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Sep 13, 2022 Matthew Cunningham-Cook

How Wall Street Is Funding The Culture War

The leading right-wing pugilist against “critical race theory” is backed by Wall Street execs whose financial crisis crushed communities of color.
How Wall Street Is Funding The Culture War
Christopher Rufo appears on Fox’s Tucker Carlson Tonight in June 2021

Chris Rufo, the pugilistic pundit leading the right’s charge against how public schools teach race and sexuality, is backed by billionaires who profited handsomely from the 2008 financial crisis that threw 8.6 million people out of work, 7.8 million people out of their home, and drove thousands of excess suicides.

Rufo is a senior fellow and prominent spokesperson at the Manhattan Institute, a right-wing think tank that has fueled recent hysteria over critical race theory (CRT) and LGBTQ curricula in schools. While the Manhattan Institute doesn’t disclose its donors, the organization’s board is helmed by executives who are deeply invested in preserving the country’s entrenched economic inequality — and who come from a financial industry that has plundered massive wealth from communities of color.

The situation illustrates how corporate interests are quietly using their wealth to stoke hate and divide America over culture-war issues in order to divert people’s attention from more pressing matters — namely, the country’s grotesque wealth inequality and the near-total control Wall Street now exerts over everyone’s economic lives.

Since Fox News vaulted him to prominence in 2020, Rufo, who declined The Lever’s repeated interview requests, has made dozens of high-profile media appearances where he said things like “Critical race theory has become the default ideology of the federal bureaucracy” and that “Public school bureaucrats… are training children to experiment with sexual identities.”

These efforts have been bankrolled by powerful Wall Street executives — including a hedge fund vulture and so-called “Doomsday investor” whose family donated more than $1 million to the Manhattan Institute in 2020 alone.

Board of Profiteers

The Manhattan Institute for Public Policy Research, founded in 1977 by future CIA director Bill Casey and British neoliberal pioneer Antony Fisher, has played a critical role in dismantling the social safety net and criminalizing the poor under the guise of promoting “welfare reform” and “broken windows” policing.

The current chairman of Manhattan Institute’s board is hedge fund manager Paul Singer. The Toronto Financial Post reported that his firm was “profiting handsomely” during the 2008 financial crisis “from credit default swaps that bet leveraged companies would run aground.” Singer’s family foundation donated $1.1 million to the think tank in 2020, out of $17.9 million in total contributions the organization received that year. Singer is also known for buying sovereign debt of countries like Argentina, Peru, and the Republic of the Congo for pennies on the dollar, then using strong-arm tactics like seizing ships and planes to win full payment.

Hank Greenberg, the longtime former head of insurance giant AIG, as well as hedge fund manager John Paulson, are also on the Manhattan Institute’s board. Paulson’s family foundation donated $50,000 in 2019, the most recent year for which records are available, as well as a “truly transformative gift” to the institute in May 2022.

Only donations from family foundations to other organizations are disclosed, per IRS rules. This means that the total donations from Greenberg, Paulson, and Singer could be much higher.

Under Greenberg’s leadership, AIG insured complex financial products that it lacked the reserves to support, in particular so-called collateralized debt obligations (CDOs) composed of low-quality mortgages, which prompted the $182 billion bailout of the firm in 2008 and 2009. Greenberg admitted to defrauding AIG investors about the insurance company’s financial condition in 2017.

Paulson, meanwhile, convinced Goldman Sachs and other banks to issue those same CDOs so that he could bet against, or “short” them, helping to cause the housing meltdown that created the 2008 financial crisis.

The Securities and Exchange Commission (SEC) investigated and charged Goldman in 2010 for the bank’s role in the scandal, which was called “Abacus” for the name of the CDO. The SEC did not charge Paulson for his role. Goldman paid $550 million to resolve the SEC’s allegations. Paulson earned $1 billion from the trade and $4 billion betting against the housing market.

While these executives were benefiting from the 2008 financial crisis, the Great Recession was wreaking disproportionate havoc on communities of color. Researchers found that while white households lost 16 percent of their wealth between 2005 and 2009, Hispanic and Black households lost 66 and 53 percent of their wealth, respectively. And according to an ACLU report, by 2031, the downturn will have cost the median black household nearly $100,000 in long-term losses.

The Manhattan Institute, as well as Singer, Greenberg, and Paulson, all failed to respond to requests for comment.

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Other notable Wall Street board members of the Manhattan Institute include:

  • Kathy Crow, a real estate investor whose family owns Crow Holdings, a major real estate private equity firm that receives significant public support, including from teachers’ pension funds.
  • Hedge fund manager Ravenel Curry III, who also manages public pension and union funds.
  • Thomas McInerney, who spent 23 years as a general partner at major health care private equity firm Welsh Carson.
  • Harvey Golub, Chairman of investment bank Miller Buckfire, which charged an impoverished and bankrupt Detroit $20 million in fees.
  • Warren Stephens, an investment executive on the board of — and has other additional close ties to — the upscale department store Dillard’s, which has routinely paid out large settlements for employee discrimination, as well as for racially discriminating against Black customers.
  • Kathryn Wylde, who heads a major Wall Street lobbying organization, the Partnership for New York City.
  • Jay Lefkowitz, a partner at law firm Kirkland & Ellis who bragged in his bio about getting major pharmaceutical giants Teva and Actavis off the hook for marketing practices that caused severe neurological disorders in two women.

Now, these same people who preyed on communities of color are using their wealth and authority to whip up racist and homophobic politics.

The Face Of A New Right-Wing Consensus

These days, Christopher Rufo is at the center of the Manhattan Institute’s highest-profile work, and his influence in the fraught debate over CRT and LGBTQ education cannot be overstated. Instead of offering constructive criticism, Rufo’s central aim appears to be inflaming culture war. As he has himself admitted, “I’m a brawler.

Rufo’s guest appearances on Fox News helped manufacture a panic over public schools teaching about race in 2020, the year George Floyd’s murder triggered a national reckoning on pervasive racial disparities in America, just as Fox News-backed President Donald Trump faced an uphill battle to reelection.

“Critical race theory” is an academic movement that examines connections between racism and the American legal system. But Rufo attacked the concept as a general bugaboo, in order to stoke fear and hate nationwide. “The goal is to have the public read something crazy in the newspaper and immediately think ‘critical race theory,’” Rufo tweeted in March 2021.

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Rufo’s campaign has been elevated by conservative Fox News pundit Tucker Carlson, who, in 2021, said that no one “has done more in this country than Chris Rufo to expose so-called ‘critical race theory’ for what it really is, which is racism, unadorned, it’s systemic racism if there ever was it, [Rufo] has said that clearly, and they hate him for it.” Carlson, like Rufo, has received lucrative support from Wall Street.

Manhattan Institute appears to be doubling down on Rufo’s incendiary approach. In early June, the think tank announced it was hiring Ilya Shapiro, a Georgetown Law professor who resigned after being investigated by the school for saying Biden would nominate “a lesser Black woman” to the Supreme Court.

Now, Rufo has transitioned to pearl-clutching about LGBTQ education in public schools, positing that it allows LGBTQ-identifying teachers to “groom” children to be sexually exploited.

In July, Rufo tweeted: “Tomorrow, I’ll be publishing my first report in a new series on gender ideology in K-12 schools. My goal is to publish one story per week for six weeks, establishing the frame, driving multiple news cycles, and generating 500 million media impressions. Get ready to rumble.”

A week later, Rufo stated that documents he had obtained showed that “Portland Public Schools had launched a war against the ‘gender binary’ and adopted a radical new curriculum teaching students to subvert the sexuality of ‘white colonizers’ and begin exploring ‘the infinite gender spectrum.’”

Rufo’s backlash against the teaching of once-taboo topics in American education might be part of a larger campaign for the wholesale privatization of public schools. “To get universal school choice, you really need to operate from a premise of universal public school distrust,” he told an audience in April at Hillsdale College, whose president faced backlash in 2013 for referring to people of color as “dark ones.”

Rufo’s targeting of public education dovetailed neatly with a top Manhattan Institute priority: The think tank is a fierce advocate of charter schools, a form of school privatization, and board chairman Singer has funded charter schools in New York City and been locked in battles with pro-public education teachers unions since 2016.

Some Ideas Are Worth More Than Others

Rufo’s financial support and subsequent ascendence is a reminder that in the “marketplace of ideas,” ideas with money and power backing them carry more weight, even if they are extreme. In the 1930s, for example, the Du Ponts and other individuals affiliated with General Motors financed the work of white supremacist fascists like Vance Muse, who invented the modern “right-to-work” movement.

Rufo’s rise, in fact, closely matches the success of the last big star to emerge from the Manhattan Institute: Charles Murray, who arrived at the think tank in 1981. Before joining the organization, Murray worked as a think tank researcher for the quasi-public American Institute for Research, devising ways to make life more difficult for inner city youth.

Manhattan Institute financed and aggressively promoted his first book Losing Ground. It was, in effect, a full-frontal assault on the welfare state, the central claim being that poor people would be better off if welfare programs were eliminated.

Former President Bill Clinton acknowledged Murray’s contribution to his own thinking on welfare, saying Murray “did the country a great service,” in an interview with NBC in 1993. Clinton’s embrace of welfare cuts led to the catastrophic “welfare reform” of 1996, which plunged an additional 300,000 children into deep poverty by 2005.

The publicity surrounding Losing Ground gave Murray the platform to publish an even more incendiary work in 1994, The Bell Curve, which argued that racial differences in IQ measurement were inherent. The Manhattan Institute has hosted Murray at least three times since he left the group in 1994.

Both Murray and Rufo are adept at the same strategy: take an idea that seems deranged and factually false, and weaponize it for political gain. In Murray’s case, it was the elimination of welfare, an idea embraced by no organized constituency before his book’s publication. In Rufo’s case, it’s that academics are attempting to secretly indoctrinate schoolchildren into an anti-white ideology, or to sexually abuse them by way of LGBTQ education.

In a functioning society, such ideas would be laughed out of town. But not in the U.S., where the exceptionally wealthy can mold discourse to their advantage, insulating themselves from the social harms caused by their profiteering.

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