Robert Reich: Trump’s Refusal to Concede Is Another Gift to the GOP’s Billionaire Donors

Leave it to Donald Trump and his Republican allies to spend more energy fighting nonexistent voter fraud than containing a virus that has killed 246,000 Americans and counting.

Donald Trump wearing a suit and tie: President Donald Trump speaks in the Rose Garden at the White House on November 13 in Washington, D.C.

© Tasos Katopodis/Getty
President Donald Trump speaks in the Rose Garden at the White House on November 13 in Washington, D.C.

The cost of this misplaced attention is incalculable. While COVID-19 surges to record levels, there’s still no national strategy for equipment, stay-at-home orders, mask mandates or disaster relief.

The other cost is found in the millions of Trump voters who are being led to believe the election was stolen and who will be a hostile force for years to come—making it harder to do much of anything the nation needs, including actions to contain the virus.

Trump is continuing this charade because it pulls money into his newly formed political action committee and allows him to assume the mantle of presumed presidential candidate for 2024, whether he intends to run or merely keep himself the center of attention.

Leading Republicans like Senate Majority Leader Mitch McConnell are going along with it because donors are refilling GOP coffers.

The biggest beneficiaries are the party’s biggest patrons—the billionaire class, including the heads of the nation’s largest corporations and financial institutions, private-equity partnerships and hedge funds—whom a deeply divided nation serves by giving them unfettered access to the economy’s gains.

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Their heist started four decades ago. According to a recent Rand study, if America’s distribution of income had remained the same as it was in the three decades following World War II, the bottom 90 percent would now be $47 trillion richer.

A low-income American earning $35,000 this year would be earning $61,000. A college-educated worker now earning $72,000 would be earning $120,000. Overall, the grotesque surge in inequality that began 40 years ago is costing the median American worker $42,000 per year.

The upward redistribution of $47 trillion wasn’t due to natural forces. It was contrived. As wealth accumulated at the top, so did political power to siphon off even more wealth and shaft everyone else.

Monopolies expanded because antitrust laws were neutered. Labor unions shriveled because corporations were allowed to bust unions. Wall Street was permitted to gamble with other peoples’ money and was bailed out when its bets soured even as millions lost their homes and savings. Taxes on the top were cut, tax loopholes widened.

When COVID-19 hit, Big Tech cornered the market, the rich traded on inside information and the Treasury and the Fed bailed out big corporations but let small businesses go under. Since March, billionaire wealth has soared, while most Americans have become poorer.

How could the oligarchy get away with this in a democracy where the bottom 90 percent have the votes? Because the bottom 90 percent are bitterly divided.

Long before Trump, the GOP suggested to white working-class voters that their real enemies were Black

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This French Billionaire Could Get a Half-Win on Shopping Malls

Still, even if pressure is increasing for investors to approve the capital increase when they gather virtually next week, Cuvillier’s activist opponents — telecoms billionaire Xavier Niel and former Unibail CEO Leon Bressler — have reason to hope they can wield influence over the strategic direction of the company, whose fall from grace isn’t all down to Covid-19. 

Niel and Bressler, who are campaigning for three seats on Unibail’s board, have built a credible case arguing that Cuvillier’s management team and debt-laden expansion in the U.S. and U.K. — chiefly due to the 2018 deal to acquire Westfield — are to a large extent responsible for the company’s vulnerability to the pain of a global pandemic. Covid-19 may be a once-in-a-generation crisis, and Unibail isn’t the only property developer to be raising capital in this bleak environment, but its epic tumble stands out. 

Unibail’s market capitalization has shrunk about 80% since the end of 2017 to 4.8 billion euros and its debt metrics are worse than those of peers. Hedge funds have raced to bet against the stock, adding to pressure from lenders and ratings agencies. The company overpaid for Westfield, and is suffering for it.

Even more awkward, Guillaume Poitrinal, Cuvillier’s predecessor, has publicly thrown his lot in with Niel and Bressler.

While investors may yet approve a capital increase, they won’t do so gladly. Unibail stock trades at an egregiously steep discount of 80% to book value, so a share issue threatens heavy dilution. Usually, shareholders would expect to see some governance reform in return for giving their support.

That could pave the way for a half-victory of sorts for Niel and Bressler. Proxy adviser Institutional Shareholder Services Inc. has recommended shareholders approve a potential capital increase, but with a delay to allow a rethink with activist input in the boardroom. That might open the door to some key changes in the plan proposed by Unibail’s management. For starters, the size and timing of a cash call.

Unibail says it has access to credit lines and cash worth 12.5 billion euros, which would cover about two years’ worth of refinancing needs. That suggests some freedom to wait a little longer, or sell more assets, before soaking investors. Cuvillier has hit back at the notion he’s going too fast — “We’re not fools,” he told analysts — but bond markets ultimately look awash with money.

While Unibail has said all options are open regarding its Westfield assets in the U.S., more voices at board level might accelerate such decisions. And in a post-pandemic world, having a tech-savvy billionaire like Niel on hand to help reshape the mall experience would surely be useful.

A lot can happen in a week, and there’s a reasonable chance that the coronavirus outbreak will require not one but several debt-cutting plans. Even if they don’t halt a capital increase, Niel and Bressler may still have their voices heard. 

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and

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