The potential of great wealth in the hands of a relative few to undermine democratic institutions was a continuing concern in the nineteenth century as railroad, oil and financial magnates accumulated power. "Wealth, like suffrage, must be considerably distributed, to support a democratick republic," wrote Virginia Congressman John Taylor as early as 1814, "and hence, whatever draws a considerable proportion of either into a few hands, will destroy it. As power follows wealth, the majority must have wealth or lose power." Decades later, progressives like Louis Brandeis saw the choice starkly: "We may have democracy, or we may have wealth concentrated in the hands of a few, but we can't have both."
The reforms of the Progressive Era at the turn of the twentieth century saved American democracy from the robber barons, but the political power of great wealth has now resurfaced with a vengeance. And here again, Romney is the poster boy. Congress has so far failed to close the absurd carried-interest tax loophole, for example, because of generous donations by Bain Capital and other private-equity partners to both parties.
III
In the 2012 election, Romney wants everything Wall Street has to
offer, and Wall Street seems quite happy to give it to him. Not only is
he promising lower taxes in return for its money; he also vows that, if
elected, he'll repeal what's left of the Dodd-Frank financial reform
bill, Washington's frail attempt to prevent the Street from repeating
its 2008 pump-and-dump. Unlike previous elections, in which the Street
hedged its bets by donating to both parties, it's now putting most of
its money behind Romney. And courtesy of a Supreme Court majority that
seems intent on magnifying the political power of today's robber barons,
that's a lot of dough. As of May, 31 billionaires had
contributed between $50,000 and $2 million each to Romney's super-PAC,
and in June another -- appropriately enough, a casino magnate -- gave $10
million, with a promise of $90 million more. Among those who have
contributed at least $1 million are former associates from Romney's days
at Bain Capital and prominent hedge-fund managers.
To be sure, Romney is no worse than any other casino capitalist of this new Gilded Age. All have been making big bets -- collecting large sums when they pay off and imposing the risks and costs on the rest of us when they don't. Many have justified their growing wealth, along with the growing impoverishment of much of the rest of the nation, with beliefs strikingly similar to social Darwinism. And a significant number have transformed their winnings into the clout needed to protect the unrestrained betting and tax preferences that have fueled their fortunes, and to lower their tax rates even further. Wall Street has already all but eviscerated the Dodd-Frank Act, and it has even turned the so-called Volcker Rule -- a watered-down version of the old Glass-Steagall Act, which established a firewall between commercial and investment banking--into a Swiss cheese of loopholes and exemptions.
But Romney is the only casino capitalist who is running for president, at the very time in our nation's history when these views and practices are a clear and present danger to the well-being of the rest of us -- just as they were more than a century ago. Romney says he's a job-creating businessman, but in truth he's just another financial dealmaker in the age of the financial deal, a fat cat in an era of excessively corpulent felines, a plutocrat in this new epoch of plutocrats. That the GOP has made him its standard-bearer at this point in American history is astonishing.
So why don't Democrats connect these dots? It's not as if Americans harbor great admiration for financial dealmakers. According to the newly released 25th annual Pew Research Center poll on core values, nearly three-quarters of Americans believe "Wall Street only cares about making money for itself." That's not surprising, given that many are still bearing the scars of 2008. Nor are they pleased with the concentration of income and wealth at the top. Polls show a majority of Americans want taxes raised on the very rich, and a majority are opposed to the bailouts, subsidies and special tax breaks with which the wealthy have padded their nests.
Part of the answer, surely, is that elected Democrats are still almost as beholden to the wealthy for campaign funds as the Republicans, and don't want to bite the hand that feeds them. Wall Street can give most of its largesse to Romney this year and still have enough left over to tame many influential Democrats (look at the outcry from some of them when the White House took on Bain Capital).
But I suspect a deeper reason for their reticence is that if they connect the dots and reveal Romney for what he is -- the epitome of what's fundamentally wrong with our economy -- they'll be admitting how serious our economic problems really are. They would have to acknowledge that the economic catastrophe that continues to cause us so much suffering is, at its root, a product of the gross inequality of income, wealth and political power in America's new Gilded Age, as well as the perverse incentives of casino capitalism.
Yet this admission would require that they propose ways of reversing these trends -- proposals large and bold enough to do the job. Time will tell whether today's Democratic Party and this White House have the courage and imagination to do it. If they do not, that in itself poses almost as great a challenge to the future of the nation as does Mitt Romney and all he represents.
(I wrote this for this week's "The Nation" Magazine.)
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