Will Phony Populists Hijack the Fight Against Inequality?
The president himself has made a subtle shift in language, moving away from talking about inequality explicitly and instead speaking in terms of “opportunity.” The Obama economic agenda outlined of late has many echoes of the Keller approach: he wants revenue-neutral tax reform that would lower overall rates and bring home the money that corporations have stashed overseas at a fraction of the standard tax rate. The Obama administration is also pushing hard for more liberalized trade in the form of the Trans-Pacific Partnership (leaked drafts of which indicate that it contains substantial deregulatory language, including for the financial sector), while maintaining a stubborn insistence on deficit reduction. Although it took Social Security cuts out of its recent budget, the administration has expressed a desire to enact them should Republicans come to the table.
Most Democrats, from Obama to Summers, do favor some laudable measures to reduce inequality, such as closing tax loopholes that benefit the very wealthy, raising the minimum wage and strengthening the safety net for the very poor. Those are good policies, but they are not aimed at fundamentally changing the structure of the increasingly skewed economy. “Some of this is just getting back what we lost—just recently lost, not since 1968,” says Dean Baker of the Center for Economic and Policy Research. “It’s not a game-changer.” CEOs would be forced to spread a bit more of their profits around, but they’d still be winning the game.
Essentially, such proposals square with the strategy advocated by Zakaria. “This strikes me as the right approach: how to get people to move up and thus create a thriving middle class. If, in the process, the Google guys stay rich, so be it,” he has said.
Incidentally, the “Google guys” constitute an emerging power center in the Democratic Party. A group of Silicon Valley moguls—led by Sean Parker, a Facebook investor and one of the founders of FWD.us; Ro Khanna, a lawyer and former Commerce Department deputy assistant secretary; and Shervin Pishevar, a venture capitalist—are at the forefront of a concentrated effort to increase the clout that the tech sector wields on a broad range of issues. Citing a sense of social conscience, they are funding political advocacy groups, advising the White House, writing legislation, spending millions on lobbying and even—in the case of Khanna—running for office themselves. “We need to put our heads together and seize control over this system, quickly and stealthily, before incumbent players wake up to what’s happening,” Parker said last year.
But it’s not clear that this Silicon Valley “populism” extends far beyond the tech sector’s specific interests. Even the moguls who acknowledge inequality seem blithely oblivious to its scale—and to their own complicity. Twitter co-founder Jack Dorsey, for example, acknowledged that companies like his bear some responsibility for the deepening economic divide in San Francisco; he has also said that one of the remedial efforts he was most proud of was starting a weekly neighborhood outing to pick up the trash.
Then there’s the main “Google guy,” chairman Eric Schmidt (net worth: $8 billion), a major Democratic donor who said in 2012 that he was “very proud” of his company’s tax practices, which shield billions annually from the federal government.