Chartbook 287: After the verdict: American money and Donald Trump
“I’m a very innocent man,” said Donald Trump moments after a jury of his peers unanimously pronounced him guilty on all counts. There, in a nutshell, is the reality facing America. One of its two main White House contenders is a felon whose campaign is based on claiming the system is rigged. The Republican party’s nominee now joins his former campaign manager, senior political adviser, chief White House strategist, and national security adviser as a convicted criminal. The jury’s speed and unanimity leave little doubt about the watertightness of the verdict. … No matter what his lawyers advise, Trump’s court of appeal will be the US electorate. On Thursday, a New York jury showed that no man is above the law. Their fellow Americans could over-rule that in November. A majority of the country’s highest court (The Supreme Court) are siding with Trump. But the only court that matters now is the polling booth. Until then, it is premature to say the US system is working.
Source: Ed Luce FT
Ed Luce’s column in response to the Trump verdict brilliantly lays out what is at stake following the guilty verdicts. In the upcoming election in the USA, the basic mechanics of democracy and the rule of law itself will be put the test. Donald Trump has openly declared that he seeks his vindication at the ballot box. And he has also made abundantly clear that he will accept only one outcome from the election.
Ultimately, it will be individual voters that decide the outcome of the poll. But in modern American democracy, before you get to the polling booth there is the political economy of the campaign in which what counts are not votes but dollars. A staggering $16.4bn were spent on the Federal Elections in 2020, including $6.5bn for the presidential race.
Source: Open Secrets
Both sides race each other to gather donations big and small. These provide a map of political alignment, money and power in American society. In the current moment they also map the relationship between interests and the very principles of the US constitution.
What happens between the New York verdict and the scheduled inauguration day on January 20 2025 will be a comprehensive test of American society that centers on the individual choices of those 244 million citizens who are eligible to vote. But it goes well beyond them.
I referred to inauguration day January 20th 2025, not election day November 5th 2024 as the real end point of this struggle, because if the election outcome is disputed, as it may very well be, societal forces beyond the courts and the ballot box, will again come into play. This is what we witnessed between November 2020 and January 2021, when a large coalition of powerful interest groups mobilized to secure Joe Biden’s inauguration against Trump’s efforts to overturn that election outcome.
Law is a mechanism, but it is built by societal forces and has to be set in motion by them.
In an often overlooked but significant act, on election day, November 3 2020 America’s main labour union the AFL-CIO and its traditional antagonist, the American Chamber of Commerce, representing business, along with Dr. Barbara Williams-Skinner leader of the National African American Clergy Network came together to issue a joint declaration demanding that the electoral count be conducted with the full respect of the law. Organized capital and labour, insofar as they exist in 21st-century America, together with community leaders, declared their common interest in the functioning of due process and the constitution.
Looking back, it is an open question whether this kind of corporatist rallying around the US constitution would have happened if the Democratic President elect had not been Joe Biden but Bernie Sanders. The question was never put to the test. And that was not by accident. One of the factors that motivated the fateful choice of Biden in 2020 was that he was a “safe pair of hands” that would not provoke a business leader to run as a third candidate, splitting the Democratic party vote and opening the door to a Trump reelection.
So the seemingly bipartisan, republican mobilization around the constitution in 2020 had as one of its unspoken conditions a narrowing of the range of political choice, to exclude the left. In American politics at this moment, left-right antagonism, personalities, different conceptions of social order, social interests and the mechanisms of the legal machinery are all simultaneously in play.
Furthermore, choices are path-dependent. Choices made in 2024 will depend on the whole chain of events since 2016. And for all of this multi-dimensional complexity, the amazing thing is that polling is neck a neck. America seems almost evenly divided between the two sides.
So how, after Trump’s guilty verdict, will American money, business, corporate interests - capital in the widest sense - line up in this decisive battle for America’s political future?
The first thing to say - to break out for a moment of the liberal bubble of outrage - is that Trump and his devout followers have their own theory of constitutional crisis.
For them, the fact that Trump - “a very innocent man” - was on trial at all, signifies a blatant and disastrous politicization of the law.
The other version of this Trumpian diagnosis of crisis is more cynical. Rather than insisting on Trump’s innocence, it argues that America is a swamp shot through with quid pro quos, deals, evasions, routine and not-so-routine illegalities etc. Trump is a player in this swamp. He openly boasts of avoiding tax, as far as he possibly can. But, Trump is just one player amongst many. Joe Biden and his entourage, like the Clintons before him are all “crooked” too. Everyone “in the know” understands these facts about American life. Everyone who is anyone “plays the game”. The crisis consists in the fact that Democrats in a sanctimonious fashion are choosing to victimize Trump, and weaponize the law against him whilst overlooking the peccadilloes of their own side.
Agree or not, these narratives have a powerful attraction on Trump’s supporters. Their first reaction to the guilty verdicts was to swamp the Republican fund-raising sites with donations, causing at least one of them to crash.
Nor is it merely smaller donors who responded in this way. Several donors in the million-dollar range have publicly declared that following the verdicts they will double down on Trump. As Alexandra Ulmer reports at Reuters
In a flurry of support on Thursday, mega donors including casino billionaire Miriam Adelson and hotelier Robert Bigelow lined up behind Trump, with their donations set to bolster a wave of pro-Trump ads, door-knocking and phone banking in battleground states. The verdict also spurred some longtime Trump donors to boost their financial support for Trump - and, in at least one case, make a big donation to him for the first time.
Does the felony conviction not put them off you might ask? Perhaps. But most Americans, especially rich Americans, regards the courts, part through experience and part through lore, not as neutral places for the finding of truth or justice, but as arenas of “lawfare”. If Trump lost a battle, it is time to rally around and to make doubly sure that he wins the war.
If we look more closely at the entourage of Trump’s mega donors they are a mixed bunch. Much of Trump’s support comes from a handful of super wealthy individuals who oppose Biden and support Trump for reasons which have nothing immediately to do with their own fortunes, or with the economy.
A ProPublica examination of a group of donors who started giving significant sums of money to the Republican cause, only after Trump’s victory in 2016 identified several overlapping cliques. One clique are true believers in the theory of the “big lie”, such as the members of the Fancelli grocery fortune that paid for the ill-fated rally on January 6th 2021. Another, distinct group of mega donors are followers of online conspiracy theories of various kinds who put their fortunes, acquired through business or inheritance behind the many cooky ideas that Trump has taken up at one point or another. Then there are personal followers of Trump, including wealthy lawyers, golfing buddies etc.
It is, in short, a motley crew. But that is all it takes. America has a lot of rich people and you only need a handful, however ill-assorted, to raise the hundreds of million of dollars necessary to get a Presidential campaign off the ground.
Then there are the truly heavy hitters. Casino billionaire Miriam Adelson, wife of the late Sheldon Adelson who died in 2021, has anchored very large-scale fund-raising for Trump. Steve Schwarzman the multi-billionaire founder of Blackstone private equity group was an early backer of Trump. He dropped out in 2017 after Trump’s failure to condemn the Charlottesville white supremacist rally. But now Schwarzman is back. According to the FT
In a statement, Schwarzman cited “the dramatic rise of antisemitism” as part of the reason for returning to Trump’s camp, adding that he believed President Joe Biden’s policies were misguided. “I share the concern of most Americans that our economic, immigration and foreign policies are taking the country in the wrong direction,” Schwarzman said in a statement on Friday. “For these reasons, I am planning to vote for change and support Donald Trump for president.”
Schwarzman is a pivotal figure. Despite his particular motivations, where his money goes, others will follow.
Hedge fund billionaire John Paulson is a similarly influential figure. He recently hosted an event for Trump in Palm Beach Florida that brought in $50 million at a sitting. The event was attended by long-standing Republican mega donors like hedge-fund investor Robert Mercer and his daughter and conservative activist Rebekah, plus investor Scott Bessent, and casino mogul Phil Ruffin.
All of the players on this list already have giant wealth. Political donations make up a tiny fraction of their outgoings. Peanuts in most cases. They mobilize around Trump out of a general sense of support for his vision of America, and fears they claim to harbor about the kind of America that might emerge if the Democrats retain the White House. This touches their wealth. And a Trump presidency will be good for their fortunes. But the motivations are primarily political in a broader sense.
If we look for people whose businesses are tied up more directly with their support of Trump, it is tempting to look to finance or to big oil and gas interests. An interview with the FT is typical:
A senior corporate lawyer in New York said Trump was also making inroads with disillusioned Democrats on Wall Street. “The Democratic party’s messaging has been terrible,” said the lawyer, who asked to remain unnamed for fear of criticism from friends and colleagues. “Wall Street Democrats are still pro-capitalism,” he added. “Unfortunately, you have a lot of far-left folks who have hijacked the party . . . they don’t understand what it takes to win the country.” Trump would be a “no-brainer for our industry . . . we’ll get richer if he wins”, said a private equity executive who manages tens of billions of dollars in the media, tech and retail sectors. “But I can’t make my views public because I’ll get immediately cancelled . . . many of our customers would immediately start boycotting the services and products sold by our portfolio companies,” the executive added.
No such inhibitions constrain business people who back Trump outside big liberal cities like New York.
As Michael Cuenco points out in UnHerd, a huge amount of ink has been spilled over working-class Trumpism. And even more on every single Trump billionaire. But in doing so, in focusing so much on the extremes, the working class and the ultra-rich, we often ignore the vast majority of people who are rich in modern America. We don’t see the forest for the trees. We ignore what has become known as the “American gentry” (Wyman).
There are 140,000 people who earn more than $1.58 million per year - rich by any definition. They are not, on the whole tech of finance wizards.
As Alexander Sammon put it in an excellent report for Slate:
Auto dealers are one of the five most common professions among the top 0.1 percent of American earners. Car dealers, gas station owners, and building contractors, it turns out, make up the majority of the country’s 140,000 Americans who earn more than $1.58 million per year.* Crunching numbers from the U.S. Census Bureau, data scientist and author Seth Stephens-Davidowitz found that over 20 percent of car dealerships in the U.S. have an owner banking more than $1.5 million per year. And car dealers are not only one of the richest demographics in the United States. They’re also one of the most organized political factions—a conservative imperium giving millions of dollars to politicians at local, state, and national levels.
What Patrick Wyman writing in The Atlantic in 2021 dubbed “the American gentry” are a core constituency for Trump:
The reality of American wealth and power is … banal. The conspicuously consuming celebrities and jet-setting cosmopolitans of popular imagination exist, but they are far outnumbered by a less exalted and less discussed elite group, one that sits at the pinnacle of the local hierarchies that govern daily life for tens of millions of people. Donald Trump grasped this group’s existence and its importance, acting, as he often does, on unthinking but effective instinct. When he crowd about his “beautiful boaters,” lauding the flotillas of supporters trailing MAGA flags from their watercraft in his honor, or addressed his devoted followers among a rioting January 6 crowd that included people who had flown to the event on private jets, he knew what he was doing. Trump was courting the support of the American gentry, the salt-of-the-earth millionaires who see themselves as local leaders in business and politics, the unappreciated backbone of a once-great nation. … These elites’ wealth derives not from their salary—this is what separates them from even extremely prosperous members of the professional-managerial class, such as doctors and lawyers—but from their ownership of assets. Those assets vary depending on where in the country we’re talking about; they could be a bunch of McDonald’s franchises in Jackson, Mississippi; a beef-processing plant in Lubbock, Texas; a construction company in Billings, Montana; commercial properties in Portland, Maine; or a car dealership in western North Carolina. Even the less prosperous parts of the United States generate enough surplus to produce a class of wealthy people. Depending on the political culture and institutions of a locality or region, this elite class might wield more or less political power. In some places, it has an effective stranglehold over what gets done; in others, it’s important but not all-powerful. …. An enormous number of organizations and institutions are dedicated to advancing the interests of this gentry class: chambers of commerce, exclusive country clubs and housing developments, the American Society of Concrete Contractors, and fruit growers’ associations, just to name a small cross section. Through these organizations and their intimate ties to local and state politics, the gentry class can and usually does wield significant power to shape society to its liking. It’s easy to focus on the massive political spending of a Sheldon Adelson or Michael Bloomberg; it’s harder, but no less important, to imagine what kind of deals about water rights or local zoning ordinances are being struck across the U.S. on the eighth green of the local country club.
As Sammon showed in his analysis of the car dealing lobby in the United States, their prosperity and power depends crucially on collective action to defend their assets at the national level. Car dealerships in the United States are a business defined by exclusive relationships with car manufacturers that until the arrival of Tesla managed to shut out direct sales from producer to consumer. This “industry” does not have a choice as to whether or not to engage in politics and lobbying, its huge mark ups depend on defending its monopoly power. Their wealth, livelihoods, status, identity, position in society depends on political action.
The crucial question is which politicians most clearly understand those interests. And it is obvious that Trump and the GOP do. This is not a matter of sophisticated economic ideology. They are not defending naive notions like “the free market”. They are defending an interest and they hurl their weight behind the Republican side, not as a matter of political whim, as Schwarzman or Paulson do, but because their lives depend on it.
As Wyman describes it, the rally accordingly.
Power resides in gated communities and local philanthropic boards, in the ownership of staggering numbers of fast-food franchises, and in the smooth transmission of a large construction company’s assets to a new generation of small-yacht owners. Power can be found in group photos of half-soused, overweight men in ill-fitting polo shirts, and in the millionaires ready and willing to fly their private jets to Washington, D.C., in support of a certain would-be authoritarian. The yeoman developer of luxury condominiums, the single-digit-millionaire meatpacking-plant owner, the property-management entrepreneur: These were the people who, remembering or inventing their tradition of dominance over their towns and cities, flocked to Make America Great Again. As much as the United States loves to think of itself as an egalitarian paradise open to talent of any stripe, hierarchy and local power are no less the American way.
Stalwart in their defence of Trump in January 2021, what reason is there to believe that this social formation will defect over a “partisan judgement” in a “rigged” New York courtroom, over a small matter of hush money?
Compared either to the motor cruiser mob or the handful of billionaires pursuing their personal hobbyhorses, Trump’s run in 2024 puts corporate America in a far more difficult position.
As Jeffrey Sonnenfeld of Yale comments in Time magazine:
The hunches that CEOs are enthusiastic for Trump’s return are not based upon any stated first-hand endorsements from CEOs. I have worked closely with the nation’s top 1000 CEOs for over 40 years. Trump support has plummeted to virtually zero among major CEOs and they largely want nothing to do with him now. At the same time, there is no incentive for them to condemn him in the absence of any current abuse of power, but they did not hesitate to do so before and, I feel sure, will not hesitate to speak out again should he act up. … I have known Trump personally for 20 years … he is not friendly with many major business leaders, and few saw him as a genuine peer—since he had not ever run a major global public company …
As Sonnenfeld points out, money talks. Most corporate leaders in the USA are Republicans by basic political preference. But as American politics has polarized and the Republican party has become dominated by populism (starting with Sarah Palin), corporate leaders no longer choose to express their personal politics through donations. Whereas 42 percent of the Fortune 100 leadership contributed to George W. Bush’s reelection in 2004, Trump has received virtually zero personal support from America’s corporate leadership.
Source: Time
As a well known business professor at Yale University, Sonnenfeld was personally involved in convening large groups of American CEOs after the contested election of November 2020 and following the January 6 2021 riot, at which corporate leaders condemned the attempted overturning of basic legal processes.
As Molly Ball describes it in Time, there was, in the autumn of 2020, something akin to what she, rather unfortunately, describes as a “conspiracy” that
both curtailed the protests and coordinated the resistance from CEOs. Both surprises were the result of an informal alliance between left-wing activists and business titans. The pact was formalized in a terse, little-noticed joint statement of the U.S. Chamber of Commerce and AFL-CIO published on Election Day. Both sides would come to see it as a sort of implicit bargain–inspired by the summer’s massive, sometimes destructive racial-justice protests–in which the forces of labor came together with the forces of capital to keep the peace and oppose Trump’s assault on democracy.
There is a reshuffle going on in the culture of US corporate capital. It may be true that the majority of American corporate leaders are Republican, but the shade of their Republicanism is markedly different from the bright red of MAGA.
As Sonnenfeld observed, the effort to stop Trump’s coup in 2020-2021,
underlined a generational shift taking place in the collective civic attitudes of the CEO class. Its effects are evident in Washington, where Big Business’s longtime alliance with the Republican Party is foundering. Congressional Republicans have divorced the Chamber of Commerce; the GOP’s corporate fundraising is diminished; Fox News anchors and conservative firebrands rant about “woke capital” and call for punitive, anti-free-market policies in retaliation. Many of the companies and business groups that implacably resisted Barack Obama have proved surprisingly friendly to Biden, backing portions of his big-spending domestic agenda and supporting his COVID-19 mandates for private companies. Political observers of both parties have tended to attribute these developments to the pressures companies face, whether externally from consumers or internally from their employees. But Sonnenfeld, who is in a position to know, argues that just as much of it comes from the changing views of the CEOs themselves.
Tellingly, though 75 percent of CEOs identified as Republican, in 2016 75-80 percent supported Hillary Clinton.
But, as much as personal preference, this may be a more fundamental matter of organizational sociology and culture. You can’t run a big organization either with extreme political polarization or without respect for basic legal and administrative procedures. The CEO of Expensify put it in memorably crisp terms when he appealed in the fall of 2020 to the 10 millions users of his expense account software to vote for Joe Biden because “not many expense reports get filed during a civil war.” Has Max Weber’s point about calculation and stable rule ever been made more succinctly?
The dilemmas for corporate capital begin when we move from dark scenarios of civil war or insurrectionary overthrow, to more normal matters of policy and regulation. For many businesses it is hard to argue that a Republican administration, whether headed by a convicted felon or not, will be better for profits, at least in the short-run. And profits is what they are devoted to delivering.
At a gathering of oil men convened at Mar-a-Lago a few weeks ago, Trump casually suggested that a billion-dollar donation would be a cheap price to pay for getting him elected, given the benefits he intends to shower on the oil and gas industry. It was borderline illegal. You aren’t allowed to sell policy quite this openly. A Senate committee is investigating. But the business-men in the room will have gotten the message.
American oil and gas interests have done brilliantly well under the Biden administration, but Trump is offering them even more windfalls with fewer strings. It would be surprising if, regardless of his criminal record and his disregard for the constitution, Trump did not dominate fund-raising, influence-pedaling and votes in much of the oil patch.
In finance on Wall Street, the C-suite is much changed. It has become more diverse and significantly more aligned with the Democratic Party. This began at the latest in the 1990s with Rubin’s central role in the Clinton administration. Jamie Dimon, the leading banker of his generation, took a knee in 2020. His seemingly positive comments about Trump early in 2024 were taken out of context and misinterpreted. Far more telling is his famous quip that running a bank in the modern age requires the assistance of a psychiatrist and a lawyer. A Trump presidency only makes that double dilemma worse.
But for finance too, it is clear that banking regulation under the Democrats has been more onerous than it would be under Trump. It is telling that the further you get from New York - you only need to go as far as New Jersey or Long Island - and the further you get from the big banking side of finance, the more support for Trump rises. It is not by accident that some of Trump’s most important big money support comes from hedge funds and private equity, who are far less constrained by the polite conventions of corporate America than are big banks.
The same logic of differentiation within the business community applies in the tech world as well. The big tech names - the Microsoft, Apples etc - remain politely aloof from the fray until they have actually to deal with a Trump administration. Then, of course, they get down to business. The overwhelming majority of tech staff lean Democratic and donate accordingly. But a handful of prominent names in Silicon Valley, not necessarily the biggest, but big enough to make a substantial difference to campaign fund-raising, have come out ostentatiously in favor of Trump, as if to burnish their credentials as “outsiders” and mavericks. Furthermore, they are encountering less resistance as they come out into the open:
Jacob Helberg, a senior Palantir executive who gave hundreds of thousands to Biden’s 2020 campaign, recently announced a $1mn donation to the Trump campaign. He said the former president’s border policies and his pro-Israel and anti-China stance were behind his switch from the Democratic party. “When people like Palmer [Luckey], myself or David Sacks are openly out in support of Trump, we’re not facing the same kinds of reactions and backlash that we would have eight years ago,” said Helberg.
Of course from the point of view of the Biden administration this is all very frustrating. They don’t see themselves as in any way hostile to American business. On the contrary. The administration has defended every kind of American business every way it can.
What Bidenomics wants to deliver is decent conditions for workers and consumers, fair competition and far-sighted investment in America’s future. All of this in the long-run would be good for the American economy, society and business. As they would see it, their only conflict with US business is over the question of whether one takes a long or short-term, a broad or a narrow view of self-interest. And at least certain sections of American organized business fully understand this.
But it does not securely anchor them in supporting Biden, even when the constitution is clearly at stake. It simply means that they are already preparing to defend the bits of Biden’s legislation that they like, from a Trump onslaught.
Startlingly as Politico reported, the Chamber of Commerce and the American Petroleum Institute have announced that they will will seek to defend particular parts of Biden’s signature climate policy, the Inflation Reduction Act:
Two of Washington’s most powerful Republican-leaning industry groups are gearing up to defend President Joe Biden’s climate law if the GOP retakes the White House next year — setting up a potential collision between big business and a future Trump administration. The U.S. Chamber of Commerce and the American Petroleum Institute largely opposed the Inflation Reduction Act two years ago, when Congress passed it entirely with Democratic votes. Both groups have railed against major aspects of Biden’s climate strategy, especially his efforts to change rules on federal environmental reviews and pause natural gas export approvals. But the IRA also contains hundreds of billions of dollars in tax breaks and spending that could benefit key members of both powerhouse trade groups — including money for advanced manufacturing of clean energy technologies. Oil companies in particular have expressed interest in potential business opportunities offered by the climate law, such as projects that would produce hydrogen fuel and capture and store carbon dioxide.
“Business is going to defend the Inflation Reduction Act,” said Christopher Guith, senior vice president at the Chamber’s Global Energy Institute, adding that the Inflation Reduction Act is instrumental for “energy security, competitiveness, and the business case for the energy transition.” API President Mike Sommers told POLITICO’s E&E News at a Houston energy conference in March that the oil and gas lobby was ready to fight to keep parts of the law intact — pointing specifically to the hydrogen and carbon capture tax credits. “We’ll work vigorously to ensure that the provisions that we support in the IRA sustain during a potential Trump administration,” he said, adding: “This has always been a bipartisan organization. The industry is bipartisan.”
It is striking how this defensive action combines big buzzwords such as “the energy transition” - borrowed from the Biden team - with the defense of specific tax credits. There are even charts quantifying the precise portions of the Inflation Reduction Act that bring benefits to particular combinations of industrial interests.
These data map out the terrain on which legislative battles may well be fought. But in the current moment they also map out the terrain over which interest groups must maneuver as they line themselves up for the electoral campaign ahead.
In the event that Trump gets in, what you about is not constitutional niceties but the process of legislative and administrative dismantling which will cannibalize the Biden legacy. You want to be part of that process. You want to be in the room. If there is a chance that Trume will win, and the odds are looking good right now, then, however distasteful Trump may be, you have to engage.
Big business can live with rules - the right kind of rules. It may even become attached to them. But, above all, business interests like a winner. There is nothing they hate more than being on the losing side. They may see it as being in their interest to uphold due process. But don’t count on them, if the going gets rough.
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