When donald trump As he faces American voters in November, he will do so with a group of billionaires behind him. Last month, Stephen Schwarzman, CEO of Blackstone, the world’s largest venture capital firm, declared that he would support Trump. It is expected that Miriam Adelson, a casino magnate who did not participate in the primaries, will soon do the same. People say that Bill Ackman, a hedge fund manager who has already donated to Democrats, is about to endorse Trump. The former president even maintains increasingly friendly relations with Elon Muskwith whom he once exchanged insults.
Joe Biden has raised more money overall (although Trump has filled his boots since his conviction in a Manhattan courtroom) and some wealthy Republicans still haven’t decided who to support. But the former president’s growing support among the wealthy is evidence of his rehabilitation. Republican business elites had rejected Trump after he tried to overturn the result of the last election. Today those same people seem to be looking for a reason to put aside their scruples.
The benefit for Trump is much greater than the economic one. Politicians seek the support of tycoons because it is seen as proof that they would be good for the economy. For their part, many billionaires undoubtedly think it is in their interest to support Trump. He is the overwhelming favorite to win, and courting him now could secure a valuable reward for those who crave influence or need political favors (or fear his revenge). Companies, and billionaires themselves, would directly benefit from Trumpian tax cuts and deregulation.
However, Trump 2 poses a threat to the economy, greater than a second Biden presidency. In 2016, many observers, including this magazine, worried about the consequences of Trump’s economic populism, but the United States enjoyed strong GDP and job growth. This time, however, the economy is closer to its speed limits, meaning tariffs and deficit-financed tax cuts would trigger an inflationary spike. If Trump were to deport illegal immigrants en masse, as he has promised, he would only increase the pressure.
Furthermore, tax cuts would put a strain on public finances, which are already in crisis. In 2016, the budget deficit was 3.2% of GDP and net debt was 76% of output; Currently, the United States has an underlying deficit of 7% and debt is approaching 100%. The Federal Reserve would be forced to offset the stimulus by raising debt service costs. If Trump were to appoint a flexible ally to lead the Federal Reserve when its current president’s term expires in 2026, the inflation problem could become even more serious.
Schwarzman has cited the spread of anti-Semitism as one of the reasons for his decision. However, far from being a college leftist, Biden is one of the protesters’ targets. Both political extremes have a problem with anti-Semitism. When far-right torchbearers marched through Charlottesville during Mr. Trump’s first term, they chanted “Jews will not replace us.” If Mr. Schwarzman is concerned about extremism, he should consider Mr. Trump’s ties to the mob that attacked Congress on January 6, 2021.
In fact, Trump despises many American institutions besides elections, including federal agencies and the courts. Considering the risk of something going very wrong, supporting him offers little benefit. A slide towards cronyism or bias would make doing business more difficult and more politicized, and would pose a much deeper threat to American prosperity than slightly higher taxes or cumbersome bureaucracy. Ordinary Americans may have concluded that Trump is the choice of practical people interested in results. The real message is that it shouldn’t be like this.
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