Associated Press
Tom Steyer has strong words for corporate America: ‘We moved from a stakeholder model to a shareholder model, and that’s absolutely wrong.’
Tom Steyer wants you to know that he’s a businessman. He also wants you to know that he’s not that kind of businessman.
The first of two billionaires to enter the Democratic primary, Steyer has tried to turn his experience in hedge funds and the financial industry into an asset, arguing in speeches and public appearances that it lends him credibility to talk about the economy. This is an off-balance message for Democratic audiences, who are more accustomed to hearing Republicans make statements like “I’m the only one in this race who’s made a payroll.”
Dig a little deeper, as I did with Steyer by phone while he traveled through western New Hampshire on Wednesday, and you find that his viewpoint on the economy would not be out of place at a Bernie Sanders rally. He believes the corporate mentality of short-term thinking to boost shareholder profits has crippled America and its workforce. He believes the wealthy have extracted society’s gains and left nothing for everyone else.
“If you understand how corporate people think,” Steyer told me, “they look at their employees as people driving revenues or not. And if you’re not driving revenues, you are commoditized as a human being. You’re not an employee, not a partner, not a co-worker, but a digitized asset. Workers went from being partners to being widgets.”
“This economy isn’t working for the vast majority of Americans. Overall growth has been taken by rich Americans and corporations and that’s just a fact.”
What Steyer believes sets him apart is that he can best deliver that message when Donald Trump tries to convince the country that they’re living through the most prosperous moment in American history. “He’s running on the economy, and I’m going to go toe-to-toe with him,” Steyer says. “I understand what actually creates prosperity and success. This economy isn’t working for the vast majority of Americans. Overall growth has been taken by rich Americans and corporations and that’s just a fact.”
There isn’t much daylight between this analysis and how most of the other candidates talk. I went into this interview fairly skeptical of the argument that you have to come from business to tell the nation what’s wrong with business. It relies on an ineffable belief that someone who has proven they can make a lot of money in America occupies a higher trustworthiness. Aside from being something only someone who’s made a lot of money would say, recent experience shows the opposite to be the case: Donald Trump, after all, has managed a life of luxury through lying and cheating.
Democratic voters haven’t fully engaged on the idea either. Steyer has thrown gobs of money into television ads in early-voting states, with little competition, since Michael Bloomberg has focused further down the calendar. So far, this has produced a skinny 2.1 percent polling average nationally, according to 538. Steyer has fared a tick better in Iowa (3.3 percent), New Hampshire (3.5 percent), Nevada (5.1 percent, good enough for fifth place), and South Carolina (6.3 percent, which is in fourth, ahead of Pete Buttigieg).
There is, however, a certain allure to the notion of a “traitor to his class,” someone who turns on their elite colleagues; it worked for FDR, after all. For Steyer, such a posture would represent quite a journey. He worked for Robert Rubin at Goldman Sachs as a risk arbitrage specialist, finding opportunities in chaos. After a stint at Morgan Stanley and private equity, Steyer started Farallon Capital with $15 million in seed money, and grew it by scooping up distressed real estate after the S&L crisis. Farallon became the first hedge fund to raise money from a university endowment, taking a portion of Yale’s nest egg. Today, hedge funds control one out of every five endowment dollars. He was on the short list to become Hillary Clinton’s Treasury Secretary in 2008, and was part of the Rubinite think tank at Brookings, the Hamilton Project.
Here’s what that same guy is saying today. “Something dramatic changed in the 1980s in terms of how people running corporations and boards thought about their responsibility. We moved from a stakeholder model to a shareholder model, and that’s absolutely wrong. It’s corrosive and destructive to America.” In our interview, Steyer also condemned the Laffer Curve, which predicted that lower taxes would increase federal revenues, and the concept of trickle-down economics. He accused the Trump administration of “committing crimes against humanity” on the border. He was proudly liberal and even fiery at times.
Steyer has taken a large share of his fortune and put it into fighting the climate crisis, raising youth turnout, and impeaching Donald Trump. Some would prefer he and Michael Bloomberg continue to use their money to boost candidates and causes, instead of tossing it into the presidential black hole. Steyer says he made his decision to run after watching the first couple of debates. “[Candidates] were stating some important policies, but I view Washington as fundamentally broken,” he says. “To me, if government doesn’t work for the people and we don’t solve the climate crisis, nothing else matters.”
I don’t question Steyer’s sincerity and his desire for justice. He has repeated the line “corporations have taken control over our government” so much that he may even believe it. He has a couple of goofy ideas in his democracy reform agenda, like term limits and national-initiative campaigns, both of which have been a disaster in California, Steyer’s home state. But the rest of the agenda is pretty mainstream, and would have been seen as radical just a few years ago.
He wants to declare a climate emergency on day one of his presidency, and commit $2 trillion in investments toward carbon reduction. That’s his number one priority. He’s for two years of free college, not four; a public option and insurance rate review, not single-payer. But he supports a wealth tax and a $15/hour minimum wage. He wants to enshrine the right to health care, clean air and water, and quality education in the Constitution.
It’s not democratic socialism, but it could be worse. He’s certainly a better fit as a class traitor than still-a-plutocrat Bloomberg, whose economic agenda (featuring skills training!) would be weak tea if it were 1992, let alone 2020.
But I still bump on Steyer’s contention that only someone with his corporate expertise and sophistication can make the economic sale to the public. “We need somebody making decisions who can interpret and understand the mindset of the business world,” he claims. “If you’re in the meltdown in 2009 and [JPMorgan Chase CEO] Jamie Dimon comes to you, how do you interpret what he says?”
I think “assume he’s lying” is the answer. And I didn’t really need an executive stint to figure that out.
