The Man In the Billionaire Tower

Why This Topic Is Significant: Inequality in all forms is quickly become the defining trait of the Second Gilded Age. When Donald Trump said that “The American Dream is dead” during his 2016 campaign, most elites dismissed him as a demagogue, while many (if not most) Americans understood the reality of his declaration. Understanding and addressing why Americans believe the American Dream is out of reach is vital to the success of any political party in 2020 and beyond.


The New York Times recently published this piece about an all too common story that gets at the heart of the Second Gilded Age:

In Manhattan, where multimillion-dollar real estate sales are downright routine, a hedge fund tycoon has managed to set a new standard for conspicuous consumption by paying a fortune for an unfinished piece of property in the sky.

The billionaire, Kenneth C. Griffin, spent $238 million for a penthouse at 220 Central Park South that is still under construction, making it the most expensive residential sale in United States history.

The real estate industry dominates New York, and it’s one reason behind why groups like the Independent Democratic Conference (IDC)—a renegade group of conservative Democrats who often allied themselves with Republicans in the state Senate—was able to exist for so many years. Real estate developers funneled seemingly endless amounts of cash donations to IDC candidates for years by exploiting things like the LLC tax loophole. Considering real estate’s outsized influence over key votes in the state Senate, it’s not surprising moguls like Griffin get to do terrible things like this in a supposedly liberal region:

What’s more, in a New York tale that is not entirely uncommon, the 79-story building where Mr. Griffin’s penthouse will soon exist was built after the landlord evicted dozens of middle class tenants from their rent-stabilized apartments in what was a fairly modest, white-brick building with 20 floors.

I know I’m supposed to be a loyal Democrat and sing the praises of politicians, money, and power, but this routine is terrible and undermines the sincerity and effectiveness of the Democratic message. We can’t control what the Republicans do, but we can control our own house:

With a net worth estimated at $10 billion, Mr. Griffin, founder and chief executive of the global investment firm Citadel, is among the richest people in the world. And in recent years, Mr. Griffin has become increasingly willing to flaunt his wealth, spending lavishly on modern art, philanthropy and trophy real estate, even as income inequality is roiling the national political debate.

There’s that phrase again income inequality. But what we’re discussing here is not income at all in the way the United States treats it under our tax code — but wealth. We don’t really tax wealth that much in this country, we tax work.

But surely there are some good billionaires out there, Bill Gates has done some great things on the continent of Africa, with efforts and substantial progress being made toward eradicating Malaria and Polio there. But all too often in this era he has proven to be the exception, rather than the rule.

Mr. Griffin has declined to join other billionaires in a pact to donate the majority of their wealth to charity. Created by Bill and Melinda Gates and Warren Buffett in 2010, the Giving Pledge has more than 150 signees. . . .

Fellow financiers said Mr. Griffin should be applauded for his philanthropy, rather than vilified for his spending. John W. Rogers Jr., the chief executive of Ariel Investments, who serves on the board of the University of Chicago with Mr. Griffin (as well as on the board of The New York Times Company), declined to comment on his real estate spending. “The key thing is that he’s decided to be generous now,” Mr. Rogers said. “Ken is a role model for the next generation of hedge fund managers.”

Mr. Griffin has cited his maternal grandparents as inspiration for his philanthropy. They ran a fuel oil business in Illinois, and when some customers could not pay their bills during the winter, his grandparents would extend them credit. . . .

That Mr. Griffin is spending so freely at a moment when populist movements are gaining momentum around the globe struck some critics as especially tone deaf.

Indeed.

Mayor Bill de Blasio has long pushed for a tax on millionaires earning more than a certain amount of money, but legislators in Albany have not supported that plan. On Thursday, he called for an expansion of the mansion tax. Currently, buyers of homes that sell for $1 million or more are required to pay a 1 percent tax. The tax, the mayor said, needs to be adjusted to “explicitly” target “high-value purchases” to generate extra revenue that could be used to create affordable housing.

Mr. de Blasio, who has promoted himself as a national voice against income inequality, has struggled to address the issue, which is acute in a city with a housing crisis, poverty and extreme wealth. About 79,000 people, most trapped by out-of-reach rents and low wages, are homeless, a record number, and the most of any city in the United States, according to the Department of Housing and Urban Development.

Let’s use this point to segue into the issues surrounding policy attempts to combat poverty. The political party, movement, or leader(s) who can put together a working coalition that effectively combats poverty and provides relief to a struggling middle class will win the future. I believe that combating poverty is the issue that could bring together both urban and rural America some day. At least that’s the dream.

When candidate Donald Trump said the “American Dream is dead,” and the media wrote that off as too cynical, what Americans who struggle every day heard was the truth.

For most of my life, I’ve heard from countless people that they believe that the American Dream is out of reach. What makes the debt-laden, paycheck-to-paycheck experience of the second Gilded Age so frustrating for so many—to the point where populist revolts have sprung up on the right and the left—is that the permanent governing class in this country can’t fathom why lower and middle-class Americans think economic mobility is a relic of the past. The elite can’t comprehend that many (if not most) Americans believe the promise that “if you work hard and play by the rules, then the sky’s the limit” has been broken by greed and corruption. And for some, that promise was never really felt true.

Why do everyday Americans feel this way? Are they envious of the multimillionaire’s penthouse suite?

No. It’s not about envy. It’s about their abiding belief in the values of fairness and human dignity.

The dignity of work isn’t a bootstraps message, it’s a human dignity message. If you worked hard, did your job, and took time away from your family, then you damned well should be compensated with a fair and living wage. If the bosses, managers, robber barons, and CEOs can’t fulfill their part of that covenant, then something’s amiss. And that’s how we got ourselves a real estate crook and reality TV star elected President of the United States.

The Haves’ covenant with the Have Nots has been broken. Now we have a President Trump as the leader not just of the Republican Party, but the Free World. In the deepest blue places in America like NYC, LA, San Francisco, and Seattle, the Men in the Billionaire Towers are driving up real estate prices while the governments dominated by Democrats seem powerless to stop them.

Do me a favor—because I’m not sure if this is just me or if it applies to everyone’s Google account—search for “Party of the Rich” for me. Look at the top 20 articles. Almost every single one of them is about how the Democratic Party has become the party of the rich. We debate the merits of this argument, but it should be clear to all that there’s some truth to it.

Eventually, the substandard outcomes for working people and families, as well as massive levels of economic inequality in major cities, is going to lead the Democratic Party into a new trap. Donald Trump, who is in fact a racist, has surfed into the White House on a wave of cultural populist appeals to a disappearing electorate, and buoyed by a clause in our Constitution that seems to cause consternation and protest every 16 years—the Electoral College. Regardless of how we feel about it, the Electoral College isn’t going away any time soon, nor is the fact that Wyoming gets two U.S. Senators.

Despite these structural and cultural challenges, we have some things working in our favor as liberals and progressives. For one thing, our electoral prospects in 2020 looks relatively good. If all of the trends from the midterms hold, and Trump continues to disappoint his base in his partisan fights, it could go very well next year.

But, Republicans have a knack for falling in line and rallying together in the face of adversity, while Democrats like to debate and disagree. This will only become more true as the GOP becomes more ideologically and racially homogeneous and the Democrats become more diverse in ideas, priorities, and experiences.

All that said, the 2020 general election is the Democrats to lose. I believe that in my bones. Chances are better than 50/50 that we’ll earn a W next year, but there’s still an uncomfortably large chance that we’ll lose. And if we don’t win convincingly, the post-Trump Republican Party could recover faster than you think. This is especially true if the right GOP candidate appeals to what seems obvious to most—that railing about economic outcomes would work a lot better than railing about the cultural cosmopolitanism.

The candidate who chooses this path would be doing a tremendous service to America, not just by finally campaigning on the economic struggles, but also by kicking the neo-John Birchers out of the Republican Party. I say this not because I want to give the Republican Party useful advice. I say it because I want to warn the Democratic Party that history is not progressive—history can be won or lost depending on the wisdom of the powerful and the determination of the masses.

 

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