Wall Street’s bargain with Trump

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The Financial Times had only nice things to say about Benito Mussolini in a June 1933 supplement entitled “The Renaissance of Italy: Fascism’s gift of order and progress”. Trains were running on time, investment was humming and friction between capital and labour was a thing of the past. “The country has been remodelled, rather than remade, under the vigorous architecture of its illustrious prime minister, Signor Mussolini,” wrote the FT’s special correspondent. 

The 1930s ought to have buried the idea that business is a bulwark against autocracy. Today’s America offers a reminder. After Donald Trump’s attempted putsch on January 6 2021, US business leaders lined up to condemn the storming of Capitol Hill. Jamie Dimon, the chief executive of JPMorgan, issued a statement calling for a peaceful transition of power. “This is not who we are as a people or a country,” he said. In Davos last week, Dimon had changed his tune. Trump did many good things when he was in office, Dimon said. Business was ready for either Joe Biden or Trump: “My company will survive and thrive in both.” 

The US Chamber of Commerce has undergone a similar evolution. “There are some members who, by their actions, will have forfeited the support of the US Chamber of Commerce. Period. Full stop,” said its vice-president, Neil Bradley, in January 2021. The chamber’s ban on giving money to lawmakers who had voted against certifying Biden’s election win was quietly dropped a couple of months later.

In her state of American business speech one year ago, Suzanne Clark, the chamber’s chief executive, did not mention US democracy. Battling “unprecedented regulatory over-reach” by the Federal Trade Commission, the Securities and Exchange Commission and other agencies would be the chamber’s top priority. 

To be fair to Dimon, Clark and other business leaders, they are paid to hedge bets. Were Trump to return to power, they should preserve the option of getting along with him — Wall Street’s “Trump put”. Their duty is to shareholders. If the American people want Trump, who are they to quibble? That argument loses its salience when business leaders start donating to Trump’s campaign, as many are now doing. Some, such as Harold Hamm, the Oklahoma oil tycoon, or Robert Bigelow, owner of Budget Suites of America, invested their money in Florida’s governor, Ron DeSantis. He has quit the race and endorsed Trump. Some of his former donors are doing the same. 

Their reasoning is twofold. First, for all his faults, Trump would be better for business than Biden. Trump cut the top tax rate and improved their bottom lines. He is promising to do the same again. Trump’s railing against corporatism is just red meat for the base. He would also boost the fossil fuel industry and commercial real estate. The assumption of business leaders that Trump will fulfil these promises are almost certainly right. The fact that he vows to slap 10 per cent tariffs on all imports should be weighed against Biden’s continued regulatory creep. To many corporate chiefs, less globalisation is a price worth paying for lower taxes. It seems that almost anything is. 

The second reason is many business leaders argue that Trump’s bark is worse than his bite. People warned about Trump’s threat to democracy in 2017 but the republic is still alive and kicking. I have heard variations on this line from many inside and outside business. It suffers from a fatal flaw: America’s system remains intact because Trump was blocked from overturning it. He still claims the 2020 election was stolen and is running on the promise of jailing those who helped block him — among them Biden and Mark Milley, the then chairman of the US joint chiefs of staff. It is conceivable that Trump would be too chaotic to redeem that promise. On the other hand, he would claim a mandate to do so. Perhaps the courts would stop him. US business would be powerless. 

We learn from history that we do not learn from history, as Friedrich Hegel said. His point applied to our species, not just to business. But it is worth stressing that capitalism goes hand in glove with the rule of law. It thrives on transparency of rules and the sanctity of the contract. Monopolists, on the other hand, hate the level playing field — the one that requires a competent state to uphold. America’s 2024 election will be a battle between liberal democracy and the strongman. It could also be seen as a contest between capitalism and capitalists. Which is better: the system or the aspiring monopolist? No prizes for guessing where Trump’s instincts lie.