Steve Schwarzman was not accustomed to being on the losing end.
Over the course of the 2020 campaign, the Blackstone chief poured more than $40 million into Republican Party organs and a war chest devoted to Trump’s reelection. He was the single most important donor from the financial services industry.
His money amounted to an investment in the protection of Davos Man’s palace gates—a bolstering of the walls that kept out those seeking to revoke Trump’s tax cuts, close the carried interest loophole, or unleash regulators.
But it turns out that wildly mismanaging a pandemic that had killed more than 230,000 Americans by Election Day is not an especially effective way to secure a second term as president of the United States. November came, Americans went to the polls, and Donald Trump was fired.
He did not go peaceably. Trump claimed that the election had been stolen, despite no supporting evidence. He filed a flurry of frivolous legal challenges, and he bullied Republican officials in battleground states in a failed effort to overturn the results.
Then, on the January day that Congress finally certified the results, Trump incited a mob that stormed the Capitol.
The siege went down as one of the ugliest days in American history. Thousands of people—among them, cops, ex-military, and self-proclaimed white supremacists—violently overpowered a scant police presence, penetrating the chambers of the House and Senate. They vandalized congressional offices and posed for selfies while draped in American flags, exulting in their display of racism, nationalism, and rage.
In encouraging and celebrating this assault, Trump solidified his credentials as a man willing to trash the most basic norms of American democracy to retain power.
That he did not concede the race, enabling a smooth transition to the Biden administration, should not have surprised anyone who had experienced the tumultuous years of his reign. Still, Trump’s behavior was so extreme—egging on a mob seeking to undermine an election—that it yielded a previously unimaginable distinction. He became the first president to be impeached for a second time, a largely symbolic yet legacy-defining act.
The public was so horrified by this brazen attack on democracy that Davos Man was compelled to finally renounce the president who had been so generous to him.
“The peaceful transfer of power is the foundation of our democracy,” said Fink.
“There is no room for violence in our democracy,” tweeted Benioff.
“This is not who we are as a people or a country,” Dimon declared.
Even Schwarzman issued a carefully calibrated condemnation: “The insurrection that followed the President’s remarks today is appalling and an affront to the democratic values we hold dear.”
Note that his words did not blame Trump directly for the violence he encouraged, instead putting the onus on the mob itself. His statement also left unmentioned the people who had for years assisted Trump in gaining and maintaining power—Schwarzman himself, and the other Davos Men suddenly scrambling to disavow a presidency that had played on the worst impulses of white Americans; a presidency they had enabled and exploited as an opportunity for greater enrichment.
In the first days after the election, amid worries about the destabilizing effects of a protracted fight over the result, Schwarzman and more than two dozen other chiefs of major companies had convened on Zoom to discuss the situation. Some expressed alarm that Trump’s attacks on the electoral process could be construed as an attempted coup. But Schwarzman defended Trump’s right1 to challenge the outcome.
Schwarzman then delivered a fresh $15 million in campaign cash to a Republican war chest aligned with Mitch McConnell, ensuring ample funding for a pair of incumbent senators representing the state of Georgia. Their runoff races in January would determine which party controlled the upper chamber of Congress. Both were fierce defenders of Trump. Both had expressed support for blocking the certification of his electoral defeat in Congress—precisely what the mob had shown up to achieve.
Schwarzman had waited until the bitter end to write off his investment in a second Trump term. It was difficult to parse his eleventh-hour alarm over the sanctity of American democracy without noting that Trump was by then a spent force. He had done his part to expand Davos Man’s empire, delivering tax cuts, eviscerating regulations, and opening up vast frontiers to private equity.
Schwarzman and other billionaires had stuck with him, financing his campaign, celebrating his policies, and defending his character—as Trump voiced approval for white supremacists and neo-Nazis, as he separated immigrant parents and children at the border, as my colleagues revealed that he and his family were tax cheats on a scale that could make an Italian magnate blush. The harsh judgment the billionaires trained on him following the Capitol mob came after Trump’s capacity to aid them was gone.
The assault on the citadel of American democracy rendered associations with Trump radioactive, imperiling the profits of anyone viewed as his enabler. Schwarzman—like Fink—was perpetually eager to win the business of the next pension fund, the next burgeoning university endowment. Exposure as a substantial backer of a president who had incited the most malevolent attack on American soil since 9/11 ran the risk that some fund managers might withhold or even withdraw their money from Blackstone’s coffers. Activists were pressuring state pension managers to do just that.
“Why would public employee pension plans continue to invest in Private Equity Corp, like Steve Schwarzman’s Blackstone, who financed, benefitted from & supported Trump & coup plotters?” tweeted a union organizer, Stephen Lerner.
There was another reason that Davos Man swiftly pivoted away from the collaborator in the White House. The billionaires had no obvious reason to fear the incoming president, whose home state of Delaware was famously accommodating to corporate interests.
Biden was literally a likable Joe, a familiar and reassuring presence who possessed voluminous experience, institutional credibility, and a grasp of national and foreign policy issues. He could be relied on to unleash a serious and science-based effort to choke off the pandemic. He would presumably patch up alliances and restore American leadership as an advocate of the liberal democratic order. His presidency represented the return of traditional programming.
Throughout the campaign, restoring normalcy had been Biden’s core promise. He was palatable to moderates—electable, was the word the politicos kept throwing around. He appealed to the sorts of blue-collar communities that had tilted for Trump four years earlier, without alienating the business interests whose contributions were required to finance his campaign.
In claiming the Democratic nomination, he had promised a return to normalcy in overtaking rivals like Bernie Sanders and Elizabeth Warren, whose own candidacies were packaged as attacks on a rigged system, and who defined themselves as enemies of the billionaire class. In Biden’s formulation, Americans did not need a revolution; they needed to get rid of Trump. Seeking the former would jeopardize the latter.
“Corporate America has to change its ways,” Biden had told a gathering of seventeen wealthy donors at a fund-raiser in July 2020. Yet he offered assurances that this would happen gently. “It’s not going to require legislation,”2 Biden continued. “I’m not proposing any. We’ve got to think about how we deal people in.”
The fund-raiser was hosted by Blackstone’s chief operating officer, Jon Gray, whose net worth was estimated at $4.5 billion. His involvement suggested that the firm was hedging its bets. Schwarzman might be writing fat checks for Trump, but other top Blackstone executives were cultivating access to Biden. And Biden was happy to take their money.
The previous month, Blackstone’s executive vice chairman, Tony James, had hosted another Biden fund-raiser, convening thirty ultrawealthy donors.
In reassuring contributors that they need not fear legal changes on his watch, Biden might just as well have been endorsing stakeholder capitalism. The good people running private equity companies and other investment firms, who collectively dropped $3.5 million into his campaign war chest, could be counted on to share the wealth more equitably, without radical intrusions like lawmaking.
As the longtime Democratic operative Hilary Rosen put it, Biden was “not somebody who is coming in to disrupt Washington3. He’s coming in to heal Washington.”
But normalcy raised the prospect of repeating the cycle of disappointment and grief that had allowed Trump to take power, launching his insurgency against democracy. The norm over the last four decades was Davos Man using his money to purchase influence over the political sphere, crafting rules that allowed billionaires to keep more of their earnings. It was private equity kings like Schwarzman stripping the health care system, and Amazon applying its market power to squash competitors while exploiting workers.
What had long been the norm in American life had generated a furious backlash that had allowed a patently unqualified, would-be authoritarian to become president on the strength of a promise to destroy normalcy. The full danger of that choice had been revealed by the resulting dysfunction in American governance, which had left the richest country on earth impotent in the face of a pandemic. Now, Trump’s replacement was promising to go back to normal.
This was more than a rhetorical concern. That the Oval Office would no longer serve as a venue for saluting avowed racist militants was a welcome development. That the president would not openly celebrate dictators, influence foreign policy for personal political gain, or intentionally stir up hate all constituted meaningful alterations to what had become regular fare during the Trump presidency. Still, normalcy set a low standard for change in terms of transcending the conditions that had nurtured Trumpism—that would, if left unchanged, produce further grievance that could be exploited by another opportunistic politician offering tribalism as the response to real problems.
The inequalities that defined the American economy—the legalized tax evasion, the structural racism, the erosion of labor power, and the growing impossibility of paying bills on typical wages—were realities that had long predated Trump. They would not be fixed by his removal from the White House. The movement that had propelled him to power was the continuation of forces that had been operative in the American sphere for decades.
Reagan had begun the push to dismantle government and distribute the savings via tax cuts, turning trickle-down into the central principle of economic policy. Successive administrations representing both parties had denigrated social welfare spending and catered to the shareholder class while tolerating inequality as the by-product of prosperity. Clinton had celebrated the restorative powers of cutting budget deficits, while affirming the logic that innovation required unlimited rewards. He and Obama had centered their economic designs on finance and technology, allowing Davos Man to add zeros to his net worth. They had relegated antitrust law to the history books. George W. Bush had sacrificed government on the altar of the tax-cutting gods, further gutting social programs.
Davos Man had not been some accidental beneficiary of this ideological shift. He was its driver, financing campaigns, deploying lobbyists and lawyers who promoted the Cosmic Lie, while demonstrating his supposed benevolence via philanthropy and pledges for stakeholder capitalism.
Trump had simply gone further than his predecessors, distributing an even larger bonanza of tax cuts that favored the billionaire class, while placing the state itself in the control of corporate interests.
The official word that Trump had been defeated provoked spontaneous dance parties in the streets of major American cities. But if Trump’s eviction from the White House was something to celebrate, it also felt like the end in itself, and not the beginning of a fundamental refashioning. In words and deeds, Biden signaled that he was no threat to Davos Man and his dominant hold on American governance.
As he filled out his administration, Biden’s selections indicated that he would seek to finesse his way through, embracing muscular stimulus for regular people, raising revenues through some additional taxes on the wealthy, but generally avoiding hard feelings with Davos Man.
Mnuchin was replaced by Janet Yellen, a respected economist who had previously headed the Fed. She brought greater concern for working people, but her financial disclosure statements also revealed affinity for Davos Man. Over the previous two years, Yellen had harvested more than $7 million in fees for speeches to corporate giants, among them Goldman Sachs, Salesforce, and Citadel, a hedge fund launched by a major Republican donor, Ken Griffin.
Yellen’s deputy would be Adewale Adeyemo, who had been Fink’s interim chief of staff at BlackRock.
As his secretary of health and human services, Biden selected California’s attorney general Xavier Becerra, who had pressed the federal government to employ its monopoly-busting authority to override drug patents, lowering the cost of medicines. But one of Biden’s closest advisers, Steve Ricchetti, previously worked as a lobbyist for major pharmaceutical companies. His brother, Jeff Ricchetti, had recently been hired by Amazon to lobby on issues connected to the pandemic, including the CARES Act4.
A diverse team of economists set up shop at the White House, led by Cecilia Rouse, a respected labor economist who became the first Black person to chair the president’s Council of Economic Advisers. But Biden’s primary economic counselor was another BlackRock alumnus, Brian Deese. He had overseen sustainable investment strategies for Fink, making him an architect of policies that created the appearance of meaningful change while perpetuating the status quo.
In another blow to Schwarzman, the two Republican incumbent senators from Georgia were defeated, supplying Democrats a slender but crucial majority in the chamber. That gave Biden power to turn his policy proposals into law. But Davos Man’s enduring influence in the political process would constrain his actions.
Even before he was inaugurated, Biden proposed a fresh $1.9 trillion in pandemic relief spending, including expanded unemployment benefits, support for beleaguered state and local governments, and cash for middle-class and low-income households. This constituted a substantial corrective to the previous rescue packages, which had concentrated on lifting asset prices.
But a rebellion from Democratic centrists prevented a key element that Biden had aimed to attach to the bill—a lifting of the federal minimum wage to $15. The minimum wage had not been increased in a dozen years. Over decades, Congress had allowed it to be steadily eroded by inflation in response to lobbying from corporate representatives like the Business Roundtable. A higher minimum wage would destroy jobs, the lobbyists warned, though the economic literature said otherwise: put more money in the pockets of workers and they would spend it, creating jobs for other people.
After accounting for inflation, the minimum wage was more than one-fourth lower5 than back in 1968. Though a variety of polls showed that most Americans favored lifting the minimum wage, including a majority of Republicans, Biden’s proposal went down. His tenure would clearly be defined by compromise.
Whoever was in the White House, Davos Man retained his perch.
Biden’s ascension and his party’s control over both chambers of Congress has altered the thrust of the American handling of the pandemic and its attendant economic catastrophe. Biden has clearly been changed by the circumstances in which he assumed the presidency. He has championed a massive spending plan aimed at bolstering the nation’s infrastructure and another measure that seeks to dramatically reduce poverty through the expansion of child tax credits. Instead of charting a path back to normalcy, Biden has provoked exaggerated comparisons to no less than Franklin Delano Roosevelt and his New Deal, the social safety programs inspired by the Great Depression. Biden has sought to finance his revival of muscular government by increasing corporate taxes, and by partially closing off the carried interest loophole that has long allowed private equity magnates like Schwarzman to shield their income from taxation.
In rhetoric and action, Biden speaks to those nursing a sense that American democracy has been hijacked by monied interests. But whether he would meaningfully diminish economic inequality—whether he has the stomach to upset corporate donors and the fortitude to overcome entrenched opposition—remain open questions.
If he fails to follow through, the consequences could be potentially profound. The Biden years might raise expectations for fair redress before giving way to familiar disappointment, as wages stagnate while the billionaires add to their winnings. That could wind up fertilizing the ground for an updated, more sophisticated version of Trump—someone who would pursue the traditional Republican goals of deregulation, tax cutting, and the dismantling of government while packaging this as a spur to growth; someone who would speak empathetically to the working class while serving the needs of the plutocrats; someone who would indulge the language of compassion, while solidifying the prerogatives of the privileged people who financed campaigns.
Trump is gone, but Trumpism might yet have a bright future.
Beyond the United States, entrenched political realities constrain prospects for change as countries sift through the wreckage of the pandemic.
In Britain, the arrival of an especially contagious virus variant in early 2021 again threatened to overwhelm the beleaguered national health care system, prompting the government to impose another shutdown that sent the economy back into recession. The downturn was exacerbated by Britain finally leaving the E.U., with a modest trade deal that forced exporters on both sides of the English Channel to navigate revived customs procedures. The resulting chaos at ports was at once predictable and debilitating.
Across Europe, leaders bickered over how to distribute the proceeds of the continent-wide bonds while the pandemic went on, unchecked by an initially slow vaccination drive.
The global economy appears certain to emerge from the pandemic in a more unequal state.
Here is the central problem as the world contemplates life after a public health disaster made more lethal by the predation of Davos Man: how can democratic societies attack inequality when democracy itself is under the control of the people who possess most of the money?
Absent a sudden urge on the part of billionaires to voluntarily participate in the equitable redistribution of wealth, how can communities take on entrenched economic injustice? How can they promote the sort of economic growth that holds the potential to broadly improve living standards?
These are enormous questions with no obvious answers. But solutions have to be explored. The alternative is to accept the continued degradation of democracy.
Having explored Davos Man’s lair, let us now return to the rest of the human habitat.
Some communities have been experimenting with ways to expand wealth for ordinary people, reorienting public spending, and testing new forms of social insurance. These are not idealistic fantasies, but pragmatic designs on reclaiming what the world has already known—a form of capitalism that harnesses the virtues of the market system while equitably sharing the gains.
In the north of England, in a city called Preston, local leaders forged a pathway to progress that ignored Davos Man altogether.