Michael Nigro/Sipa USA via AP Images
Sen. Elizabeth Warren (D-MA) speaks to a large crowd at the “Nobody Elected Elon” rally outside the Department of the Treasury, February 4, 2025, in Washington.
This article appears in the February 2025 issue of The American Prospect magazine. Subscribe here.
In the past few decades, American capitalism has become more concentrated, more corrupt, and more opaque. This is true of banking, insurance, telephone and cable companies, electric utilities, airlines, railroads, tech platforms, the drug industry, and of course hospitals and health systems. The trend is also infecting smaller industries that were traditionally locally owned, such as veterinary practices, tree services, pest control companies, nursing homes, and many more, all of which are being bought up by private equity companies.
Wall Street has a cynical term for this strategy: rollups. They frustrate the competition that makes capitalism tolerably efficient, raise profits, further enrich the rich, and take advantage of consumers and workers. Orchestrating mergers and acquisitions also enriches investment bankers, so the system feeds on itself.
This has occurred despite the heroic efforts of two of President Biden’s best appointees, FTC Chair Lina Khan and Jonathan Kanter of the Justice Department’s Antitrust Division, who made a dent in extreme concentration by reviving long-moribund antitrust enforcement.
But without a clear ideology and narrative, voters don’t connect the dots between corporate concentration and their own daily frustrations. Instead, voters vaguely blame a corrupted system. Voters perceive, all too accurately, that neither party is addressing their frustrations and that both are part of an establishment that someone called the swamp. And they’re right.
Donald Trump got elected a second time because Democrats failed to use the Biden interlude to articulate a general critique of corrupted capitalism and its impact on ordinary people. Instead, a talented demagogue deflected inchoate grievances against predatory capitalism onto immigrants, trans people, and condescending metro liberals.
Trump and his corrupt crony, the world’s richest man Elon Musk, epitomize the marriage of faux-populist rhetoric and personal grifting. Too many people admire the sheer nerve of Trump and Musk, and imagine that it will somehow spill over and benefit them.
Democrats can try to point out Trump’s hypocrisy, and they have. But that’s not sufficient. And the reason why Democrats have failed to tell their own compelling story is all too obvious: Democrats are part of the corruption. Not all Democrats, but enough Democrats to blur a coherent opposition narrative.
WHAT CONCENTRATION AND CORRUPTION have in common is that they are blindingly complicated and largely opaque to ordinary people. To grasp why health care is such a nightmare, you need to know something about the consolidation of insurers, providers, and pharmacy benefit managers by conglomerates like UnitedHealthcare; the systematic upcoding of bills; other pricing games that hospitals play; the deliberate crowding out of primary care doctors by more profitable specialists; the proliferation of other middlemen in the health system; and a lot more.
Only occasionally does the abuse break through to popular consciousness and popular anger, as after the murder of UnitedHealthcare CEO Brian Thompson, or in the popular revolt against the airline cartel during delays in 2022, which finally roused Transportation Secretary Pete Buttigieg to issue some pro-consumer rules.
But a political analysis on the part of the electorate is not self-executing. The spotlight on UnitedHealth was a rare teachable moment. The Democrats did not use it to teach.
Private equity’s takeover of more and more industries is another instance of abuses that are largely invisible to the general public. Only occasionally, as in the case of the takeover of a group of Catholic hospitals by Cerberus Capital, which rebranded the chain Steward Health and extracted over a billion dollars needed for patient care, is the abuse so flagrant that it becomes palpable.
But for the most part, the executioner’s face is well hidden. Ordinary people notice that nursing homes are deteriorating in quality, or that it has become far more expensive to take your dog to the vet, or that retailers keep going out of business. They don’t track changes in corporate ownership. The press simply reports that another iconic retailer went broke.
Much of what we do at the Prospect is investigative and explanatory pieces on the deepening corruption of American capitalism and how it affects regular Americans in their roles of workers, consumers, parents, patients. The story of how corrupted capitalism undermines the living standards and life chances of ordinary people adds up to a narrative and an ideology. But it doesn’t create a politics. That’s the job of an opposition party.
SOME DEMOCRATS GRASP THIS. The work of Elizabeth Warren, for example, provides a rough draft of what the opposition would be espousing if they were a Democratic Party worthy of the name.
For instance, Warren’s Accountable Capitalism Act, first introduced in 2018, would require any company with gross receipts over $1 billion to obtain a federal charter. For these companies, employees would elect at least 40 percent of the board of directors. A 75 percent vote of shareholders and directors would be required to approve any political spending over $10,000. The act would give directors a duty of “creating a general public benefit” with regard to a corporation’s stakeholders, including shareholders, employees, and the environment, and the interests of the enterprise in the long term.
The idea of requiring federal chartering of large corporations has been around since the Progressive Era, as an antidote to the weak system of state chartering that has created a classic race to the bottom. Warren is willing to name the problem right in the bill’s title: accountable capitalism.
National Review called Warren’s proposal “the most radical proposal advanced by a mainstream Democratic lawmaker to date.” That’s precisely the point. A proposal that ought to be at the heart of the Democratic Party program is at the fringe.
A second Warren bill, the Stop Wall Street Looting Act, seeks to end the enterprise as we know it. Private equity operators make their fortunes by looting the assets of the portfolio companies they acquire. Warren would curb the use of acquiring companies via debt, end “special compensation payments” to private equity owners, put those owners on the hook for operating losses, and restrict abuse of the bankruptcy laws. The 2024 version of the bill was expanded to prohibit private equity companies from selling hospital properties to real estate investment trusts.
Private equity exists only because of a huge loophole in the securities laws that should never have been created. It is at the heart of corrupted capitalism. It is also central to the screwing of workers, since private equity owners invariably cut wages and loot pension plans.
But Warren’s bill has just six Senate co-sponsors. Why? Because private equity operators include Democrats as well as Republicans, and they spread their political money around. The perception on the part of so many Trump voters that the supposed mainstream of both parties is corrupt turns out to be all too accurate.
THE DEMOCRATIC PARTY SHOULD BE explaining and narrating all of this. Instead, in the aftermath of the defeat of Kamala Harris, Democrats are all over the place in their diagnosis of what went wrong and how to fix it.
A related obstacle is that fixing a system as convoluted as health care is genuinely hard. Even if Democrats had the votes to replace the entire mess with national health insurance, the transitional challenges would be immense.
But partial policies can open the door to more transformative policies. When I was young, practical lefties were reading a French theorist named André Gorz, who came up with the concept of “non-reformist reform.” By that, Gorz meant policy changes or political demands that seemed merely incremental but that had the potential to lead to more transformative strategies.
By contrast, many seemingly reformist policies have the perverse effect of reinforcing existing structures. My colleague Paul Starr, in a classic article co-written several decades ago with Gøsta Esping-Andersen, called this policy trap “passive intervention.” When progressives lack either the votes or the imagination to achieve transformative policies, they settle for inefficient half measures that reinforce existing structures of private power and make the government look bad.
The two classic areas where this occurs, Paul and Gøsta wrote (in 1979!), are health care and housing. Their critique anticipated the flaws in the Affordable Care Act, which further entrenches the private health insurance system instead of supplanting it with true social insurance.
During the ACA debate, progressives pressed President Obama to allow people to opt for a Medicare-type “public option” for insurance. But Obama didn’t expend political capital on assembling the votes, even though the Democrats controlled both houses of Congress. Too many Democrats were in bed with the insurance industry.
In the case of housing, the government spends tens of billions subsidizing private developers to provide affordable housing, which is reversed as soon as the developer finds it expedient to convert to market-rate housing. Permanent social housing would be more efficient and more just, but government even under Democrats lacks the ideological nerve and the votes.
The Consumer Financial Protection Bureau, another Warren invention, is a splendid example of non-reformist reform. In protecting consumers from a variety of corporate abuses, the CFPB shines an educational light on just how predatory capitalism works.
I was personally involved in one epic case of non-reformist reform, the 1977 Community Reinvestment Act, which requires banks to affirmatively extend credit to underserved communities if they want regulatory approval for various activities. For four decades, the CRA energized community organizing around reinvestment goals and compelled banks to reverse redlining. This progress came to an abrupt halt after bipartisan collusion on extreme banking deregulation led to the 2008 financial collapse, wiping out several decades of progress.
A RELATED PROBLEM FOR DEMOCRATS is a vacuum of leadership. I cannot recall a time when there were so few Democrats who are plausible as national leaders or possible candidates for president.
Last December, Jon Stewart interviewed the very talented and eloquent Ben Wikler, the chair of the Wisconsin Democratic Party and a leading candidate for chair of the Democratic National Committee. So compelling was Wikler that Stewart was utterly smitten. He ended the segment by saying that Wikler should not be running to head the DNC, he should be running for president. Wikler is great, but what does it say about the state of the Democratic Party that someone who has never held public office seems more attractive as a presidential contender than any elected official?
Then again, it worked for Trump.
As my Prospect colleagues and I keep writing in different ways, this era of American politics will be a populist era. Either it will be the fake populism of billionaires scapegoating various categories of “other” while they use the power of the state to further enrich themselves and further debase democracy with the power of money. Or it will be authentic economic populism.
It’s too much to expect the Democratic Party to be reborn as an anti-capitalist party. But Democrats should at least be narrating the impact of concentrated capitalism on ordinary voters. If 2024 demonstrated anything, it was that a medley of left positions on social issues and modest economic measures are no match for Trumpism.
