“The Kochs might have disavowed Trump, but in several important respects he was their natural heir and the unintended consequence of the extraordinary political movement that they had underwritten since the 1970s. For forty years, they had vilified the very idea of government. They had propagated that message through the countless think tanks, academic programs, front groups, ad campaigns, legal organizations, lobbyists, and candidates they supported. It was hard not to believe that this had helped set the table for the takeover of the world’s most powerful country by a man who made his inexperience and antipathy toward governing among his top selling points.—Jane Mayer, Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right [1]
By Stas Margaronis
As the Covid-19 virus spreads across the United States and the world, President Donald Trump and his anti-government supporters are receiving a civics lesson in the vital role of governmental agencies and government workers.
A Nation In Rebellion
There is a growing rebellion against years of attacks on government by billionaires and their allies as the failure of the Trump administration’s pandemic response places more and more American lives at risk.
Americans are seeing that governors, nurses, scientists, public health officials, federal, state and local employees can fight to prevent the spread of pandemic. Federal employees can also administer financial aid programs to help or save small businesses, and can distribute funds to help people who have lost their jobs and businesses.
These include federal employees at the Department of Health and Human Services, the Centers for Disease Control, the U.S. Army Corps of Engineers, the U.S. Coast Guard, U.S. Customs, the Internal Revenue Service, the Small Business Administration, the Federal Emergency Management Agency (FEMA) and many others.
Americans are demonstrating this public spirit in spite of the efforts by President Donald Trump to impede them:
* Rebellious governors are defying the President’s attempt to send Americans back to work by safeguarding their citizens lives and health and developing gradual re-opening plans.
* Rebellious nurses are shaming the President’s lack of pandemic response and preparedness by paying for his mistakes with their lives and by continuing to protest the lack of medical supplies at hospitals across the country.
* Rebellious public health officials are refusing to cave in to the President’s demands that they ignore the risk of contagion in their communities and place his re-election interests first.
* Rebellious U.S. Navy sailors aboard the aircraft carrier Theodore Roosevelt unleashed a firestorm of protests against the Trump administration’s decision to relieve their Captain of his command after he warned about the spread of Covid-19 cases onboard the Roosevelt.
* Subsequently, Acting Navy Secretary Thomas Modly was forced to resign after he called the Roosevelt’s Captain Brett Crozier “stupid” after Crozier sent a memo warning of coronavirus spreading among the sailors on the aircraft carrier.[2]
As recently as March 19th, President Trump still refused to recognize the vital role of the federal government and federal workers fighting the pandemic. He insisted that fighting the pandemic in the United States was the up to the states and not the federal government:
“First of all, governors are supposed to be doing a lot of this work, and they are doing a lot of this work…The federal government is not supposed to be out there buying vast amounts of items and then shipping. You know, we’re not a shipping clerk.”[3]
However, in April President Trump sought to override the governors and unilaterally order states to end Covid-19 restrictions. He did so even though public health officials warned him that it was too early. The threat of more infections and deaths caused a number of governors to rebel against President Trump stating they would issue their own orders based on the advice of public health officials who would validate that conditions had improved.
The governors’ rebellion included New York Governor Marion Cuomo, supported by a group of East Coast governors and California Governor Gavin Newsom, supported by the governors of Oregon and Washington. Trump was forced to back down and say he would abide by the governors’ decisions.[4]
As Jane Mayer points out in her book, Dark Money the attacks against the federal government did not begin with Donald Trump. Oil and gas magnates Charles and his late brother David Koch spearheaded a decades long national campaign to undermine the federal government and representative government through a complex web of foundations and front organizations.
A Wikipedia summary makes Charles Koch seem like just another solid successful businessman:
“Koch has been co-owner, chairman, and chief executive officer of Koch Industries since 1967, while his late brother David Koch served as executive vice president. Charles and David each owned 42% of the conglomerate. The brothers inherited the business from their father, Fred C. Koch, then expanded the business. Originally involved exclusively in oil refining and chemicals, Koch Industries now includes process and pollution control equipment and technologies, polymers and fibers, minerals, fertilizers, commodity trading and services, forest and consumer products, and ranching. The businesses produce a wide variety of well-known brands, such as Stainmaster carpet, the Lycra brand of spandex fiber, Quilted Northern tissue, and Dixie Cup.”[5]
Charles Koch’s net worth was reported to be $42.8 billion in 2020, according to Forbes.[6]
In Dark Money, Jane Mayer paints a different picture:
“Charles Koch’s mentor, the quasi-anarchist Robert LeFevre had taught the Kochs that ‘government is a disease masquerading as its own cure.’ Their extreme opposition to the expansions of the federal government that had taken place during the Progressive Era, the New Deal Era, the Great Society and Obama’s presidency had helped to convince voters that Washington was corrupt and broken and that, when it came to governing, knowing nothing was preferable to expertise. Charles Koch had referred to himself as a ‘radical’ and in Trump he got the radical solution he had hoped to spawn’”[7]
The Koch Brothers Lay Foundations For Trump’s Election and Anti-Government Administration
Mayer says the anti-federalist movement was the product of decades of work by a small group of neo-feudalist billionaires lead by Charles and David Koch.
She chronicles how the Koch brothers’ ascension to power was achieved through the weaponization of the Republican Party supported by lavish funding of numerous foundations and non-profit organizations, including: The Heritage Foundation, Cato Institute, colleges, universities and political action committees.
Victory began with the so-called grass roots Tea Party protests against President Obama’s Affordable Healthcare Act in 2009. By 2010 Republicans had wrested control of The House of Representatives and by 2014 Republicans won back control of the U.S. Senate making Obama effectively a lame duck president. Victory was achieved with the election of Donald Trump in 2016.
Until Jane Mayer’s 2010 exposure of the Koch brothers’ activities in the New Yorker magazine, few Americans were aware of the Koch’s critical investments in multiple extreme right-wing organizations and operations.
The results were to have tragic consequences as the Trump Administration has failed to effectively combat the deaths and economic dislocations caused by the Covid-19 pandemic.
Undermining The CDC
A 2019 report by the non-profit Trust for America’s Health focused on the danger posed by long-term underfunding of the Centers for Disease Control (CDC), the federal agency coordinating the nation’s coronavirus response. The result on the federal, state and local level, including preparedness for a pandemic, was to have dire consequences:
“The CDC is the nation’s leading public health agency. Its mission is to protect Americans from disease outbreaks, disasters, and unsafe food and water, and to reduce the incidence of leading causes of Americans’ deaths. To help accomplish its objectives, the CDC supports states, localities, tribes, territories, and community organizations in addressing leading health threats in their communities. Indeed, more than half of its program funding is redistributed to these partners…
The agency’s budget has not kept pace with the nation’s growing public health needs and emerging threats, particularly the rise in substance misuse and weather-related emergencies. The agency has expanded its substance misuse efforts in the past few years, but more resources are needed to address underlying causes, such as the impact of trauma or the lack of supportive school and community environments… Its funding for effective obesity and community prevention programs is inadequate to sufficiently support every state… Despite rapid growth in the elderly population, funding to support healthy aging at the CDC is minimal. Recent increases to funding for public health emergency preparedness, including for weather-related emergencies, have not made up for resources lost in earlier years, let alone emerging threats…. Finally, the CDC also lacks sufficient dedicated funding to adequately support the cross-cutting, foundational capabilities that form the backbone of comprehensive public health systems at the federal, state, and local levels…”[8]
Shortage Of Masks & Delayed Federal Response Is “Proof of Negligence”
As the Covid-19 virus spread, John Balmes, a professor of medicine at the University of California, San Francisco called the shortage of medical supplies and protective masks “negligence” on the part of President Trump and his administration:
“At least 5,000 health care workers have been infected in Italy out of over 92,000 total cases as of this writing. The risk of death due to COVID-19 increases with age, with individuals aged 50 to 59 at three times the risk and those aged 60 to 69 at 10 times the risk of those between ages 30 and 49.
In the United States, there are more than 500,000 physicians older than 50, representing just over half of the nations’ entire physician workforce. The average age of nurses in the United States is 51. A 48-year-old emergency department nurse in New York City died of COVID-19 on March 24, and emergency department physicians have been reported to have developed severe COVID-19 requiring intensive care in Washington State and New Jersey.
It is tragic that a country as wealthy as the United States cannot provide proper protective equipment to its health care workforce during a deadly viral pandemic. There is little excuse for inadequate stockpiling of N95 masks and other personal protective equipment like surgical masks and gowns. The novel coronavirus outbreak in Wuhan was not the first viral epidemic of recent years — the severe acute respiratory syndrome coronavirus (SARS) outbreak was in 2003, the Middle East respiratory syndrome (MERS) outbreak started in 2012, and there have been periodic avian flu outbreaks. Why weren’t we better prepared?
Badly designed lines of authority in the federal government have failed to provide proper protection for health care workers, and a disorganized and poorly coordinated response has left states and cities fighting to outbid each other for purchases of desperately needed safety equipment for their health care workers (and ventilators for their patients).
And even with an ineffective federal pandemic response team in place before the Wuhan outbreak, there was still sufficient time to prepare for spread of the virus to the United States. The severity of the novel coronavirus outbreak in China was recognized by the World Health Organization and U.S. intelligence agencies in the fall 2019.
Yet what was President Donald Trump’s response as late as February? It was “when it gets a little warmer, it miraculously goes away,” “just like the flu,” “a foreign virus,” and most incongruously, “The Coronavirus is very much under control in the USA. … Stock Market starting to look very good to me!”
Let me tell you, Mr. President, as a physician who takes care of patients at a public safety-net hospital, you never had the COVID-19 pandemic under control. You were worried more about the stock market than the pandemic. It was a public health emergency that you failed to take seriously until it was too late, and wide community spread is the result. Lives have been lost all over this country because of your failure to take seriously what your public health and intelligence experts were trying to tell you.”[9]
Silencing & Expelling U.S. Government Scientists
The Trump administration pursued a three-year attack against scientists in public health and other fields according to a New York Times report:
“In just three years, the Trump administration has diminished the role of science in federal policymaking while halting or disrupting research projects nationwide, marking a transformation of the federal government whose effects, experts say, could reverberate for years.
Political appointees have shut down government studies, reduced the influence of scientists over regulatory decisions and in some cases pressured researchers not to speak publicly. The administration has particularly challenged scientific findings related to the environment and public health opposed by industries such as oil drilling and coal mining. It has also impeded research around human-caused climate change, which President Trump has dismissed despite a global scientific consensus.
But the erosion of science reaches well beyond the environment and climate: In San Francisco, a study of the effects of chemicals on pregnant women has stalled after federal funding abruptly ended. In Washington, D.C., a scientific committee that provided expertise in defending against invasive insects has been disbanded. In Kansas City, Mo., the hasty relocation of two agricultural agencies that fund crop science and study the economics of farming has led to an exodus of employees and delayed hundreds of millions of dollars in research.”[10]
Undermining The IRS
Anti-federalists believed they scored a major victory imposing cutbacks in the budget of the Internal Revenue Service The result has been to undermine federal revenue collection for decades. In 2020, the under funding of the IRS would have tragic consequences as checks sent out to Americans from the $2 trillion stimulus to ease the Covid-19 economic shutdown faced some delays due to long-term cutbacks in the budget of the Internal Revenue Service. Reuters reported on the impact at the IRS:
“In order to put recession-fighting checks into the hands of millions of Americans, President Donald Trump will rely on a tax agency that has fewer workers, a smaller budget, and the same 1960s-era computer systems it had the last time it was asked to do so.
Hollowed out by budget cuts and hobbled by obsolete technology, the U.S. Internal Revenue Service has struggled over the past decade. Audits have dropped and taxpayer service has suffered, agency figures show.
Now Congress and the Trump administration are piling on more work as they scramble to contain the fallout from the coronavirus, which threatens to plunge the world’s largest economy into recession.
A new law signed by Trump on Wednesday creates tax breaks to underwrite a paid sick-leave benefit for workers. Lawmakers in the Senate were negotiating a plan over the weekend that could provide stimulus payments of more than $1,000 to millions of U.S. households.”[11]
The checks did start to go out but were then delayed so that President Trump’s name could be stamped on the checks. The Trump administration denied that the unprecedented move of politicizing IRS check resulted in delays in getting checks to needy Americans.[12]
Undermining The Small Business Administration
The inability of the Small Business Administration (SBA) to expeditiously process business loans authorized by the Covid-19 related stimulus bill is the result of the SBA being underfunded, understaffed and using old technology. A New York Times report explains:
“Five days after the start of a $349 billion emergency effort to get money into the hands of small businesses, the agency at the heart of the program is emerging as its biggest bottleneck.
The Small Business Administration, lightly staffed and working with aging technology, has been caught unprepared for the onrush of demand from desperate small-business owners who urgently need these loans as the coronavirus stalls the economy. In a boom year, the agency backs $30 billion of small-business loans — about the same amount that banks are now seeking on behalf of their customers in a day.
Larry Kudlow, the director of the National Economic Council, said on Tuesday that 178,000 loans totaling $50 billion had been approved for small businesses through the Paycheck Protection Program that was unveiled Friday by the S.B.A. and the Treasury Department. But bankers, small-business owners and others participating in the program say very little of that money has actually reached companies seeking the cash. The delays are causing confusion and panic among borrowers, especially those who see Trump administration officials playing up the program’s success. They worry they are being left behind.
“The expectation that this $2 trillion package would go through Congress and that the money would be flowing three days later, that was never a realistic expectation,” said Patrick Ryan, the chief executive of First Bank, a lender based in New Jersey. “But I get why people are frustrated.””[13]
The Treasury Department and Small Business Administration (SBA) tapped the entirety of funding allotted for the Paycheck Protection Program (PPP), which offers forgivable loans to small businesses intended to keep workers on payroll and small firms from going under but on April 16th the SBA announced the program had to be temporarily halted due to a lack of funding: “The SBA is currently unable to accept new applications for the Paycheck Protection Program based on available appropriations funding. Similarly, we are unable to enroll new PPP lenders at this time,”[14]
Kochs & Allies Systematically Undermine Federal Government
In her book Mayer identifies three objectives that the Kochs and their allies have achieved:
Tax evasion. The Kochs and their conservative allies won their first major victory over taxation with the election of Ronald Reagan in 1980. Reagan reduced the top income tax rate paid by wealthy taxpayers from 70 to 28 percent. The Reagan administration abolished controls on oil and gas industries, which were bitterly opposed by the Kochs and cut taxes on oil profits: “Koch Industries profits, predictably. skyrocketed.”[15] Many of these proposals had been promoted by the Washington, DC-based Heritage Foundation founded by fellow conservative billionaire Richard Scaife and also funded by many Fortune 500 companies. Mayer says they supported Heritage with tax deductible contributions and Heritage lobbied Congress to fight for lower taxes and less regulation.[16] The Kochs founded the Cato Institute with a similar agenda: “Lower taxes, looser regulations and fewer government programs…”[17] These institutions allowed the wealthy to make tax-deductible contributions that shielded income while fighting for lower taxes and less regulation. To the public, the supposedly academically neutral think tanks promoted the idea of tax cuts as a form of economic development. This became a successful bait and switch tactic for Republicans beginning with the Reagan Administration in order to enlist the middle class into supporting tax cuts that primarily benefited billionaires and the super wealthy. The result of major tax reductions under Presidents Reagan, George W. Bush and Donald Trump is income disparities between rich and poor have widened and spending for infrastructure and other government functions declined. Charles Koch founded Rampart College in 1966 to promote libertarian and anti-government themes. Rampart promoted free market ideology based on the teachings of Koch’s favorite Austrian economist, Friedrich Hayek. Hayek was critical of the role of government and praised businessmen as standard bearers of freedom. However, Koch ignored Hayek’s other teachings supporting minimum protections for the poor.[18] By 2018, Bloomberg reported: “In the second quarter of this year, investment spending by the federal government dropped below 1.4 percent of gross domestic product for the first time since the 1940s according to the latest data from the Bureau of Economic Analysis” This impacted “ investment in research and development, roads, bridges, transit systems, buildings, equipment.”[19]
Deregulation. By promoting tax cuts as economic development, the Kochs and their allies began to bleed revenues from federal, state and local governments. The Kochs and their allies promoted the idea that government programs and regulations were bad and undermined economic development. This policy was promoted by the Reagan administration, which abolished controls on the oil and gas industry welcomed by the Kochs (see above). [20] The Kochs and their allies fostered the idea that attacks on so-called excess government spending and de-regulation of industries would promote economic development. However, Reagan’s support of deregulation of the Savings and Loan banks helped lead to their collapse in 1989 requiring a $132 billion taxpayer financed bailout.[21] In 1982, “President Reagan signed the Garn-St. Germain Depository Institutions Act. It completely eliminated the interest rate cap. It also permitted the banks to have up to 40% of their assets in commercial loans and 30% in consumer loans. In particular, the law removed restrictions on loan-to-value ratios. It permitted the S&Ls to use federally-insured deposits to make risky loans. At the same time, Reagan cut the budgets of the regulatory staff at the FHLBB (Federal Home Loan Banking Board). This impaired its ability to investigate bad loans.”[22] The second more serious financial deregulation failure began with abolishing the landmark reform of speculative banking practices during the 1930s Depression, the Glass-Stegall Act. Its repeal was supported by Democratic President Bill Clinton in 1999. The repeal reflected a growing move toward speculative banking practices in the 1990s which accelerated after the election of President George W. Bush in 2000. Opponents of bank regulation disagree.[23] The reality is that banks and financial institutions used home mortgages backed by rising housing prices to sell speculative derivatives. The effect was similar to a pyramid scheme. As long as housing prices went up speculations were profitable. This house of cards began to collapse when housing prices stopped going up in 2006. By 2008 banks and financial institutions in the United States and around the world faced collapse because of these real estate speculations. Bailing out the U.S. banks required a $700 billion taxpayer-financed bailout followed by a $787 billion economic stimulus passed under the Obama administration. The stimulus reduced the economic hardship people suffered during the recession of 2008-2010. Conservatives were livid about the huge expenditures for the bailout and stimulus and mounted a successful attack against excessive spending by the Obama administration in 2009.[24] In 2010 the Dodd-Frank Act was passed to impose tougher regulatory restrictions on banks to prevent a future meltdown. In 2018, President Trump won passage of an act that rolled back those regulations for many banks.[25] Under President Trump attacks on federal agencies have increased along with cutbacks in federal spending. One focus has been to destroy the Obama administration’s Affordable Care Act.[26] The Trump administration’s rationale was based on deregulation dogma that private healthcare providers could do a better job than a federal program. The cutbacks in spending for public health are having disastrous results in 2020.
Disenfranchisement of voters. The Kochs have demonized people of color and labor unions. They see them as supporters of big government, communism and the forces of regulation. They, therefore, used their money to curtail majority rule in the United States. The Kochs and their allies expanded spending on front groups through their tax-deductible foundations. They also supported the successful Citizens United decision upheld by the U.S. Supreme Court in 2010. Mayer says the result of the decision was “…as critics had warned, more and more of the money flooding into elections was spent by secretive nonprofit organizations that claimed the right to conceal their donors identities. Rich activists such as Scaife [27] and the Kochs had already paved the way to weaponize philanthropy. Now they and other allied donors gave what came to be called dark money to nonprofit “social welfare” groups that claimed the right to spend on elections without disclosing their donors. As a result, the American political system became awash in unlimited, untraceable cash. In striking down the existing campaign -finance laws, the courts eviscerated a century of reform.”[28] Coincidentally or not, in 2010 Republicans took control of the House of Representatives and in 2014 Republicans took control of the U.S. Senate. In 2016, Donald Trump was elected president of the United States despite losing the popular vote to Hilary Clinton by 2.9 million votes. Trump’s victory over Clinton was achieved by an elitist, outmoded and anti-democratic U.S. Electoral College originally designed to protect the interests of slave-owning states that might not be able to achieve a majority vote. The result was what the Kochs and their allies desired: the minority ruled the majority…As Mayer writes, it might be Donald Trump in the White House, but it was the Kochs and a small group of billionaire families that got him there and provided the blueprint for radical change.
Koch Family Patriarch Builds Fortune Thanks To Contracts From Stalin’s Russia and Hitler’s Germany
Mayer describes the origins of the Koch family wealth based on the acumen of Koch family patriarch Fred Koch, an engineer who made his money selling a new technology for the refining of oil into gasoline during the 1920s and 1930s.
The technology doubled the yield of producing gas as opposed to older technologies and helped build a sizable business in the Southwest of the United States. Unfortunately, the technology appears to have been acquired from another company without its agreement.
In another biography of the Koch family, Sons of Wichita, by Daniel Shulman the author describes how in 1934 Fred Koch’s company Winkler-Koch was successfully sued for using another company’s refining technology as its own without permission. The patents on the technology belonged to a company called Universal Oil Products, where Koch’s partner Lewis Winkler worked before becoming a partner in their company Winkler-Koch. Universal’s patents were the basis for the prevailing oil refining technology in the United States. In 1929, with the looming threat of being sued by Universal and losing their case due to patent infringement, Winkler-Koch found two customers who might be less susceptible to a Universal legal complaint in a U.S. court. The two customers were found in Joseph Stalin’s Russia and in Adolph Hitler’s Germany: [29]
“The last place Fred Koch expected to be on his 30th birthday was deep in the Russian Caucasus… But the toll that the Universal Oil Products battle took on Winkler-Koch’s revenues had pushed Fred and his partner out of the United States and into the welcoming embrace of Joseph Stalin’s Soviet Union.”[30]
In 1929, Koch’s company contracted with the Soviet Union’s trading company, Amtorg, to build 15 oil cracking stills at refineries in the Soviet Union for $5 million. Stalin was desperately attempting to modernize the Soviet economy. Koch was able to win the contract offering to provide oil refining technology that the Soviets believed would be uncomplicated to replicate. So, Koch helped build modern oil refineries in the Soviet Union in the 1930s. Later, Koch appears to have become to feel guilty about doing business with a company whose national leader was a mass-murderer. He returned from the Soviet Union complaining bitterly about the repression and brutality of the Communists in Russia and vowing not to tolerate that sort of behavior in the United States.[31]
Koch would become an anti-communist crusader warning about the threat posed by labor unions and people of color in subverting the free market values of the United States. In the 1950s, he became one of the early supporters of the extremist John Birch Society, which helped institutionalize his hatred of unions, minorities and government activities that did anything beyond assuring the process of supply and demand.
However, Koch’s guilt about working with oppressive communists did not extend to oppressive Nazis who had already begun taking the first steps toward massacring Jews and other opponents. After completing his work in Stalin’s Russia, Winkler-Koch, set out to help build a refinery for the German air force in Hitler’s Germany.
Mayer writes that in 1934 Winkler-Koch helped Nazi Germany build a massive oil refinery on the Elbe River near Hamburg. The refinery had the capacity to process 1,000 tons of crude oil per day, the third largest in the Third Reich. The refinery could “produce the high-octane gasoline needed to fuel fighter planes.”[32]
The refinery, which supplied the German Luftwaffe, was destroyed by American B-17 bombers in 1944. [33]
Fred Koch appears to have been deeply moved by his experiences in Hitler’s Germany. In 1938, he wrote that “Although nobody agrees with me, I am of the opinion that the only sound countries in the world are Germany, Italy and Japan.”[34]
He was enamored enough of the German way of life to hire a German governess for his children. The governess was such a fervent Nazi that when France fell in 1940, she resigned and returned to Germany. After that, Fred became the main disciplinarian, whipping his children with belts and tree branches.”[35]
Chronology Of The Kochs Rise To Power
The U.K Guardian’s review of Mayer’s book summarizes the progression of the Koch family:
- Twenty years after collaborating with the Nazis, Fred Koch had lost none of his taste for extremism. In 1958, he was one of the 11 original members of the John Birch Society, an organization which accused scores of prominent Americans, including President Dwight Eisenhower, of communist sympathies.
- In 1960, Koch wrote: “The colored man looms large in the Communist plan to take over America.” He strongly supported the movement to impeach Chief Justice Earl Warren, after the U.S. Supreme Court voted to desegregate public schools in Brown v Board of Education. His sons became Birchers too, although Charles was more enamored of “antigovernment economic writers” than communist conspiracies.
- After their father died, Charles and David built their father’s company into the second largest privately held corporation in America.
- “As their fortunes grew, Charles and David Koch became the primary underwriters of hard line libertarian politics in America,” Mayer writes. Charles’s goal was to “tear the government out ‘at the root’.”
- In 1971, corporate lawyer (and future Supreme Court Justice) Lewis Powell wrote a 5,000-word memo that was a blueprint for a broad attack on the liberal establishment. The real enemies, Powell wrote, “were the college campus, the pulpit, the media, the intellectual and literary journals, the arts and sciences”, and “politicians”. He argued that conservatives should control the political debate at its source by demanding “balance” in textbooks, television shows and news coverage – themes that were echoed in inflammatory speeches by Richard Nixon’s vice-president, Spiro Agnew.
- The war on liberals was so effective that practically everyone reacted to it: from the New York Times, which hired ex-Nixon speechwriter Bill Safire to “balance” its op-ed page, to the Ford Foundation, which gave $300,000 to the American Enterprise Institute (AEI) in 1972. The impact was cumulative: almost four decades later, Barack Obama was astonished by one of the first questions asked to him, by a New York Times reporter, after he became president: “Are you a socialist?”
- The AEI was one of dozens of the think tanks bankrolled by hundreds of millions from the Kochs and their allies. Sold to the public as quasi-scholarly organizations, their real function was to legitimize the right to pollute for oil, gas and coal companies, and to argue for ever more tax cuts for the people who created them. Richard Scaife, an heir to the Mellon fortune, gave $23m over 23 years to the Heritage Foundation, after having been the largest single donor to AEI.
- Next, the Koch and their allies turned their sights on American campuses and the courts. In 1973, the Environmental Protection Agency cited the Olin Corporation for its record of pollution. The company had released DDT pollutants at its Alabama plant. The company was also cited for mercury dumping from its Saltville, Virginia plant and for sickening residents, causing birth defects and leading to the Olin plant shutdown in 1972. Olin was also cited for dumping mercury into the Niagara River in upstate New York. Three Olin company officials were found guilty of falsifying records related to the mercury dumping.[36] John M Oiln, the chairman of Olin founded the Olin Foundation. Its executives deny the Foundation was used for Olin’s political agenda, but he became a crusader against government regulations, liberal judges and making universities more amendable to deregulation priorities. The Olin Foundation spent nearly $200m promoting “free-market ideology and other conservative ideas on the country’s campuses.” In 1977, William Simon former Treasury Secretary under Presidents Nixon and Bush became Olin Foundation president and proclaimed the need to confront government regulations, that challenged free market forces backed by elitist academics and bureaucrats. Olin died in 1982, but the Olin Foundation remained active. The Olin Foundation bankrolled a whole new radical approach to jurisprudence called “Law and Economics” to combat court decisions finding in favor of racial, gender, consumer, labor safety, environmental and labor rights. Mayer explains: ”Law and Economics stresses the need to analyze laws, including government regulations, not just for their fairness but also for their economic impact.”[37] Mayer notes that between 2008-2012, “close to” 185 federal judges attended seminars discussing law and economics. The seminars for judges were initiated by Henry Manne, dean of the George Mason University School of Law in Virginia.[38] Beginning in the 1970s, the Olin Foundation supported Manne, who was “an acolyte” of the University of Chicago School of economics, a leading advocate for de-regulation. [39] There, University of Chicago economist Milton Friedman was one of the most prominent advocate of anti-federalist economics. The seminars were often held at luxurious resorts. One topic was whether insider trading regulations actually did more harm than good, because they prevented the exercise of free enterprise. Underwriters of these seminars included: Exxon-Mobil, Shell Oil, Pfizer, State Farm, the insurance company and the Charles Koch Foundation.[40] The Olin Foundation gave $18m to Harvard University establishing the John Olin Center for Law Economics and Business at Harvard Law School. After Harvard approved Law and Economics, others followed. By 1990 nearly eighty law schools taught the subject.[41]
- The amount of money spent by the billionaires and their allies has been staggering. Between 2005 and 2008, the Kochs alone spent nearly $25m on organizations fighting climate reform. One study by a Drexel University professor found 140 conservative foundations had spent $558m over seven years fighting climate change reform. Thus, the abrogation of the 2015 Paris climate change agreement by President Trump represented the triumph of U.S. fossil fuel producers with potentially global implications. Time will tell whether abrogating anti-global warming and regulations and agreements will result in an environmental Covid-19 event.
- The next step for the radical right was to support the creation of the Tea Party movement, through organizations like Americans for Prosperity, which was funded by the Kochs. “The Heritage Foundation, the Cato Institute and Americans for Prosperity provided speakers, talking points, press releases, transportation, and other logistical support,” Mayer writes. As the writer Thomas Frank has pointed out, the genius of this strategy was to “turn corporate self-interest into a movement among people on the streets”.
- The last element of this multi-pronged campaign saw the direct investment of hundreds of millions of dollars in political campaigns at every level, from president to city council by the billionaires and their allies. The campaign helped erase virtually all U.S. regulation of campaign contributions resulting in the radical right’s victory with the U.S. Supreme Court’s Citizens United decision.[42]
Conclusion: Koch /Trump Anti-Federalism Prompts Rebellion
In her book, Mayer describes how by 2016, the anti-federalist movement that Koch and other billionaires had established would help propel Donald Trump’s election to the White House. Donald Trump may not have been the Koch brother’s candidate but during his time in office, he has imposed the billionaires anti-federalist policies on the United States.
By 2020 with the onset of the Covid-19 virus and the subsequent recession, the impact of Koch-inspired anti-government policies inspired Trump administration attacks against public health, the CDC, the IRS and the SBA.
Anti-federalism has made a bad situation worse and brought the United States to the brink of disaster.
The good news is there is a growing rebellion against years of attacks on government by billionaires and their allies as the failure of the Trump administration’s pandemic response places more American lives at risk.
Americans are seeing that governors, nurses, scientists, public health officials and federal, state and local employees can fight to prevent the spread of pandemic. Federal employees can also administer financial aid programs to help or save small businesses, and can distribute funds to help people who have lost their jobs and businesses.
These include federal employees at the Department of Health and Human Services, the Centers for Disease Control, the U.S. Army Corps of Engineers, the U.S. Coast Guard, U.S. Customs, the Internal Revenue Service, the Small Business Administration, the Federal Emergency Management Agency (FEMA) and many others.
Americans are demonstrating this public spirit in spite of the efforts by President Donald Trump to impede them.
FOOTNOTES
[1] Jane Mayer, Dark Money, p. xviii
[2] https://www.cnn.com/2020/04/07/politics/modly-resign-crozier-esper-trump/index.html
[3] https://www.whitehouse.gov/briefings-statements/remarks-president-trump-vice-president-pence-members-coronavirus-task-force-press-briefing-6/
[4] https://thehill.com/homenews/administration/492837-trump-eases-back-on-asserting-power-over-governors-on-reopening
[5] https://en.wikipedia.org/wiki/Charles_Koch
[6] https://www.forbes.com/real-time-billionaires/#62a10a3d3d78
[7] Jane Mayer, Dark Money, p. xviii
[8]Trust for America’s Health, The Impact of Chronic Underfunding on America’s Public Health System: Trends, Risks, and Recommendations, 2019, p.4 see: https://www.tfah.org/report-details/2019-funding-report/
[9] https://www.pressdemocrat.com/opinion/10877018-181/balmes-shortage-of-masks-is?sba=AAS
[10] https://www.nytimes.com/2019/12/28/climate/trump-administration-war-on-science.html?login=email&auth=login-email
[11] https://www.reuters.com/article/us-health-coronavirus-usa-irs-explainer/explainer-hobbled-irs-tax-agency-may-need-months-to-put-cash-into-americans-hands-idUSKBN2190GK
[12] https://www.washingtonpost.com/politics/coming-to-your-1200-relief-check-donald-j-trumps-name/2020/04/14/071016c2-7e82-11ea-8013-1b6da0e4a2b7_story.html
[13] https://www.nytimes.com/2020/04/07/business/coronavirus-ppp-small-business-aid.html
[14] https://thehill.com/policy/finance/492919-small-business-loan-program-runs-out-of-funds-amid-debate-over-new-bill
[15] Mayer, p.111
[16] Mayer, p.108
[17] Mayer, 107
[18] Ibid., p.55-56
[19] https://www.bloomberg.com/opinion/articles/2018-09-06/government-spending-hits-a-striking-new-low
[20] Mayer, p.106
[21] “The Savings and Loan Crisis was the most significant bank collapse since the Great Depression of 1929. By 1989, more than 1,000 of the nation’s savings and loans had failed.
The crisis cost $160 billion. Taxpayers paid $132 billion, and the S&L industry paid the rest. The Federal Savings and Loan Insurance Corporation paid $20 billion to depositors of failed S&Ls before it went bankrupt. More than 500 S&Ls were insured by state-run funds. Their failures cost $185 million before they collapsed.”— https://www.thebalance.com/savings-and-loans-crisis-causes-cost-3306035
[22] Ibid.
[23] https://en.wikipedia.org/wiki/Aftermath_of_the_repeal_of_the_Glass%E2%80%93Steagall_Act
[24] The Great Recession began well before 2008. The first signs came in 2006 when housing prices began falling. By August 2007, the Federal Reserve responded to the subprime mortgage crisis by adding $24 billion in liquidity to the banking system. By September 2008, Congress approved a $700 billion bank bailout, now known as the Troubled Asset Relief Program. By February 2009, Obama proposed the $787 billion economic stimulus package, which helped avert a global depression.- https://www.thebalance.com/the-great-recession-of-2008-explanation-with-dates-4056832
[25] https://www.nytimes.com/2018/05/22/business/congress-passes-dodd-frank-rollback-for-smaller-banks.html :“A decade after the global financial crisis tipped the United States into a recession, Congress agreed on Tuesday to free thousands of small and medium-sized banks from strict rules that had been enacted as part of the 2010 Dodd-Frank law to prevent another meltdown.
In a rare demonstration of bipartisanship, the House voted 258-159 to approve a regulatory rollback that passed the Senate this year, handing a significant victory to President Trump, who has promised to “do a big number on Dodd-Frank.”
The bill stops far short of unwinding the toughened regulatory regime put in place to prevent the nation’s biggest banks from engaging in risky behavior, but it represents a substantial watering down of Obama-era rules governing a large swath of the banking system. The legislation will leave fewer than 10 big banks in the United States subject to stricter federal oversight, freeing thousands of banks with less than $250 billion in assets from a post-crisis crackdown that they have long complained is too onerous.
Republican lawmakers and the banking industry cheered a measure they said would help unshackle banks — and the economy — from regulatory burdens.”
[26] https://www.npr.org/sections/health-shots/2019/10/14/768731628/trump-is-trying-hard-to-thwart-obamacare-hows-that-going
[27] “Richard M. Scaife, an heir to the Mellon fortune who became one of America’s leading funders of conservative causes and the publisher of the Tribune-Review, died Friday morning. He was 82.
A shy, even reclusive, man who was both among the biggest benefactors and biggest enemies of U.S. presidents, Mr. Scaife was one of the few Western Pennsylvanians to end up on the annual Forbes list of wealthiest Americans. The magazine last year estimated the Shadyside resident’s worth at $1.4 billion…”- https://www.post-gazette.com/news/obituaries/2014/07/04/Tribune-Review-publisher-Scaife-dies/stories/201407040150
[28] Mayer, p.281
[29] Daniel Schulman, Sons of Wichita: How the Koch Brothers Became America’s Most Powerful and Private Dynasty, pp 27-39
[30] Schulman p.35
[31] Ibid, pp.37-39
[32] Mayer, pp.35-36
[33] Mayer, p.38
[34] Mayer, p.37
[35] Mayer, pp. 39-41
[36] Mayer, pp 116-121
[37] Mayer, p. 131
[38] Mayer, p. 133
[39] Mayer, p. 132
[40] Mayer, p. 134
[41] Mayer, p. 133
[42] Ibid