Dem
47
GOP
53
Here is the question we put before readers 2 weeks ago:
M.C. in Glasgow, Scotland, UK, asks: Democratic administrations have a track record of being relatively good for the economy and for government debt. Even much of the compassionate welfare spending and healthcare reform turns out to provide excellent value for money: That investment in "human capital" results in productive tax-paying workers in the long term.
So, why are wealthy capitalists so pro-Republican?
And here some of the answers we got in response:
M.B. in Noble, OK: I am an Investment Advisor. When I go to my company conferences, my daughter and I are one of only a few Democrats (or, at least, Democrats willing to admit it).
One thing is true for all rich investors, and a few poorer ones: the desire to pay little or no taxes! As an advisor, I have many techniques to help rich people get richer by legally reducing their tax burden. Other advisors who want to grab rich people as their clients begin to mirror them (echo chamber) and thus encourage their rich clients to continue to vote Republican, right or wrong.
In my 30-plus years in the business, I do better when the Democrats are in the White House. I can't understand why my colleagues don't see that, because I can still use the tax reduction strategies and yet gain from Democratic control.
J.G. in Farmington, CT: Great question, and there's a couple of ways to answer this: the economic and the psychological:
- Economic: While it is true that overall economic prosperity is generally better under Democrats than Republicans, this is only loosely correlated to the net worth of, as you put it, wealthy capitalists (which we may define to be individuals with controlling interest in businesses and who are considered by the banking to be "ultra high net worth"—at least $30 million in liquid assets). The wealth of these individuals does not depend on wage compensation like the vast majority of the working population; instead, it is primarily held in equity and fixed income (bonds) and relatively shielded from all but the most severe of economic downturns. Equity markets in particular are poor predictors of economic health. In 1982, Paul Samuelson said, "The stock market has predicted nine out of the last five recessions" (by 2019, it was 13 of the last 7). The upshot is the economic well-being of these individuals isn't necessarily furthered by sound macroeconomic public policy, which tends to focus its benefits on increasing wages for lower and middle income groups.
In addition, Democrats are far less likely to support reductions in the marginal rates on higher-income tax brackets, corporate taxes, or taxation of earnings other than wage income such as carried interest, capital gains, and estate inheritance, which directly impact the income, if not the wealth, of these individuals. Democrats, especially the left wing of the party, are far more likely to propose wealth taxation at the federal level, and even though the political viability of such proposals is nil—not even a majority of the party agrees with them—such proposals tar the rest of the Party.
The second economic dimension is not fiscal but regulatory. Businesses face increased regulatory pressure under Democratic administrations, not just because of newly proposed rules, but also because of increased enforcement of existing rules. The DOJ, EPA, SEC, and other government apparatus have wide latitude to file criminal or civil cases against corporate offenders. They may use this latitude increasingly—or not at all—depending on political priorities, whether the White House admits it or not. And while increased regulation often benefits the wider population or the economy as a whole, in the short term it imposes additional costs on the targeted businesses that weigh upon profitability and shareholder equity.
Fundamentally, the regulatory question is "Can I externalize my costs?" and with a Republican president, the answer is "yes." A Republican is far more likely than a Democrat to allow a business, its owners, its corporate officers, or all three to pollute the air and waterways, self-deal, steal wages, cheat suppliers, bribe government officials at all levels and, internationally, manipulate stock and debt, extract rent, knowingly sell unsafe or risky products and services, or seek monopolistic market domination—both by repealing rules and eviscerating the regulatory infrastructure by halting ongoing investigations or casework, firing or reassigning enforcement personnel, appointing "business-friendly" judges (e.g. FedSoc reptiles like Neomi Rao and James Ho and Trevor McFadden, who also double as reactionary dimwits in the culture wars), defunding the pursuing agencies, or installing Trojan horses like Lee Zeldin to poison them from the inside. Trump is far from the first Republican to do this; George W. Bush also had a habit of putting industry lobbyists in charge of the agencies they'd been fighting, right up until the Senate voted to confirm them.
One might argue that good business owners should, in fact, be invested in America for all the reasons you mentioned—well-educated, happy and healthy workers make more profits—but the minority of individuals who tilt this way do so out of personal interest in socioeconomic equality, a desire to influence outcomes on pet issues like climate change, or a magnanimous sense of noblesse oblige, rather than business health. It is far more common for a business owner to maintain a maniacal focus on quarterly net income and free cash flow, and for those owners who do not own a majority of their businesses, losing that sociopathic shortsightedness immediately exposes them to distracting and expensive proxy fights from "activist investors" (misanthropic malcontents with too much time on their hands) and shareholder threats to control or legal action for breach of fiduciary duty.
In conclusion, "What's good for GM is [not necessarily] good for America" (brackets mine) and has not been for some time.- Psychological: While Democrats are more likely to demonize the wealthy with rhetoric, the issue is more fundamental than that.
Paul Krugman and others wrote about this in the aftermath of the Great Recession, and Krugman returned to the subject recently, this time about tech billionaires.
In every era there's a group of so-called tech bros, finance bros, masters of the universe, titans of industry, robber barons—whatever you want to call them—who demand obeisance, deference and respect for making a lot of money. With individuals whose fortunes are self-made, and who hold a controlling interest in and actively manage large, complex organizations, there can be a tendency to think of oneself as especially gifted in areas not of one's expertise. In other words, because you're good at being a rocket scientist, it automatically makes you good at being a brain surgeon.
Working stiffs like you and me instinctively understand that this is the height of hubris. These nincompoops don't understand this. Government actions to rein in the more detrimental ideas these Careless People might have are greeted with almost apoplectic rage. Their ideas are superior, you see, because those ideas came from someone who made a lot of money.
They also don't like to be reminded that they might have to play by the same rules as everyone else. Rules are for little people—whether they're federal ("I'll market mortgage-backed securities filled with garbage debt to pension funds and then enter into credit default swaps to bet against them") or state ("I'll get a judge elected who will overturn an unfavorable lower court decision on appeal, and be so blatant about it that Grisham will base a novel on this") or local ("I'll buy up seven adjacent houses in Palo Alto, interconnect them all with underground passageways and use one of them as a private school for my and my wealthy friends' kids"). That last one is real, by the way. The mega-property also has a 7-foot-tall statue of Priscilla Chan, which, let's be honest, is just weird.
This is not a new phenomenon. Over a hundred years ago, Cornelius Vanderbilt said, "Law? What do I care about law? Hain't I got the power?" Today, we have pointy-headed paragon of selfishness Marc Andreessen loudly complaining to Ross Douthat that he flipped support from Biden to Trump because Biden had the temerity to crack down on crypto, a product almost exclusively used for baseless speculation and illegality, and one with an atrocious carbon footprint. But crypto startups are profitable for Andreessen Horowitz, and therefore, in his view, they are inherently virtuous, not pits of sleaze with zero social utility. (Douthat failed to challenge him on this and every other point in that infuriating interview, an example of a media-worship-of-wealth phenomenon, which is a whole other thing.)
Robert Caro once wrote that power doesn't necessarily corrupt—power reveals. So, too, does wealth. It's become clear that ultra-high-net-worth, with rare and noteworthy exceptions, will only refer to financial assets and not to anything intrinsic to character. The rot goes deep.
By the way, "Baby You're a Rich Man" played over the final scene of The Social Network. No one ever accused Aaron Sorkin of being subtle.
R.H. in San Antonio, TX: Because the difference between a net income of $35M a month and $80M a month is a helluva lot less than the difference between $35K a year and $80K a year.
People at the bottom of the income distribution have an existential interest in their economic well-being, while people like the Koch interests are more interested in money as a way of keeping score.
They'll give $20M to get their name on a performing arts center because having your name on such a building boosts your "score" more than having an extra $20M or so in your estate for your heirs to fight over.
Money at that level is an abstraction.
Supporting a candidate who will shovel more money at you is a way to increase your score.
That's all it is—they're keeping score.
S.D. in York, England, UK: Wealthy capitalists often back Republicans because their incentives are tuned to the 4-to-6 year political cycle. Markets reward immediate gains. Lower taxes, light regulation and weak labor protections can lift profits and share prices quickly, which suits fund managers judged on quarterly performance and executives paid in options. The time horizon drives the preference.
A different logic applies when the plan is strategic investment over decades. Building a skilled workforce, deep research capacity and reliable infrastructure does not pay out in one Parliament/Congress. It compounds over 20 to 50 years. Family-owned firms that do not answer to quarterly targets understand this and favor stability, steady reinvestment and patient growth.
China illustrates the power of longer cycles. Planning is framed in multi-decade terms, with very large, sustained spending on science as a central lever. Science investment expands the skills base, drives new industries and improves food security and healthcare. Those gains arrive in waves, not in quarters. They depend on continuity of funding, institutions and logistics.
Many Western democracies struggle to commit at that scale in science, education, healthcare, infrastructure and supply systems. The result is a disconnect between what delivers durable prosperity and what wins the next election. For capital that is rewarded now, a short-game party looks rational. For liberal democracies that want resilience and higher productivity across generations, the decisive variable is strategic investment that survives changes of government. How to achieve that in a polarized democratic system is the challenge of our time.
L.C. in Brookline, MA: M.C. in Glasgow asked: "Democratic administrations have a track record of being relatively good for the economy and for government debt."
It should be obvious, as of many decades ago, that Republican advertising about fiscal responsibility is just brazenly false advertising. The Republicans want to crush the government under debt so that it can never restrain them. Grover Norquist called this "starving the beast"...
M.C. continued: "Even much of the compassionate welfare spending and healthcare reform turns out to provide excellent value for money: That investment in 'human capital' results in productive tax-paying workers in the long term."
The super-rich did not get to be super-rich by being fair to other people. They got to be super-rich by making sure that everything possible went into their pockets, at the expense of everyone else (or in many cases their parents did this for them, and they continue the tradition).
M.C. wound up: "So, why are wealthy capitalists so pro-Republican?"
Because wealth is not just about greed. It's also about envy. After all, when everyone's super-rich... no one will be.
J.M. in Portland, OR: In the same way it was difficult to impossible for folks who loved Hillary Clinton to understand the deep dislike many (men) held for her, it is as difficult to impossible for those of us who willing pay our taxes and appreciate the value we receive back to understand how much some people, especially the very wealthy, hate to pay taxes. To them, there is no value gained, only the government taking money from them.
S.C.-M. in Scottsdale, AZ: Often times the wealthy really do not understand macroeconomics and what it takes to build and sustain a strong, growing economy. Their concerns seem to be more in line with "What I can do to make sure my business continues to make a profit?" They tend to be anti-regulation because they believe they can make better decisions than some nameless bureaucrat. Taxation to them is theft and I think they really feel there is a tremendous amount of waste in government spending, even though countless studies show that is not the case.
This stereotype is not universal. There are some very wealthy people who are quite liberal and quite knowledgeable about what goes into making a strong economy that benefits everyone.
P.W. in Tulalip, WA: In short, cognitive dissonance and greed. Despite the obvious societal benefits of many taxpayer-funded programs, this subset of voters are very prone to voting based on what benefits them personally, and will shape their "beliefs" around that, coming up with any justification they can think of. In today's media environment, you can easily seek out talking points to help in that venture. For example, there is certainly no way the party that likes to think of themselves as the "adults in the room" actually believes it is good for the country to cut taxes when we aren't even fully funding our existing expenditures. But it is good for this type of voter personally, so they can come up with whatever justification they choose to support the Republican Party. Listen to this type of voter when Democrats are in power—suddenly, the debt is the single biggest issue facing the country.
J.D. in Greensboro, NC: I've got my own theory, so you can take it or leave it.
The wealthy become wealthy and stay wealthy because they have a laser focus on money—making it and not losing it. Plus, they are taxed in different ways than wage earners and can see large chunks of money going out the door and keeping them from maintaining or increasing their revenue stream. Also, unlike average Americans, they don't really see the benefits that tax money gives them—a military that protects their interests at home and abroad, adequate infrastructure that eases goods to market, public education that increases the quality of their employees, and a functioning government that keeps markets stable and enables free trade.
They think their wealth will always protect them from misfortunes that happen to other people in society. It is a type of tunnel vision that infects everything they do.
So for the last 50 years or so, they have worked to elect and persuaded others to vote for tax break after tax break for their lot, ever more increasing the gap that exists between them and nine-tenths of the remaining population. Plus, they are in favor of sneaky taxes on the poor and middle class like the tariff system being implemented. To them this seems "fair," even though it is the wealthy that generally benefit from the stability taxes bring.
It is all about taxes and who wins and who loses.
S.C. in Farmington Hills, MI: Rich Republicans—whether they climbed the ladder or were born at the top—often resist others joining their ranks. It's like a country club that restricts membership. For some unsettling reason, both wealthy and poor Republicans seem to need someone they can look down on. It's a form of social stratification.
E.W. in Silver Spring, MD: It is because human beings evolved in such a way that our decision making is very short-term. That makes sense when your last meal could be your last forever and your only goal is finding food and shelter each day. In such a situation, a close-knit tribe that collectively gathers and guards its resources is a necessity.
That approach seems to have transferred to money. A tax break today is perceived better for the rich than a healthy, skilled, productive workforce in 10 years.
R.E. in Birmingham, AL: Wealthy capitalists don't really care about what is "good for the economy and for government debt," nor do they think about the "long term." They want lower taxes (for themselves) and less regulation, because that makes them richer, right now. The GOP delivers that, and Democrats don't.
B.C. in Phoenix, AZ: I would bet, if you were to do a demographic study of "wealthy capitalists," you would find they are overwhelmingly white guys who are devotees of "Christian" nationalism, and are primarily interested in expanding their own power and wealth. So, the fact that "compassionate welfare spending and healthcare reform turns out to provide excellent value for money" is of no interest to them since it does not directly line their pockets and probably only benefits the Army of the Brown Horde overrunning our southern borders.
It might even be akin to horrible SOCIALISM, and you know their version of American Jesus as a fellow white guy cannot abide that! Who cares how many "productive tax-paying workers" there are, as long the undocumented immigrant servants they have to maintain their mansions know their place!
By the way, I've lived in Phoenix for all but 12 of my 75 years, and have hiked and backpacked all over Arizona. I have never even seen a squad of the Brown Horde, much less an army.
A.H. in Newberg, OR: Because the greedy bastards can't take "YES" for an answer!
Here is the question for next week:
M.C. in Drogheda, Ireland, asks: Nineteenth century Irish patriot Thomas Davis approved of, and acted on, Andrew Fletcher's comment of more than a century earlier: "Give me the making of a people's songs, and I care not who makes its laws."
Who in the USA is writing suitable songs for these times? And what song or songs?
Submit your answers to comments@electoral-vote.com, preferably with subject line "Fight the Power!"