Billionaire, former hedge-fund manager, and “patrician populist” Tom Steyer has spent $16 million of his personal fortune since he announced his campaign for the Democratic nomination for president on July 9. That’s about $320,000 a day.
The plan was simple: blanket the airwaves, YouTube channels, and social media feeds of early primary states and pray it would raise his profile quickly enough to meet the DNC’s polling threshold for participation in the next debate.
In one respect, it seems to have worked. “Hey, it’s the YouTube guy!” someone yelled while Steyer canvassed the Iowa State Fair earlier this month, the New York Times reported. Presumably millions have seen at least five seconds of his pitch before clicking “Skip Ad.”
But in its primary purpose, the gambit flopped. On Wednesday, Steyer fell short of the requisite four polls showing at least 2 percent support. His RealClearPolitics polling average currently sits at 0.5 percent.
With an estimated $1.6 billion under his control — and some indications that it’s considerably more — $16 million is virtually nothing to Steyer, a mere percent or less of his total net worth. He might well recoup that amount in capital gains by the time the September 12 debate rolls around.
Obviously, we shouldn’t have a political and economic system where someone like Steyer can get so wealthy, then have complete freedom to spend his ill-gotten gains on whatever the hell he feels like, including spending that significantly impacts our political system and thus all of our lives. But, given that we do, let’s think about this. In a moment of cascading political and ecological crises, we should consider where else he might have directed this seven-week spending spree.
Let’s take Steyer’s two priorities: climate justice and impeaching Donald Trump. His ambitious platform includes the creation of a Civilian Climate Corp, hiring “young Americans, underemployed people, and displaced workers” to enact “tailored local approaches” to mitigate climate change.
He doesn’t need to wait. For the $16 million Steyer handed over to Google, Facebook, and television stations over the past two months, he could have hired 320 Iowans at $50,000 for a year to help farmers reduce their dependence on industrial fertilizers that poison drinking water and contribute to massive dead zones in the Gulf of Mexico. Or he could have simply tripled the amount Leonard DiCaprio just donated to fight the Amazon forest fires.
On impeachment, the main impediment isn’t the lack of a presidential candidate carrying the torch — it’s the Democratic leadership in Congress. More than half of House Democrats now support an impeachment inquiry but Nancy Pelosi remains steadfastly opposed. The calcified party establishment is finally getting a challenge from its left, one that Steyer could deploy his considerable resources to support. Alexandria Ocasio-Cortez’s campaign needed less than $600,000 to defeat Joe Crowley last year — roughly what Steyer’s campaign has dished out every two days since July. Incumbents are better prepared for such challenges now, but Steyer’s pockets are deep.
Why Steyer doesn’t pursue lower profile but higher impact endeavors likely has roots in his path to billions. Even among a self-deluding elite, hedge-fund managers are particularly convinced of their superhuman prowess, proven by their ability to sniff out opportunities that exceed index returns. In this pursuit, Steyer was undeniably successful.
Though the first line of his campaign bio describes him as a “self-made billionaire,” Steyer’s father was a Wall Street lawyer and his educational pedigree (Buckley, Phillips Exeter, Yale for undergrad, Stanford for an MBA) put him on a fast track to power. His first job after graduate school was at Goldman Sachs, where he became a protege of Robert Rubin, the future treasury secretary who would oversee a deregulatory rampage culminating in the 2008 financial crisis. “Bob was just a fantastic person to work for,” Steyer told Institutional Investor. “I felt a ton of loyalty to him.”
In 1986, Steyer set out on his own, founding Farallon Capital Management with $15 million in seed capital. It soon soared, delivering double-digit returns for investors (at $5 million minimum buy-in). By 2005, Farallon was managing $12.5 billion, making it one of the world’s largest hedge funds.
Steyer plunged capital into an array of positions: “distressed assets,” real estate, fossil fuels. In 2014, the New York Times reported that coal-mining companies increased their annual production by 70 million tons after receiving Farallon’s infusion of capital. “That is more than the amount of coal consumed annually by Britain,” the Times wrote. Steyer was also a major investor in CapitalSource, a commercial lender founded by fellow flailing presidential candidate John Delaney.
Steyer’s environmental philanthropy preceded his 2012 departure from Farallon but accelerated considerably thereafter. Bill McKibben recalls meeting Steyer that year and appreciating what he viewed as a genuine ecological commitment; together they pressured Middlebury College to divest its endowment from fossil fuels. In the years since, Steyer has donated millions to environmental causes, including 350.org, the organization McKibben co-founded. Still, it’s worth noting that the group’s total 2017 expenditures were roughly $3 million less than what Steyer just spent on his presidential campaign over the past two months alone.
Expecting, cajoling, or pleading with billionaires to donate money elsewhere is largely an act of folly, especially when that wealth was itself generated by accelerating ecological collapse, the housing crisis, and the financialization of the economy. At best, such appeals help the ruling class engage in moral laundering; at worst, their charity serves as a Trojan horse for other, less savory, agendas.
But as he continues to burn millions in futile pursuit of the presidency, Steyer’s vanity demonstrates that even progressive billionaires don’t know how to use their wealth responsibly. That’s why we need to take it from them.