucky enough to own stocks. And we’ve all heard that the top 1% own half of all stocks, and half of that total is owned by just the top .1%, a concentration that is getting worse. This means that the richer you are now, the more you are going to benefit from this shift from wages to profit-sourced income. And for the 90% of Americans who don’t own any stocks, they will stand back as so many did in the 1920s and watch the Gilded Age barons dance the night away. That is, until the crash comes as it did in 1929. As the economy spun out of control before Roosevelt and the Democrats stepped into the void in 1932, a recession progressed into the Depression. Only from those depths could FDR have harnessed desperation to allow for the New Deal to emerge and redefine the role of government in so many ways. One prediction some have bandied about is that AI will precipitate a similar dislocation and disruption of the economy. Will it cause a crash? If so, will there be someone like FDR who could galvanize the powerless into a political force equal to the challenge?
The one thing I believe with certainty is that the current structure of both our economy and our politics is not sustainable. Trump is falling into Hoover’s depths of unpopularity, even as he’s delivered so effectively for the “billionaire class.” While they still enjoy vastly unequal voices in the political process, courtesy of the Supreme Court, admiration for the likes of Elon is entering “correction” territory, to apply market watcher’s terms for a serious decline. We’ll watch California and Mamdani as they float attempts to tax the rich, but I think it likely at least some will succeed. What is far more important, should the Dems return to a viable position in Congress, is that they figure out how to bring some equity back to the management of political speech, and sanity back to a Supreme Court that truly seems wanting to find themselves in the 1920s, not the 2020s.
Drummond Pike, a frequent Organizers’ Forum participant and contributor to these pages, was the founder and CEO of Tides in San Francisco, and continues to be involved in philanthropy and social change.