The Trump coalition of MAGAs and Oligarchs lives on, as dangerous as ever

It's the force that made McCarthy Speaker

Friends,

The two parts of the Republican Party — the MAGA cultural warriors and the economic oligarchs — need each other.

The oligarchy — billionaires, top CEOs, and moguls of Wall Street — wants lower taxes (which requires less government spending) and fewer regulations. Most basically, it wants to continue to siphon off more of the economy’s total gains.

To do so, it needs the MAGA cultural warriors to keep America divided over non-economic issues (abortion, gay rights, immigration, voting rights, religious freedom) so most Americans won’t look up and see where all the money has gone.

And the MAGA warriors need the oligarchy’s money for their campaigns.

This was the coalition and the strategy Trump relied on. The oligarchy financed Trump Republicans. In return, the oligarchs got lower taxes and regulatory rollbacks, while Trump and his MAGAs distracted the public with culture wars and warriors.

Even though Trump is no longer president and Kevin McCarthy has been installed as Speaker, little has changed. The same MAGA-Oligarchic coalition is still aiming to siphon off the economy’s gains for the oligarchy while disguising its effort with culture wars that keep Americans angry and divided. The MAGAs, meanwhile, feed off oligarchic campaign money.

Yes, the congressional Republican Party is factious. But don’t mistake it for a civil war. In reality, as the MAGAs and oligarchs jockey for positions in the lead-up to the 2024 election, each is testing the other’s power — making small compromises and adaptations where necessary.

Look, for example, at the critical role played last week by two oligarchic SuperPACs bankrolled by billionaires — the Congressional Leadership Fund (CLF) and the Club for Growth. The Club for Growth describes itself as a "leading free-enterprise advocacy group" that promotes tax cuts and deregulation — pure oligarchy. CLF spent nearly $260 million during the 2022 election cycle, helping McCarthy and his allies win the House. Its top donors are billionaires — banking scion Timothy Mellon, Blackstone CEO Stephen Schwarzman, and Citadel CEO Kenneth Griffin, as well as the Koch network.

To win the House for Republicans in the midterms, these SuperPACs quietly swung primaries away from controversial candidates such as Madison Cawthorn in North Carolina and Joe Kent in Washington. This caused some anxiety among the MAGAs. So during negotiations for making McCarthy Speaker, the two SuperPACs agreed not to spend money in future open-seat primaries in safe Republican districts. A small concession.

To cinch the deal, McCarthy also promised to hold a vote on a budget that will balance the deficit in a decade and cap discretionary spending levels at fiscal 2022. This will require major spending cuts — thereby opening the way for more tax cuts and bigger tax loopholes. The oligarchs couldn’t be happier.

The fiscal deadlines looming this year over spending bills and an increase in the debt ceiling also favor the oligarch’s economic conservatism because they too may lead to reduced spending and create opportunities for tax cuts.

But they also pose a potential problem for the billionaires. If the deadlines result in government shutdowns or the serious threat of a default on the nation’s debt, the oligarchy could lose a boatload of money. So expect backroom negotiations between the oligarchs who don’t want economic chaos and the extreme MAGAs who would be happy with it. This bargaining will be a central drama inside the congressional Republican Party over the next nine months.

The House MAGAs will spend most of their energies on fiery culture war investigations — of Joe Biden, Hunter Biden, the FBI, the IRS, other Democrats, and alleged socialists and pedophiles. The fireworks will conveniently distract the public’s attention from the oligarch’s economic looting.

Trump continues to be the central force within this coalition of economic oligarchs and MAGA culture warriors.

Speaking to reporters after he became Speaker, McCarthy was effusive in thanking Trump, who backed him for Speaker (after McCarthy helped rescue Trump by visiting him at Mar-a-Lago soon after the attack on the Capitol). “I don’t think anybody should doubt his influence,” McCarthy said. “I was just talking to him tonight, helping get those final votes.”

The is the reality we’re in, folks. But it is not a cause for defeatism or cynicism. The Democratic Party under Joe Biden will continue to fight back. The rest of us must continue to try to get big money out of politics, make the electoral college irrelevant, and protect and expand voting rights. More on all this in future letters.

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