Why politicians' wealth matters
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After four years of a pro-labor White House, the pendulum appears to be swinging back in favor of business — by at least one measure, anyway: The extraordinary wealth of the incoming Trump team.
Why it matters: The economic background of political leaders influences how they govern — richer lawmakers generally push for policies that favor business interests and those of the wealthy.
Catch up quick: Politicians in the U.S., and around the world, have always been wealthier than most Americans — yet even so, the wealth of the incoming Trump team is extraordinary.
- It's not hyperbole to call the incoming Trump team a government of billionaires, as Axios' Zachary Basu recently wrote.
- Besides Trump, at least 11 billionaires will be serving in key roles in the administration. (The total net worth of President Biden's Cabinet was an estimated $118 million when he took office, per Forbes.)
Zoom in: Trump's Cabinet — plus the influence on the president-elect wielded by the world's richest man — is an escalation of what's been a consistent feature in American politics.
- Those serving in positions of power are "vastly better off than citizens on every economic measure," per a recent review of research on the topic co-authored by Nicholas Carnes, a political science professor at Duke.
The big picture: Wealthier lawmakers, or those who've held high-paying private sector jobs, tend to favor more pro-business policies, according to Carnes' own research.
- Politicians see the world differently depending on their economic background — just like everyone else, he tells Axios.
- "But on average, the wealthier somebody is, the harder it is for them to understand the concerns of people who are working," Carnes says.
What they're saying: When business elites have disproportionate influence on policymaking, it can result "in policies such as tax cuts for the wealthy, deregulation of industries, and reduced funding for social welfare programs — potentially exacerbating inequality," Darrian Stacy, a political science professor at the U.S. Naval Academy who also studies the topic, tells Axios by email, adding that his views don't reflect the official policy or position of the U.S. government, Defense Department or U.S. Naval Academy.
- He points to the tax cuts in the 2017 tax bill, which brought big benefits to corporations and high-income earners. Extending those cuts is a major Trump 2.0 priority, as is deregulation.
Reality check: The president-elect has signaled support for some working class policies — like eliminating taxes on tips and overtime.
- His pick for Labor secretary, Rep. Lori Chavez-DeRemer (R-Ore.) is also widely viewed as pro-labor.
Plus: Just being super rich isn't determinative. It doesn't mean you'll favor the elite in governing. We can all point to President Franklin Roosevelt as the most obvious counterpoint — though it's a decades-old example.
- "If anything I view the large net worth of many of President Trump's appointees as a positive indication of their capabilities," Michael Strain, an economist at the American Enterprise Institute, tells Axios in an email.
- "But of course we should form views about their likely effectiveness based on a broader set of factors than their net worth."
