PLUTOCRATS, THEN AND NOW

Abstract: The essay contrasts the philanthropic legacies of historical American plutocrats, such as Andrew Carnegie and John D. Rockefeller, with the failings of modern billionaires like Elon Musk and Donald Trump. While the "Robber Barons" of the past made lasting contributions to society despite their exploitative practices, Musk's philanthropy is critiqued as self-serving and tax-advantaged, and Trump's business ventures are characterized as inept and culturally insignificant. The essay warns of the erosion of American democracy under a "kakistocratic plutocracy," exacerbated by unchecked executive power, flawed campaign finance laws, and economic policies that disproportionately harm low-income households. It concludes with a call to action for liberal protest and civic engagement to counter these threats.

I was reminded by a recent piece in the New Yorker magazine reminiscing about American plutocrats of yore that it was customary for them, after accumulating massive riches, to at least make some attempt to reward the society that had gifted them. Andrew Carnegie gave us Carnegie Hall; John D Rockefeller started the University of Chicago; Cornelius Vanderbilt funded Vanderbilt University and Grand Central Terminal; Alexander Casatt was essential to the planning and construction of Penn Station and the tunnels under the Hudson River; and JP Morgan who was considered America’s greatest patron of the fine arts, the driving force behind the Metropolitan Museum of Art, a trustee and major donor of the American Museum of Natural History for 44 years.

These super-rich Robber Barons, each and every one, clearly did things that were criminal by today’s standards, and may have caused hurt to large numbers of people along the way. They crushed competition, exploited their working men, and created monopolies. Yet eventually, whether out of a sense of penance or seeking redemption (this was before the era of massive tax benefits from charitable contributions). they made huge lasting contributions to America.

And then we have Elon Musk who celebrates decimating American education but couldn’t spell “Department” in his recent tweet:

There is considerable controversy about his supposed philanthropic gestures, but it seems they consist mainly of a multi-billion dollar transfer of appreciated Tesla shares to the charitable foundation which he established and from which he can direct expenditures. Let it be noted that donating greatly appreciated stock shares allows the donor to take the tax deduction based on the value of the shares at the time of transfer, with no tax whatsoever on the huge appreciation gained from the time they had virtually no value when the company was founded (and started by losing money) to the day they were hugely appreciated. In other words the $5 billion write-off cost Musk virtually zero!

Trump’s contributions to American culture or industry? A string of defunct casinos (a friend recently put the question: how do you lose money on a casino?) and glitzy Trump tower. “When a clown moves into a palace he doesn’t become a king, the palace instead becomes a circus. — Turkish proverb quoted recently by Dan Rather

As I write this, the American markets already shed five percent of value which can only be attributed to what is called the Dunning-Kruger Effect manifested by both. This incompetence not only leads to poor performance but also prevents individuals from recognizing their lack of skill. Sadly the result of Dunning-Kruger is that the dumber the person, the less able he is to perceive his own shortcomings; it’s a vicious circle. The explanation for Elon Musk’s lack of comprehension about the function of government could be his self-described autism, perhaps greatly talented in one tiny slice of intellect but thoroughly inept in most others, including a mind-boggling lack of social skills. But what is Donald Trump’s excuse for being such a self-absorbed mediocrity? I posit four things: first, an incredible insensitivity and lack of empathy such that he just doesn’t give a damn about anybody but himself; secondly, a complete unwillingness to learn, to read, to pay attention to the essential details of government or economics; third, an ego so gigantic and misshapen that he succumbs to the most obvious fawning flattery and obsequiousness he’ll do the most absurd things, like for far-right activist and possible lunatic Laura Loomer, who presented him with a list of people she said were disloyal to the president, and got him to fire six essential National Security Council officials; and lastly, a mind crippled by low functional intelligence or age-related brain atrophy or, I suspect, a potent combination of the two.

How else to explain hitting Myanmar with a 44% tariff days after the earthquake that killed over 3,000, devastated the country’s economy and -- because of Musk/Trump firings the U.S. was unable to provide much in the way of emergency assistance, yet there are no additional tariffs imposed on Russia and North Korea.

More telling that he just doesn’t pay attention is the 10% “reciprocal” tariff the blowhard imposed on the Heard and McDonald Islands (included in the handout accompanying the self-fawning April 2^nd tariff speech) whose only “occupants” are . . . wait for it . . . not people but Antarctic penguins and seals!

I wonder just what items penguins manufacture that we import, and precisely which American companies he wants to resume production to bring commerce back to our shores.

According to wired.com, businessman Trump

“reportedly told transportation secretary and Real World/Road Rules Challenge: Battle of the Seasons champion Sean Duffy that he should hire Massachusetts Institute of Technology graduates to work as air traffic controllers. The average starting salary for an MIT undergraduate is $126,438. The starting salary out of Air Traffic Controller school is $43,727. Business savvy!”

Trump is a bull in a china shop with the economic nous of a petulant child.

One thing about Trump’s business acumen is clear: he has always been a lousy businessman and a perpetual loser. In 2019 the New York Times, having gotten access to some of Trump’s older tax information, detailed record losses between 1985 and 1994 exceeding One Billion Dollars (actually $1,170,000,000); in 1991 Trump’s achievement alone accounted for 1% of all losses reported by Americans that year! Of course he was able to put these losses to good use, not paying any income tax for years following because of the carry-forward deductions — something which probably should be pared back if not abolished in any fair tax system. While losing all this money , Trump was still sponging off daddy Fred and living the high life in New York.

As further evidence of his business ineptness, had he simply taken the money given him by daddy Fred Trump and put it in U.S. market index funds -- the least sophisticated investment strategy possible -- he would today be worth at least twice as much as his current fortune! He has incompetently -- with several bankruptcies along the say -- made a billionaire’s sow’s ear out of his silk purse.

This kakistrocratic plutocratic duo and their minions did not remake government, but broke it -- possibly beyond repair. From the Economist:

The inspectors general, whose job is to look for waste and fraud, have been fired. DOGE has sacked people at the FDA, the agency that approves drugs for medical use, which will slow innovation. . . . .

Worst is that DOGE’s actions so far look as if they are designed not to make government work better, but to expand the president’s power and root out wrongthink. . . . . . [T]here are the distributional consequences. A bigger share of low-income workers’ paycheques goes on consumption, and more of their spending is on basic goods such as clothes and food that are vulnerable to tariffs.

And Mr T’s response:

I think it’s going very well. It was an operation like when a patient gets operated on and it’s a big thing. I said this would be exactly the way it is … We’ve never seen anything like it. The markets are going to boom. The stock is going to boom. The country is going to boom. . . . . The rest of the world wants to see is there is any way they can make a deal. They’ve taken advantage of us for many years … I think it’s going to be unbelievable . . . .

So we await the golden age, any day now. The thing that never fails to amaze, however, is that no matter how much damage this president causes, his lemming-like followers in Congress show no interest whatever in bringing it to a halt -- even as they watch their own investments diminish as the economy falters. They evidently have truly drunk the cool-aid and will follow DT to the death rather than preserve even their own fortunes. Jonestown on the Potomac!

Stealing a line from the NY Times Ethicist, “it would be nice if our democracy didn’t come with a V.I.P. lounge”, but sadly today it plainly does. Nothing prevents an Elon Musk from using his billions to pervert the course of American democracy, and unless changes are made, starting with reconsidering the decision in Citizens United where the Supreme Court authorized virtually unlimited use of private funds to influence elections, we could be witnessing the twilight of American democracy. We need real campaign contribution laws, from local races to the presidency; a good place to begin will be by publicizing widely every single donation over a set minimum.

But all that awaits a better day -- if and when that happens. For now we can only tally the toll of the current plutocracy and do our best to create an effective liberal protest. As always I end by asking that everyone believing in social democracy try to do something -- anything -- to make our voice heard. And please pass this essay along to anyone who might like to join our conversation. I leave you with some words from Cory Booker’s remarkable speech:

“this is the time to stand up, to speak up. This is the time to get in some good trouble, to get into necessary trouble. I can’t allow this body to continue without doing something different – speaking out. The threats to the American people and American democracy are grave and urgent. And we all must do more. We all must do more against them.”

Arne Werchick, after fifty years as a litigation attorney, pro tem judge, law lecturer, former Presiding Arbitrator of the State Bar of California, and past president of the California Trial Lawyers Association, moved to Hawaii and lives with his wife Ruth and their rescue dog Topaz. He writes Out of My Liberal Mind (werchick.substack.com), a periodic blog about issues of concern to the liberal community and can be contacted at liberalmind@werchick.com.