Democracy in an Age of Powermaxxing

The billionaire backlash has finally arrived. But is it too late?

Suddenly it’s OK to sound the alarm about the political power of billionaires. And I do mean suddenly. The chart above, from political scientist Andrew Hall, examines fundraising emails to track the extent to which politicians say negative things about the hyper-wealthy. Not surprisingly, almost all mentions are negative. Until 2025 there were remarkably few such mentions – that is, until the cavalcade of fawning tech bros at the Trump inauguration abruptly made criticism of billionaires and their influence mainstream.

Hall calls this “billionaire bashing.” Tyler Cowen calls it “billionaire derangement syndrome,” as if it were unreasonable to worry about the political power of a handful of incredibly wealthy men who are bestowing tens of millions in favors to the Trump administration and the Trump family, as well as spending vast sums to influence elections and Supreme Court nominations. The real puzzle is why it didn’t happen sooner.

You don’t need statistics to realize that there has been an explosion of wealth at the very top of the scale. From their titanic yachts to their life extension treatments, the hyper-wealthy are flaunting their billions almost everywhere one looks. For example, a few days ago the Wall Street Journal published a report on a new trend: “landmaxxing,” as in, the hyper-wealthy are increasingly buying giant estates:

And the statistics bear out the impressionistic evidence: there has been an explosion of wealth at the very top. In last Sunday’s primer I noted that in 1982, the first year Forbes compiled its list of the 400 richest Americans, the combined wealth of the 400 was only $92 billion. In 2025 it was $6.6 trillion. Even adjusting for inflation, the growth of wealth at the top has dwarfed gains in income and wealth for the average American:

So why should the rest of us care about how the other 0.0002% live? One important reason is that wealth at the top is, to a significant extent, coming at the expense of American workers. As a recent report from the New York Fed documents, the share of national income going to workers is at an 80-year low:

Source: Liberty Street Economics

A second, even more important reason is the fact that the hyper-wealthy aren’t just landmaxxing -- they’re powermaxxing.They are seriously undermining American democracy as well as lowering the living standards of ordinary Americans.

The Journal article about mega-estates name-checked Larry Ellison, who is America’s 2^nd richest man, and Ken Griffin, who is only the 21^st richest, with a mere $50 billion in net worth. In addition to buying huge compounds, both men are very much buying political influence. Ellison’s family has taken control of CBS, which it is rapidly corrupting into a right-wing mouthpiece, and is trying to take over CNN too. And the day after the report on landmaxxing, the Journal published this:

Again, statistical data bear out the impressionistic evidence. As recently as the 2000s, the hyper-wealthy played little direct role in campaign finance, although influence campaigns by the likes of the Koch brothers and Richard Mellon Scaife were already having a major effect on the politics of taxation, climate and more. Since then the combination of soaring billionaire wealth and the Citizens United decision by the Roberts Supreme Court — a court whose Trump-enabling, anti-democratic slant was itself largely engineered by the Kochs — have opened the floodgates. Billionaires accounted for almost 20 percent of campaign spending in 2024, and that surely understates their influence:

Massive political spending has given billionaires massive political power. True, some of what the Trump administration does reflects Trump’s personal whims, obsessions and vanity — which is why the Iran debacle happened and is turning into a quagmire. But a large part of federal policy now is government of the billionaires, by the billionaires, for the billionaires.

What do billionaires want and get? Money isn’t their only object. Some of them genuinely believe in causes beyond their own further enrichment. Unfortunately, these causes are on average loathsome. Elon Musk, to take the most prominent example, appears to be personally committed to white supremacy and right-wing extremism. Peter Thiel, who bought JD Vance his Ohio Senate seat, appears to be genuinely crazy: he’s called for a return to monarchy and is now ranting about the antichrist. As Henry Farrell argues, we shouldn’t be talking about billionaire derangement syndrome, we should be talking about deranged billionaire syndrome.

Obligatory disclaimer: not all billionaires are deranged, and some are public-spirited figures who try to use their wealth and power to help others. However, the Citizens United decision, along with the Trump administration’s raw corruption, opened the door for the all too numerous predatory billionaires to acquire more political power in order to further rig a system that is already greatly tilted in their favor. Want to pollute air and water? Want your anti-competitive merger approved? Want a big tax cut that benefits the billionaire class while stripping ordering people of their healthcare? Want to eliminate financial regulation so that you can play games with and siphon off other people’s money? No problem on all those counts.

Above all, the billionaires want low taxes for themselves. A recent paper by Balkir et al estimates that because we tax income from wealth at much lower rates than income from wages, the wealthiest 400 people in American pay an average tax rate of 24%, compared with 30% for the population at large and 45% for high-income Americans who derive their income from earnings rather than ownership of assets.

As I noted Sunday, low taxes on the hyper-wealthy feed a downward spiral of oligarchy in which low taxes make it easier for huge fortunes to grow even larger, and in which the power of vast wealth keeps increasing, leading to even more favorable policies for the few.

This downward spiral has been taking place for decades. As I said, the real question about the backlash against billionaires is why it didn’t happen sooner.

And rather than belittling anti-billionaire sentiment and suggesting that it’s excessive, we should be asking whether it’s remotely enough. Democracy is on the cliff-edge. Can we pull out of the oligarchic spiral soon enough to save it?

MUSICAL CODA