The traditions that bind us

By Bill Schmick

For Capital Region Independent Media

Recently, billionaire Stephen Feinberg of the private equity firm Cerberus Capital Management was selected to fill the number two spot at the Defense Department. That brings the number of billionaires who have agreed to join Donald Trump’s second term to an even dozen. Should you be worried?

The wealth and business background of these individuals have sparked concerns that the next four years will favor business interests and those of the wealthy above all else. If we include Trump, Elon Musk and Vivek Ramaswamy, the total thus far would be 15. At last count, U.S. News and World Report estimated that the total net worth of these billionaires as of Dec. 10, was more than $382 billion. That would be equivalent to the Gross Domestic Product of 172 different countries.

The departments of Treasury, Commerce, Education, Interior and Defense will be run by these wealthy individuals, as will the Small Business Administration and NASA. In the $100 million to mega billion-dollar net-worth range, are another group of ambassadors, advisors, the energy secretary, and the head of the Social Security Commission.

The facts are that American politicians have always been wealthier than most Americans. That is true in other countries as well. For wealthy individuals serving one’s country may truly be altruistic since government jobs are thankless and underpaid for the work required. Service is also a massive step down from what these people can and do make in the private sector. However, it is also true that wealthy lawmakers usually favor pro-business policies.

In the recent election, 150 billionaire families spent a total of $1.9 billion supporting both presidential and congressional candidates, according to a study by Americans for Tax Fairness.  That was a 58% increase over what was spent in 2020. The lion’s share of that money went to the Trump campaign ($568 million), compared to $127 million to Kamala Harris.

Those figures underestimate the real totals since many donors conceal their identity when funding political causes. Elon Musk alone is thought to have contributed as much as $277 million to the Trump effort in 2024.

Some critics believe that the entire trend in political spending by the 1% is an effort to shape the terms and future of American democracy in their favor. They point to Trump’s running mate, Senator and now Vice President JD Vance, a protégé of billionaire Peter Thiel, as an example.

The recent controversy over Elon Musk, the head of the newly created Department of Government Efficiency (DOGE), is a case in point. Musk, who holds no elected office, mounted an 11th-hour protest over the bipartisan congressional deal designed to fund the government for a few more months.

What had begun as a clean and simple piece of legislation two weeks ago became a free-for-all by legislators on both sides to attach additional spending for pet projects. Musk pointed that out on social media and demanded the agreement be revised.

The political blowback from House members was immediate. Both Republicans and Democrats called press conferences. Some (mostly Democrats) accused “President Musk” of sticking his nose where it doesn’t belong. The criticism continued, despite Trump’s backing of Musk’s arguments. How dare a civilian interfere with the work of elected officials! 

In any case, a compromise was put together quickly and the legislation passed, but much of the pork in the bill was dropped. The politicians claimed victory. Musk and Trump lost, according to the media, but I have a different take. It seems to me that we, the people, won. Why?

We all know that this kind of wasteful spending happens all the time in Washington. It is hidden from the public and usually attached (and buried) in a bill of something important that both sides can defend, such as disaster relief. Over time, this or that boondoggle or “bridge to nowhere” is revealed, and we shake our heads over the duplicity of it all. “Something must be done,” we mutter in outrage, but nothing ever is. We shrug our shoulders and over time go on about our business.

The politicians are counting on this. And yet, over the last few decades, we have become increasingly less happy than angry, until today the entire political system is in doubt.

The difference this time was that one of these billionaires not only blew the whistle on the practice but had at his fingertips a vast avenue of communication called X to announce it to the world. Was it unorthodox? Absolutely.  It may take similar actions and/or out-of-the-box thinking to change a fossilized system where we all talk about a good show but take no action.

I would counsel readers to avoid jumping to conclusions because many of these appointees are wealthy and not from “acceptable” backgrounds in government. That does not mean I approve of all the former president’s appointees, no matter how much money they may have. Far from it. Nor did I approve of all of Biden’s appointments.

But nothing says that a team of billionaires will automatically promote a business-as-usual attitude toward the problems facing this country. President Franklin D. Roosevelt was a man from a wealthy family. He gave us the New Deal, shepherded us through the Great Depression, and led our country to victory through World War II.

To many, Michael Bloomberg, another billionaire Wall Streeter, did the impossible. He changed the face of New York City, straightened out its finances, and served three terms as mayor. Yes, some said he was arrogant and insensitive to the poor but there has never been a mayor like him to this day.

Many argue that these rich people lack experience in government service. That may be a good thing. They will make plenty of mistakes, but billionaires learn fast. In comparison, those public/private/ lobbyists/politicians who have spent their careers moving in and out of government service are the people who have brought the country to where it is today. These politicians often seem to have only one remedy for what ails us as a nation—more of the same.

We face a crisis today and it doesn’t take a rocket scientist to figure that out. Voters in this populist era are angry. They are demanding major changes in both our political and economic systems. A return to a time when robber barons exploited the government for their ends will last as long as an ice cream cone in July. The rank and file of Americans will not take kindly to getting shafted once again.

Remember that most of those billionaires boot-strapped their way to where and what they are today. They know what it takes to succeed in the private sector. Can they apply their tools to the public sector? That remains to be seen, but I will at least give them the benefit of the doubt.

Bill Schmick is a founding partner of Onota Partners, Inc., in the Berkshires. Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners, Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at billiams1948@gmail.com. Investments in securities are not insured, protected or guaranteed and may result in loss of income and/or principal.