From the website of Paul Krugman:
Today a relatively short note about how some political news bears on a controversy that has been brewing among some economists. Basically, some analysts are saying that we talk too much about mega-billionaires, and not enough about the merely very rich. Thus a new book by Owen Zidar and Eric Zwick, “The Everywhere Millionaire” — their Substack is here — points out that there are about 5 million Americans whose wealth exceeds $5 million. Of these, 3 million are what they call Main Street Millionaires, wealthy small business owners. And as they say, “Collectively, Main Street Millionaires have more than thirteen times the wealth of the Forbes 400.”
And they’re right that focusing only on the extremely (obscenely) rich misses the role played by wealthy small business owners.
Yet dismissing mega-billionaires — hey, they only own 4 percent or so of America — is deeply misleading, for these ultra-rich are at the heart of the rising power of big money in U.S. politics.
First, an economic observation: While the ultra-rich still don’t own as much of America’s wealthy as some may imagine, they have played a dominant role in the rising concentration of wealth.
Using data from realtimeinequality.org, the share of the top 1 percent — roughly corresponding to Zidar and Zwick’s definition of the wealthy — in U.S. wealth rose from 23.2 percent of total wealth in 1979 to 38.3 percent today. So one might think that the great rise in concentrated wealth was a “1 percent” phenomenon. But if we look at the changes in wealth share within the 1 percent, we find that very little of it involved the bottom 90 percent of that group, and most of it came from the top 0.01 percent — the one percent of the one percent:
The big rise in wealth concentration has come from the soaring wealth of a very small group, not the everyday millionaires.
And when it comes to political influence, billionaires wield power that vastly exceeds even their share of wealth. The Forbes 400 may only own 4 percent of U.S. wealth; but the New York Times found that 300 billionaires accounted for 19 percent of all reported federal campaign contributions in the 2024 election. And these are only reported, cash donations. Include other forms of influence — exemplified by Elon Musk’s purchase of Twitter and his conversion of the former public square into a site that elevates extreme right-wing propaganda — and it’s obvious that the malign political influence of a handful of the ultra-rich is much bigger than even those stunningly large donations suggest.
Now the Times reports that Musk is giving even more money in an attempt to help Republicans stave off midterm disaster than he gave in 2024:
Oh, and you won’t be surprised to learn that Musk repeatedly pushed a quickly refuted smear against James Talarico, the Democratic Senate nominee in Texas, and used his ownership of X, formerly Twitter, to amplify the smear.
Massive spending by Musk and other oligarchs probably won’t save Donald Trump’s party from a severe defeat — this time. And the vile smear against Talarico appears to be blowing up in Musk’s face (although how many voters heard the smear but never heard about its falsity?) But if Trump weren’t such a disaster as president, all that money might indeed have been effective.
And the only sustainable way to keep mega-billionaires from having so much power, so much ability to degrade democracy, is for them not to be so wealthy. Basically, a society that contains a class of ultra-wealthy oligarchs is well on its way to becoming a full-blown oligarchy.
So by all means let’s acknowledge that Musk, Bezos, Zuckerberg et al don’t own everything, that there are a lot of rich people who get less attention. But the oligarchs, not the Main Street Millionaires, are the clear and present danger to democracy.
