THE AUDACITY OF AMERICA´S OLIGARCHY / THE FINANCIAL TIMES OP EDITORIAL

The audacity of America’s oligarchy

A billionaire running for president would risk a second Trump term

Edward Luce


Former Starbucks chief Howard Schultz says he can tackle the broken system. But when it comes to policy, he is wedded to the status quo © AFP


The Democratic party has been put on notice. If it picks a pro-tax candidate to take on Donald Trump next year, a billionaire will probably enter the US presidential race as a spoiler. Whether that is Howard Schultz, the former chief executive of Starbucks, or someone else, is secondary. Any third-party plutocrat would have the means to split the vote and enable Mr Trump’s re-election. The inference is clear: a large chunk of America’s plutocracy would risk a second Trump term to keep their taxes low.

This is no trivial consideration. Independent candidates have changed the result in three of the past seven US presidential elections. Even a 1 per cent share of the vote, which is what Jill Stein, the Green party candidate, received in 2016, can tip the electoral college. Hillary Clinton won almost 3m more votes than Mr Trump. But she lost Wisconsin, Pennsylvania and Michigan by 77,000 — roughly half of what Ms Stein garnered in those states. She spent just $3.6m in total on the 2016 race. It was enough to change history.

With a net worth of $3.4bn, Mr Schultz could spend a hundred times what Ms Stein did yet it would amount to barely a tenth of his wealth. Should Democrats nominate a candidate who would hit the likes of Mr Schultz with a wealth tax, his ability to neutralise that threat would be considerable. Even if he decided not to run, the mere prospect could intimidate Democrats into choosing a more plutocrat-friendly candidate.

Is this good for American democracy? Mr Schultz argues that US politics is broken by the “extremist” duopoly of the two-party system. Each is addicted to the “politics of revenge” rather than finding commonsense solutions to the country’s problems. It will take someone of Mr Schultz’s calibre to break the mould.

There are three weaknesses in Mr Schultz’s platform. The first is false equivalence. Nobody in the field of Democratic hopefuls compares with Mr Trump. Until the emergence of Mr Trump, neither party came close to choosing someone who was willing to allege a rigged election before it had taken place. But even before he came along, Republicans had moved far further to the right than Democrats had moved to the left. Scholars call this “asymmetric polarisation”. Defining the midpoint between the two as common sense confuses form with content.

Second, Mr Schultz’s boldness is misleading. His big idea is to disrupt a broken system. When it comes to policy, however, he is wedded to the status quo. He described a proposed 2 per cent wealth tax on those with a net worth higher than $50m and 3 per cent on those worth more than $1bn as “ridiculous”. Likewise, the Democratic “Medicare for all” healthcare proposal was “un-American”. Others in his wealth bracket agree. Michael Bloomberg, the former mayor of New York, who is worth about $40bn, said that such wealth redistribution would turn the US into Venezuela. The difference is that Mr Bloomberg is thinking of running as a Democrat.

The third weakness is the idea that people who have run a business are uniquely qualified to lead. It remains to be seen whether Mr Trump’s record will generate scepticism about that claim. He built his name in property development. Mr Schultz ran a coffee store chain. “I have a 30-year plus record of being able to solve complex problems in unique ways,” he told NPR this week. Among Mr Schultz’s prize fixes was ensuring Starbucks paid super-skinny taxes. In the UK, it paid a rate of just 2.8 per cent until it was forced by a campaign of “tax shaming” to pay a little bit more. Either way, Mr Trump seems to have spoken for other billionaires when he claimed that “I alone can fix it”.

Which begs the question, what is it that needs fixing? Mr Schultz’s view is that America’s embittered politics can only be saved by amateurs. People in politics are too compromised.

Another view is that the state of US politics reflects what is happening in its economy. Acute inequality breeds oligarchy. Just as the middle class is being hollowed out, so the political middle ground is retreating. Mr Schultz epitomises that reality. That a billionaire could change the outcome in a democracy of 330m people might, in itself, be a sign of a broken system.