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Robert Reich: Why Are the Wealthy Pouring So Much of Their Wealth into Politics?
Link: https://robertreich.substack.com/p/why-are-the-wealthy-pouring-so-much
Last week, I testified at a congressional hearing organized by Rhode Island Senator Sheldon Whitehouse and New Mexico Senator Martin Heinrich about what Big Oil has gotten from its mammoth contribution to Trump’s 2024 campaign — and how much Americans are paying for this bribe in higher fuel costs and destructive climate change.
The short answer: It’s the most corrupt deal in American history.
But it’s hardly the only corrupt deal in Washington. Political corruption is growing dramatically — partly because Trump is the most corrupt president in American history. But also because America’s wealthy and their corporations have been pouring more and more money into politics because the return on this “investment” has become so large.
I have some good news to share with you about all this. But first I want to sketch the core problem, 1-2-3. Then I’ll suggest a solution, 4.
1. The richest 0.1 percent have become fabulously wealthy
Take a look at the graph just below, which shows the richest 0.1 percent of Americans — households with a net worth over $45 million as of 2025 — pulling away from the rest of us at a rapid clip.
As you see, from 1990 to around 2003, the wealth of most Americans grew at about the same pace. The gap started to widen around 2003, when Wall Street went on a gambling spree, creating a financial bubble. When the bubble burst in 2008, the top 0.1 percent took a big hit.
But since 2008, the wealth of the top 0.1 percent has really taken off. And after 2018, it exploded — mainly due to the combined effects of the 2017 Trump tax cut, the COVID-19 recession (when the ultra-wealthy used low interest rates to buy real estate and stocks), and the subsequent stock-market surge.
Nearly 72 percent of the wealth of the richest 0.1 percent is made up of corporate equities, mutual fund shares, and private businesses, according to the Fed. The S&P 500 has more than tripled in the past decade.
- more at link -
The short answer: It’s the most corrupt deal in American history.
But it’s hardly the only corrupt deal in Washington. Political corruption is growing dramatically — partly because Trump is the most corrupt president in American history. But also because America’s wealthy and their corporations have been pouring more and more money into politics because the return on this “investment” has become so large.
I have some good news to share with you about all this. But first I want to sketch the core problem, 1-2-3. Then I’ll suggest a solution, 4.
1. The richest 0.1 percent have become fabulously wealthy
Take a look at the graph just below, which shows the richest 0.1 percent of Americans — households with a net worth over $45 million as of 2025 — pulling away from the rest of us at a rapid clip.
As you see, from 1990 to around 2003, the wealth of most Americans grew at about the same pace. The gap started to widen around 2003, when Wall Street went on a gambling spree, creating a financial bubble. When the bubble burst in 2008, the top 0.1 percent took a big hit.
But since 2008, the wealth of the top 0.1 percent has really taken off. And after 2018, it exploded — mainly due to the combined effects of the 2017 Trump tax cut, the COVID-19 recession (when the ultra-wealthy used low interest rates to buy real estate and stocks), and the subsequent stock-market surge.
Nearly 72 percent of the wealth of the richest 0.1 percent is made up of corporate equities, mutual fund shares, and private businesses, according to the Fed. The S&P 500 has more than tripled in the past decade.
Recommended reading! According to Robert Reich, the key to beating this is striking down Citizens United. And he makes some very good points in that regard.
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