Why the Wealthy Fear Pandemics

There have been numerous stories of the very wealthy retreating from cities to flee to the country estates and - better yet if one owns one on one - remote islands - to escape the COVID-19 pandemic and crowded cities such as New York.  They seek to avoid the masses and potential infection.  But, as a piece by a historian in the New York Times lays out, the wealthy have another reason to fear a pandemic and the upheaval that it can bring: the masses demand a more equal playing field and a bigger piece of the economic pie - something Republican "reverse Robin Hood policies" strive to prevent.  At present, the verdict is out on whether or not the COVID-19 pandemic will cause a demand for economic change in America.  Rapidly rising unemployment (another 6 million workers are likely to file unemployment this week) may work against Republican regimes which have long sought to kick the unemployed to the curb or limit unemployment assistance to levels that do not allow for survival.  One can hope that the majority will say "enough" to the 1% sucking up more and more of the nation's wealth and that progressive changes will come.  Meanwhile, here are article highlights on the world's past experiences:  

In the fall of 1347, rat fleas carrying bubonic plague entered Italy on a few ships from the Black Sea. Over the next four years, a pandemic tore through Europe and the Middle East. Panic spread, as the lymph nodes in victims’ armpits and groins swelled into buboes, black blisters covered their bodies, fevers soared and organs failed. Perhaps a third of Europe’s people perished.

The plague returned a mere decade later and periodic flare-ups continued for a century and a half, thinning out several generations in a row. Because of this “destructive plague which devastated nations and caused populations to vanish,” the Arab historian Ibn Khaldun wrote, “the entire inhabited world changed.”

The wealthy found some of these changes alarming. In the words of an anonymous English chronicler, “Such a shortage of laborers ensued that the humble turned up their noses at employment, and could scarcely be persuaded to serve the eminent for triple wages.” Influential employers, such as large landowners, lobbied the English crown to pass the Ordinance of Laborers, which informed workers that they were “obliged to accept the employment offered” for the same measly wages as before.

As a result of this shift in the balance between labor and capital, we now know, thanks to painstaking research by economic historians, that real incomes of unskilled workers doubled across much of Europe within a few decades. According to tax records that have survived in the archives of many Italian towns, wealth inequality in most of these places plummeted. In England, workers ate and drank better than they did before the plague and even wore fancy furs that used to be reserved for their betters.

At the same time, higher wages and lower rents squeezed landlords, many of whom failed to hold on to their inherited privilege. Before long, there were fewer lords and knights, endowed with smaller fortunes, than there had been when the plague first struck.

But these outcomes were not a given. . . . . The policy choices that result determine whether inequality rises or falls in response to such calamities. And history teaches us that these choices can change societies in very different ways.

Looking at the historical record across Europe during the late Middle Ages, we see that elites did not readily cede ground, even under extreme pressure after a pandemic. During the Great Rising of England’s peasants in 1381, workers demanded, among other things, the right to freely negotiate labor contracts. Nobles and their armed levies put down the revolt by force, in an attempt to coerce people to defer to the old order. But the last vestiges of feudal obligations soon faded. Workers could hold out for better wages, and landlords and employers broke ranks with each other to compete for scarce labor.

Elsewhere, however, repression carried the day. In late medieval Eastern Europe, from Prussia and Poland to Russia, nobles colluded to impose serfdom on their peasantries to lock down a depleted labor force. This altered the long-term economic outcomes for the entire region: Free labor and thriving cities drove modernization in western Europe, but in the eastern periphery, development fell behind. But more often than not, repression failed. The first known plague pandemic in Europe and the Middle East, which started in 541, provides the earliest example. Anticipating the English Ordinance of Laborers by 800 years, the Byzantine emperor Justinian railed against scarce workers . . . . The doubling or tripling of real incomes reported on papyrus documents from the Byzantine province of Egypt leaves no doubt that his decree fell on deaf ears. None of these stories had a happy ending for the masses. . . . . In most European societies, disparities in income and wealth rose for four centuries all the way up to the eve of World War I. It was only then that a new great wave of catastrophic upheavals undermined the established order, and economic inequality dropped to lows not witnessed since the Black Death, if not the fall of the Roman Empire. In looking for illumination from the past on our current pandemic, we must be wary of superficial analogies. Even in the worst-case scenario, Covid-19 will kill a far smaller share of the world’s population than any of these earlier disasters did, and it will touch the active work force and the next generation even more lightly. Labor won’t become scarce enough to drive up wages, nor will the value of real estate plummet. And our economies no longer rely on farmland and manual labor.

Yet the most important lesson of history endures. The impact of any pandemic goes well beyond lives lost and commerce curtailed. Today, America faces a fundamental choice between defending the status quo and embracing progressive change. The current crisis could prompt redistributive reforms akin to those triggered by the Great Depression and World War II, unless entrenched interests prove too powerful to overcome.

2018: Will Voters Continue to Act Against Their Own Economic Interest

Historically when wealth disparities have become too great, the lower classes have risen up and the top tier of the population hoarding most of the wealth has fared badly.  The French Revolution and the Russian Revolution are but two examples of catastrophic consequences for the top classes.  Britain in contrast - and partly as a result of the terror the French example provided - managed to avoid the French example by making changes that improved the lot of the lower classes.  Those lessons seem lost on today's Republican Party which, combined with pro-rich and pro-corporation policies are overseeing the stagnation of wages for the majority as the top 0.01% ranks in increasing wealth.  Bizarrely, many Americans continue to vote Republican and against their own economic interests.  As a column in the New York Times explores, the carrot(s) that induce such short sighted behavior are views on race, religion, abortion, LGBT rights and immigration.   As the 2018 midterm elections near, the question becomes whether such short sighted voting will continue. Here are column excerpts: 

Even as corporate America has unleashed insatiable consumer demand for innovative low-cost goods and technology, it has driven economic trends that continue to increase inequality, stall wage growth and strengthen the power of business. 

Nearly half the country’s voters support a president who embraces upwardly redistributive policies that many of them do not benefit from.

Why? Because on race, religion, abortion, LGBTQ rights and immigration, President Trump — unlike previous Republican presidents — has given his voters exactly what they want.

This is patently true in the case of immigration. As The Washington Post reported in June, “The Trump administration has ramped up arrests of illegal immigrants, slashed refugee programs, criminalized unauthorized border crossings” and secured a ban on travelers from six majority-Muslim nations.

But recent scholarly research shows how the interests of those on top of the economic pyramid are gaining strength.

“Industries are increasingly characterized by a ‘winner take most’ feature where a small number of firms gain a very large share of the market,” David Autor, an economist at M.I.T., and four co-authors, write in “The Fall of the Labor Share and the Rise of Superstar Firms.”

They go on: Markets have changed such that firms with superior quality, lower costs, or greater innovation reap disproportionate rewards relative to prior eras. Since these superstar firms have higher profit levels, they also tend to have a lower share of labor in sales and value-added. As superstar firms gain market share across a wide range of sectors, the aggregate share of labor falls.

According to Autor and his colleagues, the decline in the size of the pie going to labor — known among economists as “labor share” — coincides with the rise of superstar firms and increasingly with the use of outsourcing to “temporary help agencies and independent contractors and freelancers for a wider range of activities previously done in-house, including janitorial work, food services, logistics and clerical work.” . . . Together, these workplace trends account “for a significant portion of the increase in U.S. wage inequality since 1980.”

Policymaking, judicial decisions and structural changes in the economy have functioned in concert to weaken the clout of voters, consumers, workers and minorities — with considerable support and little or no objection from a key part of the electorate.

The Supreme Court has played a well-documented role in this process, especially in decisions on campaign finance and business law that have empowered corporations and the super rich.

“The Court has given the green light to restrictive voter identification laws, without requiring states to prove that such laws prevent any appreciable amount of voter fraud or promote public confidence in the fairness of the electoral process,” Richard Hasen, a law professor at the University of California-Irvine, wrote in an email in response to my inquiry . . . .

The downstream consequences of concentration for employees are substantial, Shambaugh et al write: “Concentration in product markets can be mirrored by its labor market equivalent — monopsony — that exists when employers face limited competition for workers.” Firms dominating concentrated labor markets “face relatively inelastic labor supply” (i.e., job choices are limited) which, in turn, allows employers to “reduce wages without losing all (or even a large fraction) of their workforces.”

Among economists, one of the most discussed developments is the precipitous decline in the percentage of total economic output flowing to labor, . . . . In other words, shareholders and business owners amassed profits amounting to $1.35 trillion or $17,000 per employee as a result of the increase in profit share.

This bleak tale does not end here, as new pieces of evidence accumulate. Dominique Guellec and Caroline Paunov, senior economists at the Organization for Economic Cooperation and Development, argued in a 2017 paper, “Digital Innovation and the Distribution of Income,” that without government intervention, increased inequality is virtually inevitable:

The growing importance of digital innovation — new products and processes based on software code and data — has increased market rents, which benefit disproportionately the top income groups. In line with Schumpeter’s vision, digital innovation gives rise to ‘winner-take-all’ market structures, characterized by higher market power and risk than was the case in the previous economy of tangible products.

Increased profits, in turn, “accrue mainly to investors and top managers and less to the average workers, hence increasing income inequality.”

In the United States, the top 0.01 percent holds 9.9 percent of the nation’s total wealth excluding deposits in tax havens. When wealth in tax havens is included, the share held by the top 0.01 percent rises to 11.2 percent.

While an increase from 9.9 to 11.2 percent amounts to a 1.3 percentage point increase, in real dollars that translates to $1.06 trillion, or roughly $40 million for every adult in the top 0.01 percent.

A continued failure of wages to advance, despite job growth, while corporate profits shoot up to record levels would give Democrats a significant counterargument to legitimate Republican claims of overall economic improvement.

[T]he question for 2018 will be which demographic and generational groups will see their turnout climb or drop the most.

Since 2016, Trump has successfully angered millions of voters, especially women, who have been mobilizing in support of Democratic House and Senate candidacies. Vilified and insulted members of racial and ethnic minorities are seething. At the same time, millions of others — a majority of them men — have been infuriated by economic and cultural developments they feel have devastated neighborhoods, local environments and workplaces so that they can no longer recognize them.

How many Americans will yield to apathy and how many will believe with conviction that each vote matters?

A Closing Argument for Voting for Hillary Clinton

There are so many reasons not to vote for Donald Trump.  For some, that is all the motivation needed to guarantee their vote for Hillary Clinton.  For others who have heard the GOP's manufactured "Clinton scandals" for years, hesitancy remains about Clinton.  Personally, I do not know why, when Trump is such a horrific and dangerous individual, anyone moral can support the man.  Other than racism, ignorance, male chauvinism and/or bigotry towards others that Trump has fanned so well, I don't understand the attraction.  I truly wish some of his supporters would take a long look in the mirror and admit which of the former motivates them to support Trump.  A column in the New York Times makes a closing argument of why voting for Hillary Clinton is the right thing to do on Tuesday.  I agree with the author.  The piece is worth a full read.  Here are highlights:

[I]n this last column before the election I want to pitch you the reasons to vote for Clinton and not just against Donald Trump.

I’ve known Clinton a bit for many years, and I have to say: The public perception of her seems to me a gross and inaccurate caricature. I don’t understand the venom, the “lock her up” chants, the assumption that she is a Lady Macbeth; it’s an echo of the animus a lifetime ago some felt for Eleanor Roosevelt.

In fact, what makes Hillary Clinton tick has always been a 1960s-style idealism about making the world a better place.

Clinton has made thousands of compromises and innumerable mistakes, her pursuit of wealth has been unseemly and politically foolish, and it’s fair to question her judgment on everything from emails to Iraq. But understand this, too: At the core she is not a calculating crook but a smart, hard-working woman who is profoundly concerned with getting things done for those left behind.

Aside from shattering the glass ceiling for women, Clinton would bring three particular strengths to the presidency:

First, she knows the world exceptionally well and is essentially a very bright, disciplined nerd who traveled to more countries as secretary of state than any of her predecessors.

Second, Clinton had a history of playing well with Republicans when she was in the Senate and secretary of state, so there’s some small hope that we could inch back to governing.

“She is extremely well respected throughout the world, handles herself in a very classy way, and has a work ethic second to none,” Senator Lindsey Graham, a South Carolina Republican, said in 2012.

Third, Clinton cares deeply about impoverished children and others who are voiceless. In Arkansas, she started an early childhood program. In Washington, she helped establish CHIP, the Children’s Health Insurance Program, which supports more than eight million needy American kids.

One of America’s foremost needs is to address inequality and cycles of poverty. These are issues that Clinton has wrestled with for more than 40 years.

Some of you are thinking: But the emails! The foundation! Benghazi! So let’s look at the standard accusations.

Benghazi has been examined by at least eight panels, and not one uncovered major wrongdoing by Clinton. The Clinton Foundation created conflicts of interest — and saved countless lives from AIDS. Yes, Clinton appears to have set up her own email server to evade FOIA searches, which was sneaky and wrong, but State Department officials for many years routinely have conducted business on their own email accounts.

Of course, for many, the greater appeal of Clinton is that she’s not Trump. He simply falls outside the norms: A fraudster who seems a racist, who has cheated people not only at Trump University but regularly through his career, who boasts of sexual assaults and whom 17 women have publicly accused of improper behavior, who has flip-flopped 138 times by one count, who lies every five minutes by another, and who has less public service experience than any incoming president in history.

But my point is that this election is not just a weighing of two scoundrels; Clinton is better than that, and she is in politics because she cares about something larger than herself.

[T]oday’s widely held caricature of an avaricious, selfish and manipulative crook is to me just plain wrong. Sure, she compromises, she sometimes dissembles and at times her judgment has been flawed. But fundamentally she is a morally serious person whose passion for four decades has been to use politics to create a more just society. That’s her real conviction.

Reflections on The Democratic Presidential Debate

Perhaps the most striking thing about the first Democratic presidential debate last night was the fact that real issues and policy considerations were discussed in sharp contrast to the Republican debates which so far have largely consisted of sound bites pushing the favorite racist and paranoia based concerns of the increasingly delusional GOP base and/or taking cheap shots at other candidates.  It's as if this debate involved adults versus the GOP debates where loud mouth bullies and story tellers have held sway.  The contrast is striking and ought to make thinking voters wonder WTF is wrong with the GOP field of clowns.   Hillary Clinton and Bernie Sanders dominated the debate with the others making some points but nonetheless in the shadows of Clinton and Sanders.  Hillary did a better job than I expected.  A column in the New York Times reflects thoughts similar to my own.  Here are highlights:

I never doubted that Hillary Clinton had many talents.  I just didn’t know that seamstress was among them.

There were moments in the first Democratic presidential debate on Tuesday night when she threaded the needle as delicately and perfectly as a politician could.

The debate’s moderator, Anderson Cooper, noted that she’d told some audiences that she was a progressive but extolled her moderation in front of others. Wasn’t she just a chameleon, flashing whatever colors suited her at a given moment?

“I’m a progressive, but I’m a progressive who likes to get things done,” she said strongly but not stridently. “I know how to find common ground and I know how to stand my ground.”

Even when she was confronted anew by her vote in the Senate long ago to authorize the invasion of Iraq, she was neither defiant nor apologetic, steering a smooth midcourse by recalling that at debates in 2008, Barack Obama had attacked her for that. “After the election,” she pointed out, “he asked me to become secretary of state. He valued my judgment.”

The subject of Iraq caused her less grief than Sanders suffered on gun control, when not only Clinton but also Martin O’Malley, the former Maryland governor, rejected his explanation of votes in the Senate against various bills and his insistence that he was representing rural areas with gun cultures, not a nationwide electorate. It was clumsy because he presents himself as a creature of pure principle, immune to political convenience.

But on Tuesday night an odd sort of role reversal occurred. For much of the debate, Sanders somehow came across as the embattled incumbent, targeted by the other four candidates, while Clinton came across as the energetic upstart.

It was as poised a performance as she’s finessed in a long time, and while I’ve just about given up making predictions about this confounding election — I never thought Donald Trump would last so long, and I never saw Ben Carson coming — I think Clinton benefited more from Tuesday’s stage than Sanders did.

She mixed confidence and moments of passion with instances of humor, and her manner was less didactic and robotic than it can often be.

[S]he was seldom rattled, though the discussion of her use of a home-brewed server for her emails as secretary of state did prompt a visible stiffening of her posture, a conspicuous strain in her smile. Will she ever, ever find language that takes full ownership of her mistake and that puts real flesh on her continued claim that she’s being as transparent as possible?

It was perhaps Sanders’s best. Surprisingly, he called for an end to talk about the emails, saying there were more important issues to focus on. 

And she benefited from the visual contrast when she stood side by side on TV next to Sanders, with his slight hunch, his somewhat garbled style of speech, and a moment when he cupped his hand behind his ear, signaling that he hadn’t heard the question.

He evoked yesterday. Despite many decades in the political trenches, she didn’t. It was a nifty trick. Turns out she’s a bit of a sorceress as well.

The Pushback Against Unfair Labor Practices

As noted in a post yesterday, the wages of most Americans have stagnated over the last 40 years and most of the profits of soaring worker productivity has gone to business owners and large corporations.  The power of labor unions which helped build America's middle class has been crippled and far too many employees find themselves with no real bargaining power.  Adding to the employment racket is the practice of making employees "salaried workers" and then demanding hours of work that effective drive down the real hourly wages paid to the ridiculous with no chance for overtime pay.  Jeb Bush thinks American need to work longer hours and the GOP wants to destroy unions to further erode workers' power.  As a column in the Washington Post notes, some efforts are being made to even the playing field.  Here are highlights:

On this Labor Day, American workers may be beginning to reclaim what by right should be theirs. To be sure, the economic statistics continue to appall: In the second quarter of this year, for instance, labor costs rose at their lowest rate since the early ’80s — a measly 0.2 percent, despite steady economic growth and falling unemployment. That’s what happens when the income gains from work accrue almost entirely to owners, stock players and top executives.

But the pushback against the imbalances of power and income between workers (who have little) and employers (who have lots), which has been spurred by fast-food workers’ “Fight for 15,” is showing some distinctly positive results. Ordinances to raise the local minimum wage, for instance, which first popped up in liberal strongholds such as San Francisco and Seattle, have in the past few weeks been enacted in St. Louis; Kansas City, Mo.; and Birmingham, Ala. A proposed ballot measure to raise the minimum wage to $15 by 2021 in California — home to one of every eight U.S. workers — commanded 68 percent support in a Field Poll survey last week.

Unions are polling better, too: In a mid-August Gallup Poll, they had a 58 percent approval rating, including 66 percent among adults under 35. That’s radically at odds, of course, with the percentage of private-sector workers who actually belong to unions, which is just 6.6 percent. The chasm between the number who approve and the number who belong stems from decades of union smashing by employers

Last week, the President Obama-appointed majority on the National Labor Relations Board ruled that a local union representing staffing agency employees at Browning Ferris, a California waste-management company, could bargain with Browning Ferris itself: The parent company, the board members said, was really a joint employer. The new joint-employer standard will help fast-food workers seeking to unionize chains such as McDonald’s, but it likely will spur even more immediate unionization efforts in such permatemp-reliant workplaces as warehouses, hotels and factories.

No effort to reduce our towering levels of inequality can succeed unless workers can amass more power. On this Labor Day, they appear to be finding ways to do just that. 

The GOP: Warriors of the Aristocracy

With Hillary Clinton having announced that bringing relief to the the plight of the working and middle classes will be a theme of her presidential campaign, we can expect lip service from GOP candidates that will show feigned concern for average Americans.  Talk, of course, is cheap and talk is all the GOP will actually bring to the table.  Since 1977 - the year I graduated from law school - inflation has been in the neighborhood of 287.3%.  Rest assured, that wages for average Americans has not kept pace.  Even in the legal realm, fees for things such as a real estate settlement have nowhere near kept up with the rate of inflation.  A piece in Salon looks at the true GOP agenda as being warriors for the "aristocracy."  Here are excepts that look at GOP policies rather than GOP lip service:

It’s been quite interesting to see Republicans embrace the notion that wealth inequality (or any inequality) is something to worry their pretty little heads about. Over the winter we heard numerous reports of various GOP luminaries expressing serious concern that average Americans were getting the short end of the stick while the wealthy few reaped all the rewards. Ted Cruz might as well have put on a blond wig and called himself “Elizabeth” when he railed against it after the State of the Union:

“We’re facing right now a divided America when it comes to the economy. It is true that the top 1 percent are doing great under Barack Obama. Today, the top 1 percent earn a higher share of our national income than any year since 1928,”

And here we thought that was supposed to be a good thing. Aren’t they the “job producers”? That’s how weird the GOP’s messaging has gotten lately. Mitt “47 Percent” Romney clutched his very expensive opera-length pearls, wailing that “under President Obama, the rich have gotten richer, income inequality has gotten worse and there are more people in poverty than ever before.” Rand Paul channeled his heretofore unknown inner Bernie Sanders, proclaiming that “income inequality has worsened under this administration. 

This certainly wasn’t something they lost any sleep over before now. . . . this sort of thing is called “issue-trespassing,” where one party attempts to co-opt an advantage of the other by pretending to care about something nobody thinks they care about. In this case, the GOP seemed to be admitting that their reputation as the party of the 1 percent wasn’t helpful to their cause, so they decided to try to shift the blame to President Obama.

[I]t’s hard to see how anyone can possibly believe that the Republican Party, which fetishizes low taxes for the rich above all other priorities, truly cares about wealth inequality; but perhaps this is one of those times when the mere pretense of caring signals that they understand how badly their reputation of callous disregard for everyday Americans’ economic security has hurt them.

[T]his shallow attempt at appearing to give a damn was short-lived. This week the GOP is voting, as they always do, to ensure that the heirs to the Wal-Mart fortune won’t be faced with the terrible responsibility of having to pay taxes on their inheritances. Dana Milbank of the Washington Post pointed out just how successful these protectors of the progeny of the one percenters have been in recent years:

It had long been a conservative ideal, and the essence of the American Dream, to believe that everybody should have an equal shot at success. But in their current bid to end the estate tax, Republicans could create a permanent elite of trust-fund babies. The estate tax was a meaningful check on a permanent aristocracy as recently as 2001 . . . The current exemption of $5.4 million (the current estate tax has an effective rate averaging under 17 percent, according to the Urban-Brookings Tax Policy Center) does little to prevent a permanent aristocracy from growing — and abolishing it entirely turns democracy into kleptocracy.

This is nothing new, of course. The conservative project has always been fundamentally about aristocracy. Sure, they love to wax on about freedom and liberty but the freedom and liberty they care about is the freedom to attain property and pass it on to their heirs. Everything else is secondary. What’s more interesting is the way they are able to make ordinary people who will never benefit from this scheme — in fact, they will suffer  – agitate for it as if it meant the bread on their own table and the roof over their own heads.

Paul Waldman tackled this phenomenon in a piece for the American Prospect a while back. He concluded that voters didn’t understand that the tax only kicks in for very high amounts, and that most people instinctively think it should be okay to bequeath your fortune to your kids — regardless that the consequences of vastly wealthy people doing this are fundamentally un-American.
Waldman mentioned this silly notion as well:

Americans tend to think that no matter what their current situation, eventually, they’re going to be rich. Most of us are wrong about that, but that’s what we think. It’s practically our patriotic duty to believe it. So most everyone thinks that this tax will apply to their estate upon their death, no matter how modest that estate might be at the moment.

This is one of the main keys to the perpetuation of the aristocratic project: Convincing average people to support “their betters” with the promise that they will themselves benefit. In the old aristocracy, this used to be a simple pledge of fealty to ones noble house, but American conservatives have “democratized” it to make the serfs and peasants believe that they too will be nobles one day if only they agree to allow the rich to keep every last penny of their wealth. It’s a very sweet scam.

Unfortunately for the conservatives, inequality is becoming impossible to ignore and the people are starting to wake up to what is happening. The confusion on the right about how to handle it is a sign that it’s verging out of their control.

 

[S]imply paying lip service to a democratic, egalitarian concern is probably not going to be enough to give them cover when the Republican stereotype of being servants of the rich is so deeply embedded in our political culture. (Thanks Mitt!) Voting for the Paris Hilton tax exemption bill certainly won’t help.

Hillary Clinton’s Money Issues

Since Bill Clinton left the White House, the Clintons have done very well financially and, with income inequality a new hot ticket item - even Republicans are pretending to be concerned about the issue even as GOP controlled state legislatures are passing tax cuts for the rich while raising "user fees" that hit the poor hardest - the question becomes whether or not the Clintons' ties to big money will undermine Hillary's would be populist message.  A piece in The New Yorker looks at the situation.  Here are highlights:

This week, as the Democratic National Committee was preparing to announce that Philadelphia will host the Party’s 2016 convention, Hillary Clinton’s still undeclared Presidential campaign was running into a media squall about money—two of them, actually. First, David Brock, the conservative activist turned liberal activist, resigned from Priorities USA Action, a big money-raising group that is supporting Clinton, and accused the group of taking part in an “orchestrated political hit job” on two other pro-Clinton groups that Brock is involved with. Then, the Guardian revealed that a number of wealthy donors to the Clinton Foundation, a philanthropic organization set up by Bill Clinton, were clients of the Swiss division of H.S.B.C., a big bank that is embroiled in a tax-avoidance scandal.

The upshot of the Brock story was that Hillary’s money guys and gals are squabbling, and that Priorities USA Action, the political-action committee that spent seventy-five million dollars supporting Barack Obama, in 2012, is off to a slow start this year. (According to Politico, it had less than half a million dollars in the bank at the end of 2014.) The Guardian story, which was based on leaked documents from H.S.B.C., identified seven rich donors to the Clinton Foundation who had bank accounts at H.S.B.C.’s Geneva branch. One of them, Richard Caring, a British entrepreneur, “used his tax-free Geneva account to transfer $1m into the New York-based foundation,” the newspaper reported. “The HSBC records suggest Caring’s $1m donation was paid in return for former president Bill Clinton’s attendance at a lavish costume charity ball organised by Caring in St Petersburg, Russia.”


Outside of the political bubble, I doubt that one likely 2016 voter in twenty noticed either of these articles, or the follow-ups. But, at a moment when Hillary is reported to be consulting with numerous experts about how to tackle rising inequality, the articles raise anew an awkward question: How far will the Clinton family’s ties to moneyed interests complicate Hillary’s efforts to fashion a populist campaign built around the theme of defending the middle class?

One way of seeking to answer that question is to point out that, in politics (and philanthropy, too), cultivating donors and raising a lot of money are unavoidable parts of the business. And, although some people, myself among them, will never be wholly persuaded that he who pays the piper doesn’t call the tune, the average voter doesn’t seem to judge candidates by their financial backers. 

Perhaps Clinton can recapture the spirit and message she displayed in the summer and fall of 2008. First, though, she will need to reinforce her defenses against the attacks that are sure to come from the left and the right.

One way to do that is to put together a formidable campaign apparatus and a big war chest. Until the Brock story broke, few people in the political world had believed that these objectives would present a major issue. Evidently, they might. The first task facing John Podesta, the departing White House official who is slated to become chairman of the Clinton campaign, will be to gather together the various Democratic fund-raising groups and persuade them to coöperate. That won’t necessarily be easy.
The issues relating to the Clinton Foundation, which Bill Clinton founded in 2001, go beyond internecine conflict and bruised egos. Some people close to the Clintons have long been concerned that the foundation’s biggest venture, the Clinton Global Initiative, could present some vulnerabilities for Hillary. In its own words, the C.G.I. “convenes global leaders to create and implement innovative solutions to the world’s most pressing challenges,” 

The Guardian was careful to avoid any suggestion of illegality. “It is not unlawful for US or other non-Swiss citizens to hold accounts in Geneva and there is no evidence any of the Clinton donors with Geneva accounts evaded tax,” the story said.. . . And, in addition, “it is not against US law or charity regulation to accept donations from non-US citizens, or from overseas accounts.”

This is a legitimate debate to have—and Hillary, at some point, may well be obliged to engage in it. Indeed, she might be eager to do so. From her perspective, discussing how many lives the Clinton Foundation has improved in sub-Saharan Africa and other deprived regions would be a lot more palatable than getting dragged into the tax affairs of some rich “friends of Bill” or the infighting among her fundraisers.