Among the losers in the United States this week are the super rich, who spent unprecedented millions to evict President Barack Obama from the White House. The investing class turned sharply and vociferously against the Democratic candidate many of them had supported in 2008. On Tuesday night, the plutocrats lost their shirts.
“Boy, they threw away a lot of money,” Theda Skocpol, a Harvard University professor of government and sociology, told me. “It was very interesting to hear on Tuesday night about all the corporate jets packed in Logan Airport” for Republican candidate Mitt Romney’s party in Boston.
One of the important questions in the U.S. today – and, eventually, in all democracies where income inequality has risen sharply – is what impact the political ineffectiveness of the super rich at the ballot box will have on how the country is actually governed.
According to Dr. Skocpol, the answer will be determined partly by how Mr. Obama’s second-term victory is explained. “There will be an attempt to downplay the role economic populism played,” she said. “I would expect a lot of the Wall Street Democratic crowd to place the emphasis on social issues and immigration.There will be an effort to define it that way.”
So one explanation of his victory will be that it was about demographics trumping economic policy. Whether that view becomes dominant matters because it will shape what sort of a governing mandate Mr. Obama is deemed to have won.
“He clearly got a mandate for using the government to build an opportunity for the middle class,” Dr. Skocpol said. “He has a mandate for higher taxes on the wealthy. He has a mandate for Obamacare [health care] going forward. I think voters understand that these differences were clear.”
Historian David Nasaw agrees. “The black and Latino voters did not vote for Obama simply because he had a black skin. They voted for him because they thought his policies made more sense,” he said.
“This is no longer a nation where white middle-class suburbanites control the destiny of the country,” Dr. Nasaw continued. “Black voters, Latino voters, young voters aren’t going away, and they are going to vote their self-interest. Their self-interest is with a larger government and with a government that recognizes that there has been, over the past couple of decades, a power grab by the wealthy, by corporate interests, by financial interests.”
When it comes to policy, Mr. Obama wasn’t a particularly bad leader for the most affluent Americans, particularly those in the financial sector; incomes at the very highest levels have recovered much more swiftly from the financial crisis than those of the middle class, and the Troubled Asset Relief Program was essential for Wall Street.
But Mr. Obama was a severe disappointmen t when it came to the softer side of serving the wealthy supporters who backed him in 2008. The handwritten letters, White House photos and private policy discussions that are the accustomed quid pro quo for major donors did not happen. The result was a business community that nursed something much more painful than a mere substantive disagreement with Mr. Obama: Its leaders felt personally disrespected.
“The President really chafed at the idea that he needed to kiss the ring of Wall Street,” said Jacob Hacker, a Yale University political science professor and leading thinker about the role of money in U.S. politics. “He rightly resisted the calls to do that, and I think the result will embolden the President a bit.”
Dr. Hacker believes money continues to play a huge role in U.S. politics, particularly through lobbying around specific issues, and in races that have less national visibility, such as congressional contests. But over all, he sees in Tuesday’s election results a vindication of the power of mass democracy.
“It means that your votes matter,” he said. “If you can mobilize your voters, that is a pretty strong antidote to the role of money in politics.”
The good news for Wall Street, for the 1 per cent, and for the United States as a whole, is that pretty much everyone expects Mr. Obama to be magnanimous in victory.
“Obama is not going to turn into some Bolshevik,” Dr. Skocpol said. “He is going to try to work with the business community, as he always has. He is not going to be insulting them now; he’s going to be inviting them to dinner.”