Thursday, August 03, 2017

Dark Money and the new American politics

Last weekend I finished Dark Money by Jane Mayer, which appeared last year.  It was marketed, largely, as a history of the involvement of the fossil fuel magnates Charles and David Koch in American politics over the last few decades, but it is much more than that.  I intend in what follows to summarize what I found in the book, but from a slightly different perspective than Mayer’s, and without much of any attention to the voluminous, and fascinating, personal data that she provides about the Kochs and other financiers of our new “conservative” political movement.  Instead I am going to treat the book as the first draft, as it were, of a genuine political history of the last 40 or 50 years—because it explains more about where we are and how we got here than anything else that I have ever read.   Mayer leads her readers through the story in rough chronological order, and I recommend the book to everyone.  I on the other hand am going to try to identify its major features in an effort to explain how we got to the miserable point at which we find ourselves.

Charles and David Koch are the most striking example of extraordinarily wealthy Americans who have had an outsized impact on the politics of the last forty years—and whose impact is reaching a new peak right now.  They followed in the footsteps of their father Fred, who in the 1950s was one of the founding members, along with candy manufacturer Robert Welch, of the John Birch Society.  Nothing illustrates what has happened to American politics in my lifetime in more striking fashion than this.  The ideas of the John Birch Society, a group of fanatically anti-government lunatics who in the 1950s identified Dwight D. Eisenhower as a member of the international Communist conspiracy, are now the single most influential set of ideas in American political life. Their main tenets are an unlimited faith in free enterprise and a conviction that government attempts to moderate the negative impacts of capitalism are simply a power grab designed to establish dictatorship.  And because of the success of their political movement, their fortunes have grown by orders of magnitude over the last few decades.

In addition to the Kochs, the superrich political elite has included John Olin, a chemical manufacturer; Richard Mellon Scaife, a scion of a Pittsburgh family prominent in banking and industry; and Harry Bradley, another Birch Society acolyte who ran the Allen-Bradley Electronics Company in New York.  In the middle of the twentieth century, when marginal income tax rates topped out at 91%, these men had all taken advantage of a provision in the tax code—first used by the Rockefeller family—to create a “philanthropic” foundation to shield substantial portions of their enormous income from taxes.  Unfortunately, the definition of philanthropy has been broad enough to include the subsidy of a particular ideology—and ultimately, direct intervention in politics.  That one tragic flaw in our tax code has reshaped opinion and redistributed power at every level of American government.

            Now I have rarely been impressed by any of the ideas coming out of the new Right during the last few decades, but like many liberal Democrats, I suspect, I have assumed that conservative intellectuals had honestly come by their ideas.  I am not suggesting now that they have lied about them, but Mayer leaves no doubt that the entire new right wing intellectual establishment was created from the ground up by the handful of major benefactors listed above.  Both the American Enterprise Institute and the Heritage Foundation—the two centers of conservative “thought” in Washington—were originally funded largely by Richard Mellon Scaife. The Bradley and Olin Foundations were also powers behind the Heritage Foundation, and the Kochs have been involved as well.  I have always thought of the Cato Institute as a nest of principled libertarians—partly because it tends to oppose foreign interventions—but it turns out to have been started by Charles Koch.  Charles Murray was an unknown writer before the Olin foundation adopted him and subsidized his first book, Losing Ground, arguing that social programs were hurting the poor.  (Spoiled, perhaps, by success, Murray went a bridge too far when he and Richard Herrnstein argued in The Bell Curve that black people were intellectually inferior to whites.)  And I was amazed to learn from Mayer that the Bradley foundation gives four annual awards of $250,000 each to leading conservative journalists, activists, and intellectuals. Winners have included George Will, Charles Krauthammer, Thomas Sowell, Ward Connerly, Heather MacDonald, Shelby Steele, Victor Davis Hanson, John Bolton, William Kristol, Paul Gigot, Michael Barone, Jeb Bush, Harvey Mansfield, Edwin Meese, Roger Ailes of Fox News, General John Keane, and Charles Murray.

Changing the intellectual climate was step 1 in the program.  Another spectacularly successful front was opened within the American legal system, Started in 1982 with money from the Olin Foundation and affiliates of the Scaifes and the Kochs, the Federalist Society has become a behemoth, an organization of conservative legal thinkers that includes all the conservative members of the US Supreme Court.   That is not all. The Olin Foundation has sponsored two week seminars on Law and Economics for sitting judges, somewhat reminiscent of the seminars drug companies hold for physicians at major resorts.  There they have exposed sitting judges to the evils of regulation and the glories of the free market—and this may explain some of the more extraordinary decisions that federal courts have handed down lately, such as one that limited the legal definition of insider trading to narrowly as to make most prosecutions for it impossible.

Nor is this all: the foundations have not hesitated to challenge liberal intellectuals in their own presumed stronghold, universities.  Using the irresistible lever of their wealth—which no American university, in this day and age, can resist—they have established beachheads such as the Olin Center at Harvard University (promoting conservative ideas on foreign policy) and several institutes at George Mason University, conveniently located in the Washington suburbs.  These have opened career paths for conservative public policy intellectuals—at the same time that mainstream academic departments have been going in directions largely irrelevant to real politics.

This vast intellectual infrastructure works in tandem, of course, with the right wing media, led by Fox News and Clear Channel Radio, to shift public opinion on key events.  The alternative media outlets are largely self-financing, of course, but I was very surprised that another key rightwing organization, Freedom Works—funded largely by the Scaife foundation—had paid Glenn Beck more than $1 million a year to allow them to write his monologues.  And this infrastructure has not only convinced many Americans, and probably most better-off Americans, that social programs do more harm than good, but it has also convinced millions that lower taxes on the wealthy increase economic growth—and, critically, created real doubt as to whether man-made global warming exists.  Mayer traces the campaign against global warming effectively.  It employed some of the same personnel and used the same playbook as the tobacco companies’ earlier effort to create doubt as to whether cigarettes caused cancer—but evidently with far more significant results.  (I am leaving out of this essay the names of many key operatives within the network who have organized particular legal, lobbying and electoral campaigns.  They are the battlefield commanders of our new political struggle.)  The intellectual infrastructure also carries out campaigns against academics and journalists who stand in its way—including Mayer herself.

The other long-running campaign waged by the new right was the attempt to undo a century of regulation of spending on political campaigns. At the dawn of the Progressive Era a consensus emerged that the influence of money on politics had to be restricted, and Watergate had reinforced that lesson. But the counteroffensive against regulation began in the decade after Watergate, won various victories, and culminated in the Citizens United decision, the Kochs’ and their allies’ greatest and perhaps most influential triumph.  The floodgates are now open, and the results are clear for all to see.

The right wing network gained much power over the Republican Party by 2000 and was rewarded by very friendly Bush Administration policies towards the energy industry, which turned fracking loose and set the US on the path to energy independence.  It could not prevent a groundswell of negative feeling against the Bush Administration in its second term, however, or stop the election of a Democratic Congress and Barack Obama.  But it went into high gear to stop Obama from accomplishing very much.  To begin with, implementing a long standing plan to form a mass base, the Kochs and their allies took advantage of the financial crisis to get the Tea Party movement going in 2009.  Their newly won financial power under Citizens United allowed them to intimidate virtually every Republican Senator and Representative with the threat of primary opposition, bringing them all into line for total opposition to the President. The Kochs now hold seminars every year for Republican officeholders, where they are informed in secret of the party line.   They convinced millions of Americans that the financial crisis was really the fault of the federal government.  When Obama threatened the carried interest tax loophole, their lobbying organizations found new allies among private equity titans and hedge fund managers on Wall Street.  All this enabled the Republicans, backed by this network of plutocrats, to win their extraordinary victory in the 2010 elections.  After redistricting was finished with the help of techniques provided by the same set of conservative donors, the Republicans probably had secured control of the House of Representatives for the rest of this decade.

The Koch network has also made a huge and successful effort at the state level, making the Democratic Party irrelevant in large parts of the nation.  Originally founded with Scaife money in the 1970s, the American Legislative Exchange Council (ALEC) now writes draft anti-government, pro-business legislation for state legislatures all over the country.  Local Kochs have also sprung up, such as Art Pope, a North Carolina discount store owner who in the last decade has taken over the state Republican Party and orchestrated its (now partial) takeover of the North Carolina state government.  At the national level, ideological loyalties are still strong enough to allow Democratic candidates to win the popular vote in 4 of the last five Presidential elections, but at the local level, in red and some purple states, there is no alternative force that can stand up to the Koch-led network. And the ultraconservative domination of state legislatures poses perhaps the greatest threat to our democracy of all: a constitutional convention called by those legislatures which could rewrite key provisions of the Constitution along more “libertarian” lines.

Another chapter of this story does not appear in Mayer’s book.  She finished it when Donald Trump’s presidential candidacy had just begun, and he initially exchanged insults with the Kochs, who did not trust him.  Six months into his Administration it seems to represent an unqualified victory.  The Kochs had a long-standing connection to Mike Pence. The DeVos family—the founders of Amway, an organization that has escaped serious legal trouble more than once—has also been a long-standing member of the megadonor network with a particular interest in education, and they have provided Trump with his education secretary.  The EPA and the Department of Energy and firmly in the hands of Koch allies and are now taking the skeptical line on climate change.  New rounds of tax cuts are being prepared.  The Kochs are undoubtedly unhappy about the failure to repeal the ACA, but they now hold more levers of power than they ever did. 

A political revolution has been in progress for more than four decades, a reaction to the New Deal and the more just society that it created.  Fueled by successive rounds of tax cuts, this revolution has created a tiny group of billionaires that now control most of our political life.  This is way, as a widely cited study by Marin Gilens and Benjamin I. Page discovered, the beliefs of average American citizens and broad-based activist groups on key issues have very little influence on policy outcomes, while the beliefs of interest groups have a great deal. It's also why most Republicans will vote for legislation that will clearly hurt far more of their constituents than it will help. This is, I believe, the new America that our current Fourth Turning has created, and like the Gilded Age, it will not be overturned, in all probability, for a very long time.


Bozon said...

Great summary. I checked it out, at your suggestion, but decided I couldn’t get through it.
You have noted in the past the connections of conservative Jews to the origins of the neocon movement. I had had no idea, really, about that.
I am just guessing that the conservative funding ball Mayer discusses was handed off, fairly early, to the more numerous super wealthy gentile conservative stooges, who then ran with it.
The more liberal Jews, who also funded the laissez faire globalization we are all now shackled with, were perhaps both better and bigger funders, big picture.
It was, frankly, after all, the liberal post WWII system which dug us the hole we are in, not the rich gentile or Jewish conservatives, loathsome as they truly also are.
All the best

David Kaiser said...


The neocon movement of conservative Jews started somewhat later. It was triggered by the 1967 war and the Black Power movement--mainly the former, which showed Israel almost alone in the world. The Kochs, Bradleys, Olin and the rest of them had been active for some time at that point. Eventually, alliances were struck, and I believe the Weekly Standard, the main Neocon organ--run by Bradley award winner Bill Kristol--also gets funding from some of the people in Mayer's book.

Bozon said...

Many thanks for this note. I am planning to read a book called "Hollywood Left and Right" next. People tend to think of Hollywood as more left than right, but that seems not to have been the case re its influence on American politics.

Also bought a copy of "Jewish Power", but haven't touched it yet.
All the best

Jude Hammerle said...

Dear Dr. Kaiser,

There exists a popular misconception that money spent on marketing changes minds. In fact, marketing spending is powerless to effect change--particularly among buyers making the central, normative statement--in the absence of a well-conceived strategy. I believe (and believe I can prove) that the correct definition of a well-conceived strategy is one that confers a competitive advantage upon target buyers vis à vis other buyers (in this case voters or elected representatives).

Thus a more accurate (and arguably more engaging) title for the subject book and this post would be Dark Strategy.

Conservatives have accomplished something very difficult--the turning of the popular center--by effective implementation of their well-conceived strategy. As such, the conservative movement of the past 20 years provides a learnable moment to revolutionaries and counter-revolutionaries everywhere, but only to those willing to abandon their faulty assumptions regarding money, power, and change.

Jude Hammerle

Bozon said...


An interesting idea:
"And the ultraconservative domination of state legislatures poses perhaps the greatest threat to our democracy of all: a constitutional convention called by those legislatures which could rewrite key provisions of the Constitution along more “libertarian” lines."

Palmer has a wonderful chapter in The Age of the Democratic Revolution, Volume I, Ch. VIII. The American Revolution: The People as Constituent Power. It goes into some of the theoretical issues the Philadelphia Convention raised, and similar issues a convention such as you describe might also involve.

All the best