Plutocratic Populism Pays

By Victor Davis Hanson

Tuesday, October 28, 2014

In early October, Barack Obama went to a $32,000-a-head fundraiser at the 20-acre estate of the aptly named billionaire Richie Richman. The day before he charmed his paying audience of liberal 1 percenters, Obama had sent out an e-mail alleging that Republicans were “in the pocket of billionaires.” Does that mean that Republicans who accept cash from billionaire supporters are always in their pockets, but that when the president does likewise, he never is? And if so, on what grounds is he exempt from his own accusations?

In mid-October, Hillary Clinton gave a short lecture at the University of Nevada at Las Vegas bewailing the crushing costs of a university education. “Higher education,” Clinton thundered, “shouldn’t be a privilege for those able to afford it.”

One reason tuition and student indebtedness have soared — UNLV’s tuition is set to go up by 17 percent next year — is that universities pay exorbitant fees to multimillionaire speakers like Hillary Clinton. College foundations sprout up to raise money for perks that might not pass transparent university budgeting. Clinton — or her own foundation — reportedly charged a university foundation $225,000 for a talk lasting less than an hour. For that sum, she could have paid the tuition of over 320 cash-strapped UNLV students. Is there a Clinton Tuition Fund, to which Hillary contributes a portion of her honoraria to exempt herself from the ramifications of her own accusations?

Multibillionaire Facebook co-founder Mark Zuckerberg wants amnesty for undocumented workers. In fact, he flew down to Mexican billionaire Carlos Slim’s estate to blast his own country’s immigration policies. But Zuckerberg also pays millions to separate himself from hoi polloi. He recently spent a reported $30 million to buy up houses surrounding his Palo Alto estate as well as other properties. That way he can enlarge his own environment and guarantee that his privacy is not impinged on by the wrong sort of neighbors. Couldn’t he spend a comparable $30 million on affordable housing for illegal aliens, or at least allow a family or two to live next to him to provide easy mentorship about the difficult transition from Oaxaca to Palo Alto?

Recently Vice President Joe Biden hit the campaign trail, blasting “corporate profits” and “guys running hedge funds in New York.” According to populist Biden, big-money speculators bear much of the blame for rising “income inequality.”

Aside from the fact that Barack Obama and Joe Biden raised more cash from Wall Street than any other presidential ticket in history — they were once Goldman Sachs’s largest recipients — the Biden family is knee-deep in corporate and hedge-fund lucre. Biden’s son Hunter was a top official for a hedge fund — which was co-founded by the senior Biden’s brother James. Biden’s other son, Beau, has been a corporate lawyer in between political stints. The populist Biden family is a synonym for elite crony capitalism and “guys running hedge funds in New York.”

Why do so many self-interested plutocrats indulge in populist rhetoric that is completely at odds with the way they live?

Could not Barack Obama blast billionaires somewhere else than at the homes of billionaires? If Hillary Clinton is going to deplore high college costs, could she not settle for $25,000 an hour rather than ten times that? Could not Mark Zuckerberg live among those he champions rather than driving up housing prices by buying a multimillion-dollar housing moat around his tony enclave? If Joe Biden swears that hedge funds and Wall Street are toxic, mightn’t he at least first advise his brother and son to steer clear of such tainted cash?

How to explain the hypocrisy?

Zero interest rates have caused the stock market to spike. Along with globalization, sky-high stock prices have created staggering sums of money that translate into influence and power simply unimagined even in the late 20th century. The Obama administration has ushered in the greatest surge in inequality in the last half-century. The result is that a select few have struck it rich in the stock market as never before, as trillions of dollars have been transferred from zero-interest passbook accounts belonging to the middle class to fabulous speculative stock profits for the top few.

Such vast sums allow a select elite to be completely exempt from the worries of most Americans about bad neighborhoods, high taxes, poor schools, and joblessness. It is easy to be utopian when one is never subject to the consequences of one’s own ideology. If Hillary Clinton had had to borrow thousands of dollars for her daughter’s tuition, she might resent huge college speaking fees like her own. (Imagine Stanford co-ed Chelsea Clinton with a $100,000 student loan, as a Stanford foundation paid Sarah Palin $225,000 for a brief talk on campus about the problems of crushing tuition and student debt creating inequality). If Mark Zuckerberg’s kids were to enroll in first grade with mostly non-English-speakers two hours away in Mendota, he might question the value of illegal immigration, or at least its toll on the public-school system.

Populist rants against billionaires or high tuition or hedge funds also buy the very rich and powerful psychological penance. That freedom from guilt and criticism allows a Barack Obama to schmooze thousands of dollars in contributions from billionaires, or a Hillary Clinton to take nearly a quarter-million dollars an hour from universities that hike tuition rates far above the rate of inflation. Joe Biden will forever be good ol’ populist Joe, given that for each populist rant he delivers, someone in his family is free to indulge in exactly the behavior that he has damned.

Our plutocrats also feel that they deserve certain exemptions to allow them the proper landscapes from which to help the less-well-off.

How could Obama empathize with those on federal assistance if he didn’t have billionaire cash to get reelected? Without downtime on Martha’s Vineyard, how could he have got the Affordable Care Act passed? How could Zuckerberg find the proper contemplative privacy to lobby for undocumented workers if dozens of Mexican nationals were playing loud music on either side of his house? How could Clinton address exorbitant tuition if she did not have enough money for private jet travel and serene digs in D.C.?

Do not rule out naked self-interest. Open-borders advocate Zuckerberg wants more foreign workers who will work for lower wages. Billionaires pay to hear Obama’s boilerplate so they can translate their donations into crony-capitalist deals like Solyndra. Clinton trolls liberal universities because they are fat sources of campaign money for her 2016 presidential bid. Biden knows that the more he trashes the rich, the more he can get some of the rich’s money without public scrutiny.

Modern liberalism is an ideology of the super-wealthy in alliance with those who need government assistance — often in opposition to the less liberal middle class, which bears the brunt of higher taxes, more regulations, and zero interest on savings. The vast growth of local, state, and federal government and their workforces, the huge increase in pensions and benefits, the spectacular rise in the number of people on government support, coupled with zero interest for those with modest savings, represents a huge transference of wealth from the middle class to those classes beneath them — even as the resulting booming stock market has enriched the already rich. In some sense, strident populist rhetoric is a psychological tic, an acknowledgment that Obama progressivism has all but destroyed the middle class. When Hillary Clinton and Mark Zuckerberg talk like populists, then we know populism is dead.

The more liberal the 21st-century multimillionaire sounds, the more likely it is that he believes that not much of his progressive rhetoric applies to himself. In sum, for the plutocratic class and the politicians they buy, faking populism is now an anti-depressant as well as a wise business investment.