Mr. 1 Percent versus Mr. 1 Percent
Listening to a newly populist President Obama or to Mitt Romney, who touts his CEO past at every turn, it is tempting to imagine a 2012 election that unfolds as textbooks imagine, with Republicans speaking for business and Democrats standing up for the little guy. Don’t be fooled. A more accurate reading of the contest features two elite candidates who represent different wings of the 1 Percent – a group increasingly divided over economics and the role of government.
Look closely at Obama’s rhetoric and you see that he’s not channeling Occupy Wall Street as much as a pragmatic tax-and-invest liberalism. Obama speaks for highly educated, affluent Americans who want government to do more, not less, on a number of fronts – like education, infrastructure, scientific research and clean energy. These folks don’t envy Europe; they envy China, which is deploying a muscular statism to compete economically and dominate the future.
Yes, Obama has made some strong statements lately about inequality and raising taxes on rich people. But most of this goes over just fine in Malibu or Manhattan. Many of the rich are ready to pay higher taxes – with polls showing, for instance, that a majority of millionaires support the Buffett Tax. And many agree that inequality has gone too far, seeing the growing wealth divide as a threat to America’s economic dynamism and social cohesion. The things that liberal rich people don’t like – unions, protectionism, and regulation, etc. – Obama doesn’t like much either.
Romney, meanwhile, speaks for a more familiar kind of 1 Percenter who thinks that business has all the answers and government should claim as little private wealth as possible. These elites embrace what New York Times columnist Ross Douthat last week called the “competitiveness revolution” – a drive for greater efficiencies and higher profits in which private equity firms like Bain Capital are heroes, not villains. Most of these people aren’t concerned about inequality, believing that all boats will rise faster in a laissez-faire economy and the fantastic heights of the yachts will only serve to inspire people. The best thing government can do for the little guy, the logic here goes, is get out of the way of private enterprise.
This clash of elites is hardly new. It has been taking shape for years now as the economy has diversified, with vast new wealth created by highly educated knowledge workers who live and work in blue states and, by and large, believe in government and elite experts. Barack Obama, so obviously smart and logical, with two Ivy League degrees, is a near-perfect fit for this crowd.
Romney is a less ideal candidate for his pro-business constituency, at least according to his mixed record on taxes and government as Massachusetts governor. But he’s close enough, with his CEO credentials and a set of policy positions that blogger Ezra Klein noted recently put him well to the right of George W. Bush.
While the media often imply that Obama has been abandoned by his affluent supporters and is now banking on populist appeals, campaign finance data supports the notion of a divided 1 Percent. Obama has been raking in big bucks from wealthy supporters – nearly as much as all the Republican candidates combined – and Democrats overall have raised more money in the current election cycle than Republicans (not including outside groups) – despite the attention-grabbing GOP primaries under way. As in the previous few elections, Democrats are doing great with lawyers, tech leaders, entertainment professionals and other educated elites.
Even many Wall Street donors have stuck by Democrats – with data showing that the party that enacted the Dodd-Frank financial reform law has received 43 percent of all contributions made by the securities and investment sector for the 2012 election cycle. Democrats have even outraised Republicans among venture capitalists, arguably the brainiest of the money types (although this time around the GOP has a big edge among hedge fund managers).
One telling piece of data is that employees of Bain Capital have given more money to Democrats than Republicans in this election cycle, just as they have in every election over the past decade.
Even if Obama really were a fire-breathing populist, which he’s not, the realities of funding his re-election campaign would stop him from going down this path. The dominance of money in our election system means that Democrats can only veer so far to the left – no further, say, than what your typical moderate liberal at Google or Dreamworks thinks is all right.
To be sure, the 99 Percent will get a choice in this year’s presidential race, and that choice will be clearer than in many past elections, with the candidates offering distinct visions of economics and government.
But let’s not kid ourselves: Both of these visions have backing from a significant slice of the 1 Percent – otherwise they wouldn’t be on the table.