How This Hedge Fund Billionaire Turned Activist Plans To Take On Trump
Capital & Main is an award-winning publication that reports from California on economic, political, and social issues.
Tom Steyer and Donald Trump were both born in New York City, and both went on to legendary success in the business world.
And that’s about where the similarities end. Indeed, in the respective realms of American billionaires and U.S. politics, Steyer and Trump virtually define the opposite poles.
While Trump amassed a fortune in real estate, giving very little away (Trump’s charitable foundation is still under investigation for fraud), then veered into right-wing electoral populism, Steyer—who made his money in hedge funds—has poured his wealth into progressive causes. He and his wife, Kat Taylor, signed the Giving Pledge in 2010 and have devoted their considerable resources to fighting climate change (Steyer heads the influential advocacy organization NextGen Climate, based in San Francisco) and economic inequality (Taylor runs Beneficial State Bank, which she and Steyer founded to invest in low-income communities).
In the wake of the election, Steyer—who had previously signaled his interest in California’s gubernatorial race—has vowed to spend whatever it takes to fight Trump and advance an alternative progressive vision. Anticipating Trump’s attack on climate change science, his first acts of dissent included copying the entire Environmental Protection Agency website and making it available to the public.
On February 1, NextGen Climate announced its intention to broaden its focus, releasing a video message from Steyer in which he says that Trump has “launched an all-out assault on the American way of life.” Accompanying the video is a survey that implores viewers to choose among 12 issue areas, from climate change and workers’ rights to racial justice, immigration, and foreign policy – what his team has dubbed “crowdsourcing the resistance.”
Three weeks after Trump took office (and just before a handful of Republicans like Senator John McCain began to challenge the new president), Capital & Main sat down with Steyer at NextGen’s office in San Francisco’s Financial District for an animated conversation about the future of the Democratic Party, inequality and the existential peril of climate change in the Trump era.
Capital & Main: What has surprised you the most in the first three weeks of Trump’s presidency?
Steyer: When you think about the attacks he’s made on the rights of Americans, the extreme radicals that he’s nominated, his willingness to flout the laws of the United States, it’s been made very, very clear in the first three weeks that fact-based, thoughtful dialogue between trustworthy counter-parties is not in the cards. And we’ve seen zero pushback from within the Republican Party.
Capital & Main: California is seen as the place where the strongest resistance to Trump will happen, while the threat that’s looming over the state is the potential cutoff of tens of billions of dollars in federal aid. If Trump and Congress go through with that threat, how does California respond?
Steyer: Let me push back on a couple of parts of that question. It’s not federal aid. California pays out disproportionately into the federal treasury. This is not charity. This is not out of the goodness of their heart. We’re in a system where we, Californian citizens, pay federal taxes and the federal government provides services to citizens of California. The idea that because they don’t like what we think, they will cut us off and try and punish Californian citizens in the most basic ways–in terms of health care, in terms of education–as a way of trying to force us politically to do what they want, is completely unjust and will be litigated from here until kingdom come.
The second thing I’d say is this: It’s not just that we’re pushing back against attacks on the rights of Americans. We’re not just saying no. We have a better way of doing it. We are pushing forward the vision of an inclusive democracy. Nobody wants to resist more seriously than the people in this room, but the fact of the matter is, we know that California is not Fortress California. We need to make sure that we’re not isolated by the federal government. The majority of Americans don’t agree with this guy. The majority of Americans agree with us, and we need to make sure we’re reaching out to and connecting with those people.
Capital & Main: When it comes to the question of ideology, and the question of identity politics versus class focus, what do you think the Democratic Party needs to do?
Steyer: Obviously what the Trump campaign was trying to do was to divide Americans. The point of the Democratic Party is we absolutely have to take into account all Americans. There’s no way to do that without including race and ethnicity because it’s so much a part of our past and it’s so much a part of where we are. We have a narrative that’s coming out of the Republican Party about who the true Americans are. One of the biggest points that we want to fight about is the people standing up to Trump, defending the interests of Americans over corporations, are the true patriots, period. That is a patriotic act that is entirely consistent with patriotic acts that have gone on over the last two centuries, and it’s really important that people understand who has built this country, who works hard.
Capital and Main: Bernie Sanders’s Our Revolution is trying to move the Democratic Party toward an economic agenda that speaks more authentically to working families. Is that a direction that the party needs to move toward?
Steyer: There is an underlying fact about American life, which is that working people have gotten a decreased share of our profitability and our productivity for 40 years. That is the reason that we have the historic inequality that Bernie Sanders was talking about, and what in effect Donald Trump was talking about. They talked about it in terms of jobs, but actually I think if you look, we have relatively low unemployment. The truth of the matter is, we have incredibly low wages at a time when we have very high profitability for corporations.
When we talk about Bernie Sanders and fairness, there is really a question about the relationship of employers and employees. There is a false mythology coming from the Reagan era that somehow the market works, the market is efficient, the market is just. That’s absolutely false. Markets have rules [imposed on them]. As we all know, if this were 120 years ago, we could hire an 8-year-old for a quarter and make him work 14 hours a day, and he wouldn’t go to school. That’s not possible anymore. That’s just a rule. God didn’t come down and say that. We passed a law.
Capital & Main: This was the thrust of Bob Reich’s book Saving Capitalism. There are rules.
Steyer: There are rules, and you know what? These guys have changed the rules. The right of working people to organize. You [try to] negotiate your salary with Walmart. See how that goes. It’s not going to happen. No working person is going to be able to out-negotiate all the lawyers of a multibillion-dollar multinational company. When you think about rules, you cannot ask individual working people to represent themselves and think they’re going to get a fair deal.
Capital & Main: One of the great ironies of the 2016 election is that economic inequality was a front-burner issue in the presidential election and then we elected Donald Trump. How did that happen?
Steyer: People are under the gun. The rules are stacked against them. The [narrowest] special interests are absolutely the heart and soul of this administration and the Republican Party. There is no question that we have to explicitly fight back on behalf of Americans against special interests.
If you look at last year in California, we finally got overtime pay for farm workers. Have you seen a lot of people going out of business on these big farms since that horrible event happened? No. That’s just a rule. Everybody else has had that rule, but farm workers couldn’t get that for decades.
There’s a huge union-bashing effort … I think it’s so ironic. Why are manufacturing jobs well-paid? Because people organized them 80 years ago and fought over the contract every [time it was up for renewal.] The people who want to absolutely take apart the labor movement are talking about how important manufacturing jobs are.
Capital & Main: In the first weeks of the Trump administration there has been a concerted effort to create a wedge between labor and environmentalists by dangling the prospect of oil pipelines and other fossil fuel projects before the unions. How do you prevent that wedge from being driven between those two constituencies?
Steyer: Rebuilding and extending the fossil fuel economy is a horrible mistake on an environmental basis, but it’s also a horrible mistake on an investment basis. Whenever people talk about the Keystone pipeline, they talk about whether we build the pipeline or whether we don’t build the pipeline. That is a completely false frame. [The question really is], do we build good infrastructure or bad infrastructure? We’re either going to rebuild and extend the fossil fuel infrastructure, which has about a 40-year life, or we will build an alternative, clean energy economy. We’ll create two million net more jobs, higher wages, lower costs and better employment.
In 2016 in California, we supported low-income housing and public transportation measures that were worth over half a million jobs. If you look at the Keystone pipeline, they say it’s worth 3,500 jobs for two years. To rebuild the United States, to rebuild the state of California, in a clean way will create many more jobs.
Capital & Main: Why are some trade unions meeting with Trump?
Steyer: There are a lot of pipelines they want to build in infrastructure that are unionized jobs. The trades know that. Those are high-paying jobs, and there are going to be a lot of them in the short run. If we built a different kind of infrastructure–if we rebuilt the electrical grid, if we rebuilt buildings to make them more energy-efficient and put in better HVAC and better windows, if we built huge solar arrays–there are a lot more jobs doing that.
This is about wages and making sure that the jobs are organized. If you look at the monthly labor reports for the U.S., they’re always basically something like 50,000 service jobs created, 50,000 health care jobs created, 10,000 manufacturing jobs lost.
That’s a net 90 plus. It’s a pretty good month. Why do we care? Because the manufacturing jobs, you figure, are going to be paying 32 bucks plus benefits, and the health care jobs and the service jobs you figure are going to be paying somewhere between 15 and 25. It’s really hard to live on between 15 and 25, so you don’t want to lose well-paid jobs. I get that, and that’s why I say this is really about what you get paid. Why is working in a plant inherently more valuable than working in a hospital?
Capital & Main: That is the question of this generation in terms of the workforce.
Steyer: How do we split up the profits? If you look at what Silicon Valley does, there are companies that make tens of billions of dollars that outsource janitorial and security services so they can pay minimum wage.
The question is, if we’re all working together, what is my responsibility in relationship to you? If people are going to assume that human beings are widgets, there have to be laws to protect human beings. If you look at the most politically vulnerable people, which is farm workers, look and see how they did over time. That’s all you really need to know about labor markets.
They didn’t have a right to breaks. They didn’t have a right to overtime. They didn’t have a right to water. They didn’t have a right to shit. Then rules [were set]. God did not come down and say it. Those are just laws that men and women passed.
Capital & Main: Within the solar industry, there are significant numbers of jobs that are not great jobs. How do you get to a place where the green economy that is emerging is actually rebuilding the middle class and not accelerating the decline of the middle class?
Steyer: What’s going on in the solar industry is people are pushing really hard on a cost basis to beat fossil fuels. Renewable costs go down based on innovation, technology and scale. The rule for solar is it goes down 24% every time the installed base doubles. We are going to mop the floor with fossil fuels, because human beings are smarter than rocks.
As it crosses over–and it is crossing over in terms of what is the cheapest source of electricity–it is [essential] that the wages of working people in those industries go up, because we cannot have this happen without there being fair wages that people can raise a family on. We can’t have that in this society.
Capital & Main: For many people Elon Musk is the poster child for a visionary approach to building a green economy, and yet little attention has been paid to job standards at Musk’s businesses. How do you get people to think holistically about building a green economy?
Steyer: I totally agree. We obviously see his strategy as not including the interests of the people who work in his companies. We also see him feeling like it’s sensible to be on one of the administration’s task forces. Without having talked to him about either of those things, those are not things that we would do.
I wouldn’t pick on Elon Musk about this. I just think in a broad-based sense, most employers are obsessively concerned with their bottom line. Workers need to have rights. Workers need to be protected by laws. Workers need the right to organize.
Capital & Main: When we interviewed your friend Bill McKibben a couple of months ago, he was close to sounding apocalyptic in his feeling about climate change in the coming era. Do you share McKibben’s fear and sense of dread in terms of what is coming, or do you feel like there is reason for hope?
Steyer: I think about it this way. With all of the evidence on the one side, and the risk being almost unimaginably high, no elected Republican has decided to tell the truth for almost a decade. They have pushed as hard as possible to prevent us from moving forward, in return for money from the fossil fuel companies to fund their party.
Do I believe in the power of the human spirit and American ingenuity and American creativity and business acumen? Probably more than Bill does, because I’ve spent 35 years in the private sector, and I know that under the right circumstances Americans can do things that will shock everyone, including themselves. I believe that in my bones, but I will say this: The willingness of an entire party to put the corporate special interests ahead of the interests of their constituents and every other American and every other person on this globe is really shocking. Until we see them start to go a different way, then Bill’s pessimism is understandable.
Can Americans reach the Moon? I believe we’ve proven we can. Can Americans defeat the combined forces of fascism? I believe we have proven we can. Can we do this? Yes, but we are really under the gun. To see what’s going on now, and to see who’s been nominated, and to see their attitude toward truth, and to see that scientists are now going to have to demonstrate and march in the street to stand up for the idea of evidence-based decision-making, is very scary. There’s a reason why Americans are rising up, because that’s something that we really can’t live with.