In 1916, John D. Rockefeller became the world’s first confirmed billionaire. One hundred years later the United States alone has 540 billionaires with a net worth of roughly $7 trillion dollars. That is about 10% of the entire US net worth. There are another 1270 known billionaires in the world, most of whom have extensive dealings in the US. Carlos Slim, for example, owns the American media by owning the New York Times. He may not be able to donate to campaigns, but he can get involved in other ways.

That is, in fact, how billionaires do politics. Giving directly to a candidate is not worth a whole lot to a rich guy due to caps on contributions. Even bundling contributions by getting all of your rich buddies and employees to give to a candidate is just a drop in the bucket to a modern campaign. The real impact is in funding the Super-PAC. A rich guy can give as much as he likes, without a lot of scrutiny from the press or regulators. In this election, just 50 billionaires are responsible for 50% of super-PAC spending.

The problem this creates for the political class is two-fold. If you are an ambitious politician, a Paul Ryan for example, you need to win elections and that means not making any enemies that can cause you trouble. The enemies that can cause you trouble are those who can finance a primary challenger to you in the next election. That means toadying up to the big spenders in politics, even if it means screwing your own voters.

The flip side of this is the fact that the technological revolution has made all of this public. Worse yet, it has made it possible for a challenger to use it against you via social media and internet campaigns. Paul Nehlen is not a well funded or well known candidate, but he is going to force Ryan to run a real campaign this summer. Big shots from the insurgency are flying in to help Nehlen simply to spite Paul Ryan.

The reason is people all over the country, via the miracle of the internet, can see that Ryan is a sellout so Nehlen is getting lots of help in his campaign. None of this would be happening if Ryan were relying on local funding for his campaigns. He would be tending to that knitting instead of ball washing the Koch Brothers at swank Washington DC restaurants. Instead, the third most powerful politician in DC is in primary fight.

The irony is that the technological revolution that created the donor class has also made it easier to spot a politician that is selling his vote. Thirty years ago, a Tom Daschle could be a conservative Democrat at home in South Dakota but vote with Ted Kennedy in Washington. He could do this while his wife made a tidy living as a Washington lobbyist. It was a nice grift, even though it was small time. The money is much bigger today, but it is all out in the open.

To their credit, many politicians have understood the dilemma and sought to mitigate it. Campaign finance reform was an effort to solve the problem, but the Citizens United case turned the virtues of campaign finance reform into a vice. The politicians have lost control of their own reelection efforts as they are now run by outside groups. The modern politician does little other than give speeches to curry favor with the donor class.

It is an interesting dilemma for Congressman and Senators in that the strategy they often use on the middle class has now been turned on them. The game of “top and bottom versus the middle” has been standard politics in America for generations. Now it is being used in Washington. You either piss off the Wilks Brothers or you piss off your voters. In the modern age, it is an impossible dilemma.

Of course, another aspect to this is the brain drain. It used to be that a gifted political talent sought elected office. Today, the big money is in running super-PAC operations, fund raising operations and policy shops. That is where the talent goes, leaving feckless grifters like Ben Sasse to be the bright stars of the GOP. The massive void of political talent in both parties is due to the fact the political talent is in the shadow campaign system.

I have pointed out previously that the non-profit rackets have become an enormous problem in American politics. One remedy is to pull the plug on the tax provisions that allow donors to deduct their donations. That draws down money flowing into these things. Another way, one that would have to apply to super-PAC operations, is to have full disclosure of all donors and the amount of their contribution.

This exists to some degree with contributions to parties and candidates. Extending this out to super-PAC and think tank contributors would most likely have the same effect it had on campaign spending, which is to diversify the donor base. This would also mean disclosing all salary data. It is the opacity of these operations that makes them so effective so letting the sunlight in would level things up a bit. It is not a perfect solution, but it is something they could pass and something the courts would accept.

A lot of people reading this will be horrified because they have been conditioned by the libertarian cult to worship rich people. There is a huge difference between the guy who gets rich building a better mousetrap and the the modern financial buccaneers riding the waves of credit money in the global economy. The former has a stake in his people and society. The latter sees every port as a chance for booty.

Even so, rich people will always be with us, but the concentration of wealth is not healthy for self-government. The Founders understood this which is why they designed a system to make it hard to concentrate power and in the current age, money is power. Having 0.0002% of the population controlling 10% of the nation’s net worth is destabilizing. Having fifty guys running the national politics of three hundred million is insane.