From Wall Street to Silicon Valley, a surge of billionaires are rallying behind Donald Trump’s presidential campaign. Stephen Schwarzman of Blackstone, Steve Wynn, Bill Ackman, and Marc Andreessen are just a few of the high-profile supporters. However, experts are sounding the alarm that this could be a perilous path.
Business school professors and historians warn that endorsing Trump might backfire for corporate America and jeopardize democracy. Donald Trump has openly discussed becoming a dictator on day one, terminating the constitution, and using the justice department to settle scores with his critics.
Jeffrey Sonnenfeld from Yale School of Management pointed out a striking disparity. While numerous billionaires are backing Trump, not one CEO from a Fortune 100 company has contributed financially to his campaign. Sonnenfeld suggests CEOs fear the backlash from shareholders if they support an authoritarian candidate, a sentiment echoed by Trump’s running mate, JD Vance, who once dubbed Trump ‘America’s Hitler.’
Public records reveal that despite Elon Musk’s endorsement and rumored pledges, he has not donated to Trump’s campaign, though he has created a pro-Trump Super Pac. Over 60 billionaires have donated to Trump’s cause. This list includes Bernard Marcus, the Winklevoss twins, Nelson Peltz, Timothy Mellon, who donated $125m, and Miriam Adelson, who has given $5m with promises of more.
These wealthy individuals often feel less constrained than CEOs when donating to Trump. Their primary motivation appears to be the promise of significant tax cuts for the ultra-rich. They are also dissatisfied with Joe Biden’s administration’s policies. Despite Kamala Harris emerging as the Democratic nominee, Trump’s billionaire backers are steadfast.
Witold Henisz of the Wharton School criticized the billionaires for failing to account for long-term risks. He pointed out that Trump’s plans could threaten democracy and judicial independence. Furthermore, Trump aims to reduce the Federal Reserve’s independence, which could spike inflation, and his immigration policies might increase labor costs and tarnish America’s global image.
Harvard’s Daniel Ziblatt echoed these concerns, deeming the business leaders’ support for Trump as short-sighted. He highlighted that democracies foster stronger economic growth and innovation, which is in their long-term interest. Ziblatt stressed that democracy is unique in allowing the removal of unpopular leaders, a fundamental feature that should not be risked.
Many billionaires justify their support by pointing to Trump’s promised economic, immigration, and foreign policy changes. Trump has pledged to renew tax cuts for the rich and slash the corporate tax rate even further. His supporters also favor his stance on a lower estate tax and opposition to Biden’s proposed wealth tax.
Trump supporters are also critical of the Biden administration’s stricter climate regulations, labor union support, and rigorous antitrust law enforcement. Several prominent business figures, like Howard Lutnick and David Sacks, have hosted significant fundraisers for Trump. Some tech executives are particularly drawn to JD Vance, given his association with investor Peter Thiel.
Amidst this support, some professors express concern. Anat Admati from Stanford warned that backing Trump could result in backlash from employees, customers, or the public. The fear is that Trump’s authoritarian tendencies could lead to long-term negative consequences, undermining democracy and economic stability.
Past incidents of Trump’s retaliatory actions against corporations add to the apprehension. Critics cite examples like the blocked AT&T and Time Warner merger and Amazon’s lost Pentagon contract, which they attribute to Trump’s vendettas. John Coffee from Columbia Law School noted that Trump’s approach appeals to corporate leaders who desire a compliant environment.
Historian Timothy Ryback cautioned against drawing direct comparisons between Trump and Adolf Hitler, but he acknowledged unsettling similarities in their rhetoric. He advised business leaders to take Trump’s authoritarian claims seriously, warning against the peril of underestimating such promises.
Jerry Davis from the University of Michigan posed difficult questions about the implications of Trump’s policies, such as building internment camps for immigrants. This puts businesses in a moral dilemma should they be asked to participate in such initiatives. Dean Sonnenfeld highlighted the unprecedented lack of Fortune 100 CEO support for Trump, contrasting it with past Republican candidates like Reagan and the Bushes.
Sonnenfeld concluded that many CEOs reject Trump because of his disregard for the rule of law, protectionism, and divisive rhetoric. CEOs prefer stability and a focus on shared values, fearing that Trump’s divisive tactics threaten both corporate coherence and democracy.
The alliance between billionaires and Trump is fraught with potential peril. Their pursuit of short-term gains could jeopardize America’s long-term democratic and economic stability. The warnings from academics and experts make it clear that this support is a gamble with high stakes.
Source: Theguardian