There are a lot of billionaires in Trump's coming administration

Summary

Summary of "There Are a Lot of Billionaires in Trump's Coming Administration"

Podcast: The Indicator from Planet Money
Host: NPR
Release Date: December 16, 2024

Introduction

In the December 16, 2024 episode of The Indicator from Planet Money, NPR delves into the significant presence of billionaires within President-Elect Donald Trump's incoming administration. The episode, titled "There Are a Lot of Billionaires in Trump's Coming Administration," explores the implications of having an unprecedented number of ultra-wealthy individuals occupying key government positions. Hosts Adrienne Ma and Waylon Wong engage with political science experts to unpack the potential impacts on governance, policy-making, and democratic representation.

High Concentration of Billionaires in the Administration

The episode opens with Steve Nelson, an NPR contributor, highlighting the exceptional number of billionaires slated to join Trump's cabinet and staff. Nelson states:

"The way things are going, it's looking likely that President Elect Trump's incoming cabinet and staff will quite literally be run by billionaires. Okay, not only billionaires, but way more billionaires than your typical presidential administration."
[00:11]

Waylon Wong adds to the list of notable billionaire nominees:

"Hedge fund CEO Scott Besant for Treasury. Secretary Howard Lutnick, CEO of a financial services firm for Commerce Secretary Linda McMahon. Former CEO of World Wrestling Entertainment for Education Secretary. And then there's Vivek Ramaswamy, a pharmaceutical billionaire who's been tapped to co-lead the so-called Department of Government Efficiency along with, of course, the world's richest man, the billionaire of billionaires, Elon Musk."
[00:26 - 00:57]

Nelson further emphasizes the sheer scale of their combined wealth:

"Estimates are that the total combined wealth of Trump's picks for his cabinet and administration would be upwards of $300 billion."
[01:04]

Overrepresentation of Billionaires in Politics

Steve Nelson introduces Darian Stacey, a political science professor at the U.S. Naval Academy, who provides insights into the phenomenon:

"We used the Forbes list, which had just over 2,000 billionaires from around the world. And so what we ended up doing is looking for evidence that they had formally entered politics. And we found that 11% of the people on the list had entered politics..."
[03:09 - 03:21]

Nelson highlights the surprising overrepresentation:

"The 11% of billionaires getting into politics or government was way higher than it was for other groups we often think of as producing a lot of politicians. For example, Steve says less than 1% of lawyers in the US go into politics."
[03:52 - 04:09]

Motivations Behind Billionaires Entering Politics

Darian Stacey discusses why billionaires might choose to run for office despite their substantial wealth:

"It does seem odd to me because super-rich people can use other means to try to get what they want in the political realms... They can just give a bunch of money to a candidate and basically try to steer the policy agenda in that way. So why is it that these billionaires are entering politics at such a high rate?"
[04:23 - 05:05]

Stacey suggests that billionaires are often motivated by the desire to protect and expand their wealth, especially in environments with weak rule of law:

"In authoritarian regimes, billionaire politicians are motivated to absorb the costs of entering politics because the benefits are really high. The incentives are really strong because what they really worry about is protecting their wealth."
[05:05 - 06:01]

Comparative Analysis with Authoritarian Regimes

The discussion draws parallels between the influx of billionaires in Trump's administration and similar trends in authoritarian countries like China and Russia:

"China and Russia alone account for about half of the world's billionaire politicians... The best way to do that for many billionaires is to say, I'm going to set aside some of my time and serve in the legislature or serve in a political post to make contacts, ensure that I am showing that I am loyal to the regime, and that way I can try to protect my wealth."
[05:12 - 06:01]

Implications for Governance and Policy

Steve Nelson and Darian Stacey explore both potential benefits and drawbacks of having billionaires in government roles:

Positive Aspects:

• Leadership Skills: Wealthy individuals might bring strategic thinking, risk-taking, and decision-making skills honed in the business world.

  "Some of these individuals might bring fresh ideas and a mindset that prioritizes results, which can often be a positive change in government."
  [06:23 - 07:16]

• Access to Resources: Their extensive networks and resources can aid in effective policy development and implementation.

Negative Aspects:

• Disconnection from Average Citizens: Extreme wealth can create a gap between government officials and the general populace, potentially leading to policies that do not address wider societal issues like inequality and poverty.

  "Studies... suggest that leaders from wealthier backgrounds are less likely to prioritize policies addressing things like inequality, poverty, and social safety nets."
  [07:16 - 07:55]

• Conflicts of Interest: There is a heightened risk that billionaire politicians might use their positions to benefit their own financial interests, much like allegations faced by Trump during his first administration.

  "The concern is these billionaire politicians could use their power and influence to benefit their own bottom lines."
  [07:55 - 08:22]

Wealth and Political Alignment

Nelson and Stacey discuss the tendency of the super-rich to affiliate with conservative parties, both in the U.S. and globally:

"The super rich are much more likely to affiliate with a conservative party... there's two and a half times more Republican billionaire politicians in the United States."
[08:22 - 08:34]

This alignment influences the policy directions and priorities of administrations heavily staffed by billionaires.

Democracy and Representation

A central concern raised in the episode pertains to the core principles of democracy:

"If democracy is about average people picking leaders to represent the people's interest, will a government staffed by millionaires and billionaires be able to do that?"

[09:01 - 09:22]

Darian Stacey underscores the dilemma:

"The problem with having a huge number of super wealthy people or a high share of super wealthy people occupying government positions is it creates a dilemma for democracy."

[09:01 - 09:22]

Conclusion

The episode concludes by highlighting the unprecedented concentration of wealth within Trump's incoming administration and its broader implications for American democracy. While the presence of billionaires might introduce certain efficiencies and innovative approaches to governance, it also raises significant concerns about representation, policy bias, and potential conflicts of interest. The episode calls into question whether such a concentration of wealth in government aligns with the democratic ideal of leaders representing the interests of the average citizen.

Produced by: Corey Bridges
Engineered by: Jimmy Keighley
Fact-Checked by: Sierra Juarez; Cake and Cannon
Edited by: [Unnamed Editor]
Production: The Indicator is a production of NPR.

Transcript

[NPR Host]

Npr.

[Steve Nelson]

The way things are going, it's looking likely that President Elect Trump's incoming cabinet and staff will quite literally be run by billionaires. Okay, not only billionaires, but way more billionaires than your typical presidential administration.

[Waylon Wong]

We don't have time to go through all of Trump's nominees, but here's some of those reported billionaires. Hedge fund CEO Scott Besant for Treasury.

[Steve Nelson]

Secretary Howard Lutnick, CEO of a financial services firm for Commerce Secretary Linda McMahon.

[Waylon Wong]

Former CEO of World Wrestling Entertainment for Education Secretary.

[Steve Nelson]

And then there's Vivek Ramaswamy, a pharmaceutical billionaire who's been tapped to co lead the so called Department of Government Efficiency along of course with the world's richest man, the billionaire of billionaires, Elon Musk.

[Waylon Wong]

Again, this is just a partial list of Trump's billionaire nominees and appointments and we haven't even gotten to the millionaires.

[Steve Nelson]

Now estimates are that the total combined wealth of Trump's picks for his cabinet and administration would be upwards of $300 billion. And granted, the rich and well connected have always had a leg up in politics and government. But if Trump's picks are confirmed, the amount of personal wealth held by top government officials would be unprecedented. This is the indicator from Planet Money. I'm Adrienne Ma.

[Waylon Wong]

And I'm Waylon Wong. Today on the show, what does this influx of the uber wealthy into high office mean for the country?

[NPR Host]

This message comes from Apple Card. Apple Card is the perfect card for your holiday shopping. You can apply on your iPhone in minutes and start using it right away. You'll earn up to 3% daily cash back on every purchase, including products at Apple like a new iPhone 16 or Apple Watch Ultra. Start holiday shopping for your friends and family today with Apple Card subject to credit approval. Apple Card issued by Goldman Sachs Bank USA Salt Lake City Branch terms and.

[NPR Sponsor]

More@Apple card.com this message comes from NPR sponsor E Trade from Morgan Stanley. Take control of your financial future with E Trade. No matter what kind of investor you are, their tools and resources can help you be ready for what's next. Now when you open an account, you can get up to $1,000 with a qualifying deposit. Terms apply. Learn more at eTrade.com NPR Investing involves risks Morgan Stanley Smith Barney LLC member Cipic E Trade is a business of Morgan Stanley.

[NPR Host]

This message comes from the John D. And Catherine T. MacArthur foundation recognizing extraordinarily creative individuals with a track record of excellence. More information on this year's MacArthur Fellows.

[Waylon Wong]

[e-mail] if Trump's picks become reality it would be unprecedented to have so many millionaires and billionaires staffing key roles in federal government, leading agencies, and advising the president.

[Steve Nelson]

So I guess my first question is, what do you make of that?

[Darian Stacey]

I wasn't surprised.

[Steve Nelson]

That's Steve Nelson. He's a professor of political science at Northwestern University. And recently he and his colleagues did a study looking at how often billionaires enter politics and government.

[Darian Stacey]

So we used the Forbes list, which had just over 2,000 billionaires from around the world. And so what we ended up doing is looking for evidence that they had formally entered politics. And we found that 11% of the people on the list had entered politics, which means if you take nine randomly selected billionaires off that list, one of them is going to have political ambitions that go beyond just giving campaign contributions. They actually go into politics. So I wasn't super surprised to see that Trump found fellow members of his billionaire class that were willing to throw their hats into the ring.

[Waylon Wong]

Here's what was sort of surprising to Steve, though. The 11% of billionaires getting into politics or government was way higher than it was for other groups we often think of as producing a lot of politicians. For example, Steve says less than 1% of lawyers in the US go into politics.

[Steve Nelson]

So what do you make of that sort of overrepresentation? Why would billionaires give up running their business, which has given them, like, a very healthy income, to go into politics?

[Darian Stacey]

It does seem odd to me because super rich people can use other means to try to get what they want in the political realms. They can just give a bunch of money to a candidate and basically try to steer the policy agenda in that way. So why is it that these billionaires are entering politics at such a high rate? Well, one thing is that they are unconstrained. They don't have to go around with hat in hand asking for funds. They can just mobilize funds themselves. The other thing is to think about billionaire politicians and their interests. It's possible that billionaires are entering politics at such a high rate because they have particular interests in pursuing policies which help not only to protect their wealth, but to expand their wealth.

[Waylon Wong]

Interestingly, Steve says it's more common to see billionaires get into the political realm in countries where the governments are more authority authoritarian.

[Darian Stacey]

China and Russia alone account for about half of the world's billionaire politicians. And so in those two settings, what we think might be going on and in other authoritarian regimes, is that billionaire politicians are motivated to absorb the costs of entering politics because the benefits are really high. The incentives are really strong because what they really worry about is protecting their wealth. Because authoritarian regimes have weak rule of law, there's a risk of expropriation, and there's also the need to show fealty to the ruling regime. And the best way to do that for many billionaires is to say, I'm going to set aside some of my time and serve in the legislature or serve in a political post to make contacts, ensure that I am showing that I am loyal to the regime, and that way I can try to protect my wealth.

[Steve Nelson]

So if billionaires in government are more common in authoritarian regimes, what should we make of the fact that Trump's nominees draw heavily from the ranks of the not just the merely wealthy, but the super rich, the 1% of the 1%. Darian Stacey is a political science professor at the U.S. naval Academy, and he studies how politicians wealth can translate into policy.

There's some research that has looked at the impact of wealth on governance, but the research is really sort of a mixed picture.

[Waylon Wong]

Darian, by the way, says he's speaking as a private citizen, not on behalf of the Naval Academy or the US Government.

[Steve Nelson]

Some of these individuals might bring fresh ideas and a mindset that prioritizes results, which can often be a positive change in government. Some studies have shown that wealth can correlate with certain leadership traits like risk taking or decision making skills and strategic thinking, which are useful in both business and public administration. And then wealthy individuals often have access to large networks and resources that can aid them in policy development and implementation.

On the other hand, Darian says there's also evidence that extreme wealth can create a disconnect between average citizens and those in power.

So studies on things like socioeconomic diversity and leadership suggests that leaders from wealthier backgrounds are less likely to prioritize policies addressing things like inequality, poverty, and social safety nets. And some evidence that they might also unconsciously favor some policies that align with their own experiences and priorities, which if you are looking to address inequality, those unconscious biases could actually perpetuate inequality, Darian says.

[Waylon Wong]

Another possible problem with uber wealthy businesspeople in top tier government roles is the potential for conflicts of interest. During Trump's first administration, government watchdogs alleged that the president used his position to benefit his real estate business. This time around, Trump will be surrounded by even more fellow billionaires. The concern is these billionaire politicians could use their power and influence to benefit their own bottom lines.

[Steve Nelson]

When you look at the wealth of the incoming Trump administration, Steve from Northwestern says it fits into a global pattern. While there are plenty of rich people out there with liberal leanings, he says. The super rich are different.

[Darian Stacey]

The super rich are much more likely to affiliate with a conservative party with a party on the right side of the political spectrum, and that's true in the United States. There's two and a half times more Republican billionaire politicians in the United States, but it's also true outside of the.

[Waylon Wong]

United States, Steve says. Whether you think that's a good thing or not may come down to whether you feel like the policies and politics of an administration align with yours. But for Steve personally, he says it comes down to how he thinks about.

[Darian Stacey]

Democracy, regardless of whether you're a partisan of a left or the right, or whether you think that billionaires are more effective in decision making roles. I think the problem with having a huge number of super wealthy people or a high share of super wealthy people occupying government positions is it creates a dilemma for democracy, steve says.

[Steve Nelson]

If democracy is about average people picking leaders to represent the people's interest, will a government staffed by millionaires and billionaires be able to do that? This episode was produced by Corey Bridges and engineered by Jimmy Keighley. It was fact checked by Sierra Juarez Cake and Cannon edits the show and the indicator is a production of npr.

[NPR Sponsor]

This message comes from Schwab it's easy to invest in ideas you believe in with Schwab investing themes like online music and videos, artificial intelligence and electric vehicles. Choose from over 40 customizable themes.

[NPR Host]

[e-mail] this message comes from NPR sponsor Merrill Whatever your financial goals are, you want a straightforward path there. But the real world doesn't usually work that way. Merrill understands that. That's why with a dedicated Merrill advisor, you get a personalized plan and a clear path forward. Go to ML.combullish to learn more. Merrill, a Bank of America company what would you like the Power to do Investing Involves risk Merrill Lynch, Pierce Fenner and Smith Inc. Registered Broker Dealer Registered Investment Advisor Member SIPC this message comes the American Express Business Platinum Card offers world class business and travel benefits. This card was designed to help you get more for your business wherever it may take you. Learn [e-mail] AmExBusiness.