Donald Trump's campaign is reportedly in financial trouble. Small donations are well below the pace of 2020. Trump's large rallies haven't brought in his biggest cash cows. Some big donors are hesitant, in part because they fear (with good reason) that their money will be used to pay for litigation rather than campaigns. There he has been wooing right-wing billionaires.
It remains to be seen how successful he will be, but at least some billionaires are using the Justice Department to cash in on a man who has tried to overturn the last election and has made no secret of his authoritarian intentions. It seems very likely that this will be provided. He went after his political opponents, rounded up millions of illegal immigrants, and sent them to concentration camps and other locations.
That begs the question. Why would a billionaire support someone like that?
After all, they are not suffering under President Biden. Economists, myself included, often remind people that the stock market is not the economy. Low unemployment and rising real wages—both of which, by the way, the Biden economy delivers, even if many people don't believe it—are more relevant to most people's lives.
But stock prices are probably a far better indicator of what's going on with the ultra-wealthy, who hold large amounts of financial assets. And in 2020, Mr. Trump predicted that stock prices would plummet if Mr. Biden won, but in reality, the market has hit record highs under the current administration.
So why support a candidate who more or less promises to cause social and political chaos?
One simple answer is that if Mr. Trump wins, the wealthy will almost certainly pay less in taxes and businesses will be less regulated than if Mr. Biden were to remain president.
If you believe, as some on the left, that Republicans and Democrats are fundamentally the same, that they both serve the interests of corporations and elites, you are wrong. Despite what prominent Republicans say, the modern Democratic Party is neither Marxist nor socialist. But he has a track record of raising taxes on the wealthy to pay for social programs. In particular, the Affordable Care Act used new taxes to pay for health care subsidies for high-income individuals.
These new taxes resulted in an increase in the effective federal tax rate for the highest income group of 0.01 percent of the population. President Barack Obama redistributed income far more than many people realize. By contrast, President Trump passed massive tax cuts that benefited the wealthy and largely reversed Obama-era effective tax increases. (Why do people still call Trump a populist?)
Mr. Biden is now proposing significant tax increases on corporations and the wealthy. And we don't even need to pass a bill presiding over a tax increase. Most of the provisions of the Trump tax cuts expire at the end of next year unless Congress renews them.
But I would argue that the prospect of tax cuts alone is not enough for billionaires to support Trump.
After all, how important is extra money to people who already live incredibly luxurious lifestyles? My sense from the outside looking in is that among the very wealthy, it's more Earning a lot of money means that prestige, or earning more than other people of your age, is more important than what you can afford. And the important thing about tax increases is that they can't change competition because they apply to everyone. That means your perceived rivals will also take the same hit as you.
And if Trump returns to power, America will be a much scarier place, and it will matter a lot more to billionaires than a few percentage points in tax rates.
But do they understand it?
Last year, when I wrote about my tech fraternity's brief infatuation with Robert F. He pointed out that in many cases, people do not know much more about the world than most members of the general public. The danger that Trump poses to American democracy is, or should be, obvious. But this may be less obvious to people who think that because they are wealthy, they know better and are surrounded by close friends who assure them that they know better.
Consider the case of Elon Musk. Need I say more?
And even billionaires who are aware of President Trump's authoritarian tendencies, if they think about it for a moment, perhaps imagine that their wealth protects them from the arbitrary exercise of power. I suspect that there are.
They should learn from the experience of the Russian oligarchs who helped put President Vladimir Putin in power, but they won't. They eventually discovered that once you installed a dictator, wealth wasn't the shield you thought it was and could still be sent to Siberia. And before you say that such worst-case scenario thinking can't apply to America, keep in mind that the Trump alarmists were mostly right and the apologists were mostly wrong. I'm old enough to remember President Trump's former acting chief of staff writing, “If he loses, Trump will graciously concede.''
So can Mr. Trump win the support of billionaires? probably. If he wins, will they regret their choice? My guess is they will, but by then it will be too late.
