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stephen schwarzman
RFK Jr’s Housing Policy Gives Republican Mega-Donor a Pass
If Kennedy was serious about combating the rise of corporate homeownership—or the perception that he’s a de facto Republican candidate, for that matter—he would call out Blackstone’s nefarious influence by name.
Nov 29, 2023
At a time when working Americans struggle to make ends meet on multiple fronts, one cost-of-living crisis stands out as particularly dire: the national housing crisis. In our largest cities, decades of systemic underbuilding—de facto mandated by bans on multifamily housing—have made housing a nightmare for longtime residents and newcomers alike. But the housing crisis extends well past New York and San Francisco: Extreme inequality and poor monetary policy have made it difficult to rent and own homes across much of rural and suburban America. The crisis has been exacerbated by the rise of corporate home ownership, which has put housing security further out of reach for working Americans.
Since launching his quixotic presidential candidacy, Robert F. Kennedy Jr. has made the issue of corporate homeownership central to his campaign. On the campaign trail, Kennedy has notably criticized investment firms BlackRock, Vanguard, and State Street by name, arguing they will someday be able to “outbid your children.” But interestingly, Kennedy’s railing against corporate homeownership has not extended to the firm that best embodies the encroachment of finance into housing: Blackstone.
It’s unlikely Kennedy’s hands-off approach to Blackstone is a coincidence. Since originally entering the race as a reactionary candidate running in a Democratic primary, Kennedy has been accused of being a Republican plant. Given that Blackstone CEO Stephen Schwarzman is a Donald Trump-loving Republican mega-donor, it’s pretty easy to connect the dots on Kennedy’s rhetorical silence. In the 2022 cycle alone, Schwarzman gave over $35 million to congressional Republican campaigns. If Kennedy was serious about combating the rise of corporate homeownership—or the perception that he’s a de facto Republican candidate, for that matter—he would call out Blackstone’s nefarious influence by name.
With prospects for homeownership in coastal metropolitan areas increasingly unrealistic for middle-class Americans, Blackstone and other private investors’ push into the Sunbelt threatens remaining opportunities for homeownership.
It’s a shame, really, because at a time when Blackstone is pushing even deeper into the housing market, it would be useful to call attention to the company’s detrimental impact. The time of Blackstone being content with its status as a commercial real estate giant is long gone. Since the financial crisis, the company has established a strong presence in everything from predatory rent-to-own schemes to student housing. Blackstone’s seemingly insatiable quest for dominance in the rental home market has been met with criticism in and outside the United States.
Blackstone’s early push into housing occurred in the aftermath of the subprime mortgage crisis, when it profited handsomely off home foreclosures. Like other major institutional investors that have pushed into housing, Blackstone has taken advantage of strict zoning laws that constrain the development of new housing. Invitation Homes, owned by Blackstone from 2012 to 2019, even acknowledged in an SEC filing that it invests “in markets that we expect will exhibit lower new supply.”
At a time when home prices in key markets continue to skyrocket, Blackstone and similar firms have caused further pain by accelerating the corporatization of U.S. homeownership. In America’s Sun Belt, a macroregion known for relatively affordable middle- and working-class housing opportunities, private investors’ impact has been particularly dire. By one metric, over a third of homes bought in markets including Atlanta, Phoenix, and Charlotte were made by corporate investors in the first quarter of 2021.
With prospects for homeownership in coastal metropolitan areas increasingly unrealistic for middle-class Americans, Blackstone and other private investors’ push into the Sunbelt threatens remaining opportunities for homeownership. Given the evidence that corporate homeownership efforts disproportionately target housing stock in Black-majority neighborhoods, these schemes threaten to further exacerbate the racial wealth gap.
As negative headlines surrounding Blackstone’s housing push mount, it’s no surprise that the company has desperately tried to reclaim the narrative in its favor. Blackstone has aggressively touted Home Partners of America, a rent-to-own company acquired in 2021, as a service to help tenants eventually own their own properties. Given that around 85% of renters of single-family homes by one estimate wouldn’t qualify for a mortgage, it’s not hard to see the program’s appeal.
But rather than giving renters a shot at the American dream, tenants in Home Partners’ properties have faced nightmarish housing conditions, made worse by high prices and predatory contract terms. Even worse, this has often been accompanied by harm to tenants’ credit scores, putting the dream of homeownership even further out of their reach.
The harm caused by Blackstone’s efforts to dominate rental housing extends beyond tenants and prospective homebuyers. First launched in 2017, the Blackstone Real Estate Income Trust (BREIT) has come under fire by regulators for its unconventional, if shady, investment structure. Funded largely through borrowed money—BREIT “invests with roughly 50% borrowed money” with a focus on rental apartments in Sunbelt communities, perThe Wall Street Journal—BREIT’s limits on redemptions amid investor discontent has caught the ire of the SEC.
It’s not hard to see why: A trust that aggressively limits withdrawals in the face of investor discontent should not be trusted to continue its expansion in one of the country’s most crucial economic sectors. In a congressional testimony earlier this year, Duke law professor Gina-Gail S. Fletcher compared BREIT’s unethical practices to that of FTX, the notorious crypto hedge fund founded by Sam Bankman-Fried.
Given that Republicans were only able to capture the House by the narrowest of margins in 2022, it’s easy to make the case that Blackstone CEO Schwarzman’s millions played a decisive role. Amid the Republican-induced chaos of the 118th Congress in the House, party lawmakers have pushed hard for policies that would make the housing crisis even worse. This includes Republicans’ push for cuts to housing assistance and efforts to sabotage the Consumer Financial Protection Bureau (CFPB), a federal agency that has fought hard for tenants. While Kennedy has cried foul about supposedly disproportionate media criticism of his campaign, his silence on Blackstone is yet another mark against taking him seriously as a candidate.
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Why Billionaires Hate Social Security
The real goal of billionaire-funded Social Security rhetoric is to prevent the public from drawing a connection between Social Security’s finances, the working-class retirement crisis, and the ludicrous amounts of wealth held by America’s billionaires.
Jun 08, 2023
Consider the billionaire.
I’m not talking about people who were born into wealth; they have their own issues. Let us specifically consider the so-called “self-made” wealthy person, the driven CEO or investor. He (and it is almost always a “he” in our society) is likely to share some characteristics with other billionaires and members of his cohort. Social science and simple observation tell us that these powerful figures are more likely than other people to be:
●addicted to making money (which is psychologically distinct from greed)
●obsessed with making money, which leads to bad behavior
●surprisingly worried about the money they have
●less empathetic and more self-interested than other people
●breakers of certain laws and social norms
●less charitable on a percentage basis
●and, determined to cut Social Security.
About that last item: While there may be exceptions here and there, the billionaire class overall is overwhelmingly opposed to Social Security. Most wealthy people would, in fact, like to see its benefits slashed. A 2013 study compared the political opinions of the wealthy with those of voters as a whole and found “major disagreement” between the two groups regarding Social Security. Among all voters, there was a 46 percent gap in favor of expanding its benefits rather than cutting them. The wealthy had the opposite take; they favored cuts, rather than expansion, by a gap of 33 percent.
The tax question surely accounts for some of the billionaires’ antipathy toward Social Security but, even so, their feelings seem to run unusually high on the subject.
Strikingly, the richer someone was, the likelier they were to want Social Security cuts. Each additional $10 million in personal wealth added measurably to the desire for Social Security cuts. The authors note that “this finding may help explain why cutting these popular programs has remained on the political agenda.”
Ya thinks?
Billionaires pay for think tanks and news outlets which fill the airways with lurid talk about the program’s costs. Billionaires and corporate CEOS have more political influence than any other part of society. That’s why, despite the outcome of the recent ‘debt ceiling’ crisis, they still represent an existential threat to Social Security.
Distraction
The real goal of billionaire-funded Social Security rhetoric is to prevent the public from drawing a connection between Social Security’s finances, the working-class retirement crisis, and the ludicrous amounts of wealth held by America’s billionaires.
We are supposed to be horrified, for example, by the gap between Social Security’s income ($1.244 trillion for this year) and its cash outlays ($1.237 trillion). We are not supposed to notice that Michael Bloomberg’s wealth gain since September of last year ($17.7 billion*) would cover almost the entire 2023 shortfall of $22 billion all by itself, or that the entire amount could be recouped by throwing in Bill Gates’ gains during the same period.
That’s right: the nine-month income of two billionaires alone would erase Social Security’s entire actuarial imbalance for a full year. (And 2022 was a bad year for billionaires; “bad,” of course, being a very relative term.)
A trillion-plus dollars sounds like a lot of money, and it is. But the personal wealth of just ten Americans would cover Social Security’s entire budget for an entire year. Not that it would, at least under current law. The law dictates that Social Security’s costs be covered by a payroll tax levied for that purpose alone. But a wealth tax, or something like it, could be a popular option if the program faces a real funding crisis.
There are already sound proposals to “scrap the cap” on income that is taxed for Social Security, and to include investment and other sources of income in that tax. Billionaires would face a tax hike under these proposals, although their total taxes would still be well below mid-20th century norms.
The tax question surely accounts for some of the billionaires’ antipathy toward Social Security but, even so, their feelings seem to run unusually high on the subject.
What They Say
The billionaires’ vituperation toward Social Security can be seen in Elon Musk’s ill-informed tweet about it (which The Intercept’s Jon Schwarz ably dissected). It can be found in CEO conclaves like “Fix the Debt,” where the heads of corporations like JetBlue, Bridgestone, and Microsoft, as well as government largesse recipients like Honeywell, GE, Boeing, Bank of America, and Goldman Sachs assembled to attack programs “entitlements.”
It oozes through op-eds like this one from predatory billionaire Steve Schwarzman, who magnanimously promised to “share the pain” of financial sacrifice with elderly Social Security recipients living on a few hundred dollars a month. (5.5 million seniors reportedly faced food insecurity in 2021; Schwarzman “took home a record $1.27 billion for 2022”.)
The goal is to frame Social Security cuts in false, technocratic terms as the inevitable outcome of simple arithmetic. They want it to look as if the decision to cut benefits made itself. That way, they leave no fingerprints on the corpse of retirement security.
It’s reflected in Mitt Romney’s bitter words at a 2012 fundraiser, when he told a roomful of fellow rich people that “they”—it’s always “they,” not “us”—"they believe the government has a responsibility to care for them, that they are entitled: to health care, to food, to housing, you name it.”
Added Romney, “That's an entitlement."
Most of all, it can be seen in works of the late billionaire Peter G. Peterson, a conservative hedge funder and former Nixon cabinet member who lavished money on politicians from both parties in pursuit of his curious obsession: to reduce government spending, with a special focus on cuts to Social Security and Medicare. The foundation, astroturf groups, and think tanks Peterson created have worked for decades to elevate the national debt above all other policymaking concerns, regardless of the effect on working Americans, with a special focus on cuts to Social Security and Medicare.
The goal is to frame Social Security cuts in false, technocratic terms as the inevitable outcome of simple arithmetic. They want it to look as if the decision to cut benefits made itself. That way, they leave no fingerprints on the corpse of retirement security.
Why They Hate
But why? Why do the ultra-wealthy hate Social Security so much? It’s not just self-interest, although there is certainly that. The answer lies in the anthropology, as well as the accountancy, of the billionaire class. Social Security represents everything the typical billionaire loathes, including community, solidarity, and the empowerment of the working class.
Social Security isn’t charity, and that galls them. Social Security is run for working people – people who know they have earned those benefits.
Billionaire CEOs belong to a group whose membership is earned through obsession, greed, competitiveness, and lack of empathy. It is a population self-selected for sociopathy and work-life imbalance. It’s hard to make a billion dollars without cheating people, and it’s hard to cheat people when you see them – really see them, through the eyes of understanding and emotion. That’s why someone like Schwarzman can equate his own “sacrifice” (of what, a fifth or sixth yacht?) with the suffering of an ailing grandmother trying to get by on $75 per week.
It's impossible to bargain with them by telling them they already have enough money to live like an emperor. At that level, money works the way social media likes work for some other people: it doesn’t affect their lives in any material way, but it boosts their sense of worth and validation. That’s why they’ll never quit. That’s why they’ll never say, “I have enough.” There is always someone else who is gaining on them every time they stop to eat, sleep, make love, express an emotion ...
Sure, they’ll write a check to charity from time to time. That’s good for the ego. It brings applause, praise, black-tie dinners, and fawning requests for more money. But Social Security isn’t charity, and that galls them. Social Security is run for working people – people who know they have earned those benefits. Pay a tax, with no effusive speeches or stroking of the ego for America’s 0.001 percent? The idea offends their sense of self-importance.
This is why they love to hear politicians like Alan Simpson insult Social Security recipients by calling them “greedy geezers.” They think they’ve won life’s race. People who have lived other kinds of lives – filled, perhaps, with love and kindness rather than competition and exploitation – are losers to them. In their minds, people like that are nothing. For them to ask anything of the wealthy is, well, impudence.
Controlling the Discourse
Unfortunately, the billionaire class increasingly controls US news outlets. Their obsession has warped the national discourse for decades. It has wormed its way into the media ecosystem, as billionaire-funded think tanks, lobbying groups, and politicians flood the airwaves and newspapers with false talking points about the “unaffordability” of such programs. “Both Medicare and Social Security are going broke and taking a larger share of the budget in the process,” ABC’s Martha Raddatz once told the national audience for a vice presidential debate. (Neither half of that statement is true.)
Their obsession is reflected in a news industry that has been increasingly centralized under billionaire control. Media elites sometimes sounded like jilted lovers when they reported that neither party pushed for Social Security or Medicare cuts in the debt ceiling deal.
The Washington Post, which often channels billionaire views on Social Security, ran a must-read article under the headline, “How a billionaires boys’ club came to dominate the public square.” As Michael Scherer and Sarah Ellison note,
“Technological change and the fortunes it created have given a vanishingly small club of massively wealthy individuals the ability to play arbiter, moderator and bankroller of not only the information that feeds the nation’s discourse but also the architecture that undergirds it.”
The billionaires’ obsession is also reflected at non-profit outlets like NPR—which, despite the word “public” in its name, relies heavily on corporate and billionaire donors for survival.
Dialing for Dollars
What the billionaires say, usually goes. “... (E)conomic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy,” a 2014 study found, “while average citizens and mass-based interest groups have little or no independent influence.”
Things have only gotten worse since then. Billionaires poured nearly $1 billion ($881,000,000) into the last round of congressional elections. How does this affect policy? Politicians who carry out the wishes of billionaires, corporate CEOs, and lobbyists raise more money, of course. But there is also a process of acculturation, where elected officials become so steeped in the world of elite consensus that they come to believe in it themselves.
Consider, for example, the infamous slide deck which advised incoming Congressional Democrats to spend four hours a day on “call time” and one hour per day on “strategic outreach,” both of which involve raising money for their next campaign. Imagine spending four to five hours a day calling people who despise Social Security, and it soon becomes clear that only a miracle has protected Social Security so far—and miracles don’t last forever.
It would be a mistake to assume that the recent “debt ceiling deal” means that Social Security is safe.
Unless you’re a candidate with mass support like Bernie Sanders, campaign fundraising requires constant immersion in the anti-Social Security mindset of the ultra-wealthy—which, when combined with the GOP’s longstanding hostility to the program, means that the people who make our laws are steeped in a worldview that considers “entitlement programs” expensive and superfluous.
That’s why it would be a mistake to assume that the recent “debt ceiling deal” means that Social Security is safe. Neither party wanted to take the unpopular step of calling for benefit cuts in this round of negotiations. But the billionaires and corporations who drive our political system won’t stop trying. That’s how they got where they are; by persisting until they win.
Previous attempts to cut Social Security have come in the form of ‘bipartisan commissions’ whose role was to obscure the process and shield both parties from blame. (Mitt Romney’s TRUST Act would follow the same playbook, as would other billionaire-backed proposals.) The White House has correctly called these commissions “death panels,” which may be one reason why billionaires primarily contributed to Republican candidates in the last election cycle. But public opinion must be mobilized to prevent any further softening of President Biden’s position on Social Security, before the billionaires let their money do the talking in the 2024 race.
Because, when it comes to money in politics, Bob Dylan’s words hold true: money doesn’t talk, it swears.
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Just 27 Billionaires Have Spent $90 Million to Buy GOP Congress: Report
"They're counting on that 'small' investment in anti-tax Republicans to save them billions in taxes," said Americans for Tax Fairness, which conducted the analysis.
Jul 18, 2022
A few dozen billionaires are spending tens of millions of dollars on the 2022 midterm elections--mostly to support Republican candidates, including many who have parroted the dangerous lie that the 2020 presidential election was stolen--in a bid to ensure that Congress is full of lawmakers willing "to make their wealthy benefactors even richer," according to a fresh analysis.
"What's good for billionaires--including cutting taxes on the rich and corporations--is bad for working families."
Titled Billionaires Buying Elections, the report from Americans for Tax Fairness (ATF) details how "billionaires are increasingly using their personal fortunes and the profits of connected corporations to drown out regular voters' voices and elect hand-picked candidates who further rig the nation's economy--especially the tax system."
A pair of super PACs tasked with securing Republican majorities in the House and Senate--the Congressional Leadership Fund (CLF) and the Senate Leadership Fund (SLF)--raised a combined $188.3 million through the first 16 months of the 2022 campaign cycle, according to ATF. Nearly half--$89.4 million, or 48%--came from just 27 billionaires. A whopping 86% of the GOP's billionaire money came from "Wall Street tycoons" who are arguably the biggest beneficiaries of glaring loopholes in the tax code.
The Democratic counterparts of those two super PACs--the House Majority PAC and the Senate Majority PAC--raised a combined $154 million over the same time period. A smaller share--$25.8 million, or 17%--came from 19 billionaires. A majority of billionaire contributions to Democratic candidates also came from the finance and investment sector (35%), but other industries were also well-represented, including cryptocurrency (26%), and tech (18%).
"Unlike candidates and party committees, super PACs can raise unlimited donations from individuals and corporations," ATF explained. "In return they are not supposed to coordinate activities with the campaigns they support but instead act independently, though that rule is often flouted."
Top billionaire donors to congressional super PACs include hedge fund magnate Ken Griffin, who has given more than $28.5 million to CLF and SLF, and private equity mogul Stephen Schwarzman, who has pumped $20 million into the GOP's two super PACs.
"Anti-democratic vote-buying," ATF wrote, "has been facilitated by--and is facilitating--the accelerating wealth growth of the billionaire class and the record profits of the corporations they own."
The combined net worth of the nation's roughly 750 billionaires surged by $2 trillion, or 70%, during the first two years of the Covid-19 pandemic. The collective wealth of the 27 billionaires bankrolling the GOP's super PACs alone soared by $82.4 billion over that time period, meaning that the $89.4 million they have donated to CLF and SLF constitutes less than 0.1% of their overall pandemic-era gains.
Meanwhile, the return on that modest investment could amount to billions of dollars if Republicans take back Congress in November and preserve their 2017 tax cuts or further slash taxes on superrich people and the corporations they own.
Over a recent nine-year period, the 400 wealthiest people in the U.S. paid an average effective federal income tax rate of just 8.2% when the increased value of their stock holdings is included in their income. That is a lower rate than the nationwide average of 13.3% in 2019.
As ATF explained, focusing on contributions to congressional super PACs fails "to capture the full political influence of billionaires, who in addition to personal donations also steer money to favored candidates from related corporations and organizations."
Billionaires are among the ultrawealthy Americans who control corporations through their extensive stock holdings. Many corporate giants have been distorting the upcoming midterms, ATF pointed out, by spending tens of millions to help GOP candidates who have vowed to defend special tax breaks for the top 1% get elected, including 144 far-right members of Congress who voted to overturn President Joe Biden's electoral victory.
According to the report, seven powerful corporations--AT&T, Chevron, ExxonMobil, FedEx, GM, Merck, and UPS--have collectively given nearly $1.5 million to dozens of election deniers and various Republican PACs and election committees this campaign cycle. The companies' demonstrated lack of concern for democracy, ATF noted, likely stems from their desire to keep dodging taxes. In 2021, these firms paid an average federal income tax rate of just 2.7% on a combined $78.4 billion in profits.
"We need to rein in billionaire political and economic power through campaign finance reforms and tax reforms such as a billionaires income tax."
Notably, Peter Thiel, the co-founder of PayPal who is worth about $5 billion and openly opposed to democracy, has been spending big on his preferred Republican candidates but not through the GOP's congressional super PACs.
Thiel "has so far spent almost $30 million through super PACs supporting the 2022 senatorial bids of two former employees who share his anti-democratic and anti-tax beliefs," ATF found. "J.D. Vance won the Ohio Republican U.S. Senate primary thanks in part to Thiel's $15 million in spending. Blake Masters has a fighting chance in Arizona's GOP U.S. Senate primary in August due to Thiel's $13.5 million in contributions."
Another source of "billionaire dominance of campaign financing, especially on the Republican side," wrote ATF, are so-called "dark money" groups, which are not required to disclose the identity of their donors. Some dark money groups--including Club for Growth, which has received $32 million from billionaire Wall Street trader Jeffrey Yass over the years--are "notorious for having bankrolled insurrectionist members of Congress" like Sen. Josh Hawley (R-Mo.) and Lauren Boebert (R-Colo.), ATF noted.
According to the report:
Politically active billionaire Charles Koch has not personally donated to either GOP super PAC this cycle, but his corporation--Koch Industries--has so far given them a total of $1.75 million.
Two of the biggest "dark money" groups, which do not disclose their donors, are essentially sister groups to the two congressional GOP super PACs. American Action Network gave at least $26 million to CLF in the 2020 cycle and $18.7 million so far this cycle. One Nation donated $77.5 million to SLF last cycle and has given $16.5 million so far this cycle.
The ability of the nation's wealthiest individuals to translate their disproportionate economic power into political clout has increased exponentially since the U.S. Supreme Court's 2010 Citizens United decision eliminated effective limits on campaign contributions.
\u201cBillionaires pumped $1.2 billion into the 2020 elections, almost 40x more than they did in 2010. In the 2020 election cycle, billionaires contributed nearly $1 out of every $10. #TaxBillionaires\u201d— Americans For Tax Fairness (@Americans For Tax Fairness) 1657716998
According to the report:
- Billionaires pumped $1.2 billion into the 2020 elections, almost 40 times more than the $31 million they donated in 2010, when the Citizens United rules were first in effect. In the 2020 election cycle, billionaires contributed nearly $1 out of every $10, while making up just 0.01% of all donors contributing more than $200.
- Billionaires donated almost $240 million to the combined campaign efforts of Donald Trump's two runs for president. Over half came from just one billionaire household, that of casino magnate Sheldon Adelson (who has since died).
"Billionaires, who are used to buying whatever they want, have increasingly dedicated their almost unlimited resources to buying American elections," Frank Clemente, executive director of ATF, said in a statement.
"The problem is what's good for billionaires--including cutting taxes on the rich and corporations--is bad for working families," said Clemente. "We need to rein in billionaire political and economic power through campaign finance reforms and tax reforms such as a billionaires income tax."
Several legislative proposals have emerged to tax the increased value of assets owned by the nation's wealthiest households each year regardless of whether they sell or keep them, which would ensure that income derived from wealth is taxed more like income earned from work.
Biden's plan would raise an estimated $360 billion over 10 years, while Sen. Ron Wyden's (D-Ore.) plan would raise an estimated $550 billion over a decade, and Rep. Jamaal Bowman's (D-N.Y.) proposal possibly even more.
Billionaire-backed Democratic Sen. Joe Manchin (W.Va.), however, has joined Senate Republicans in opposing such a measure.
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