In the wake of the Jan. 6 attack, there were some prominent billionaires who kept their distance from Donald Trump, but that period has apparently come to an end. As Politico reported this week, many “high-dollar donors at banks, hedge funds and other financial firms” have re-embraced the presumptive Republican nominee, thanks in large part to his plans to cut taxes and weaken financial industry safeguards.
The article included this memorable quote:
Kathy Wylde, president and CEO of the Partnership for New York City, a nonprofit organization that represents the city’s top business leaders, said Republicans have told her that “the threat to capitalism from the Democrats is more concerning than the threat to democracy from Trump.”
Before we consider the latter half of that quote, it’s worth pausing to appreciate the oddity of the idea that Democrats represent a “threat to capitalism.”
For those of us who have a passing familiarity with reality, capitalism has done exceptionally well under Democratic administrations of late. In fact, in the last 35 years, there have been six presidents: three Democrats and three Republicans. In each of the GOP administrations, there was a recession. In each of the Democratic administrations, there were far stronger economies: more robust job growth, higher GDP, and healthier stock-market gains. It’s a track record that seems highly relevant to those voting with economic concerns in mind.
But it’s also worth dwelling on those who are willing to discard “the threat to democracy from Trump.”
I’ve had some differences with Anthony Scaramucci, a hedge fund executive who briefly served as Trump’s White House communications director in 2017, but his response to Politico this week rang true.
“You need a democracy to have effective capitalism,” Scaramucci said. “If you don’t, you get cronyism. You get oligarchy. You get crony capitalism. You get arbitrary and capricious administration to the law, which reduces people’s tendency to invest in your country.”
It’s an important point. I realize there will be some — on Wall Street and off — who look at the 2024 presidential race and effectively say, “Democracy is all well and good, but I’m more concerned about my wallet.”
That calculus is misguided, in part because Trump is unlikely to deliver the economic utopia he’s promising — he’s already failed once — and in part because moving away from democracy is inherently bad for the economy.
The Washington Post’s Catherine Rampell had a great column on this last month, explaining, “Those who would trade democracy for economic gain would get neither.”
[D]emocracies tend to be better at a whole bunch of things critical to economic flourishing, such as maintaining the rule of law; protecting property rights; providing public goods (education, public health, infrastructure); ensuring policymakers are accountable to all citizens (not just their cronies); and resolving disputes via compromise rather than violence. (Violence, you might have heard, is not great for business.)
“U.S. business titans might think they’re trading democracy for financial gain,” Rampell concluded. “In reality, they’re gambling both.”
The New York Times’ Jamelle Bouie came to a similar conclusion in his latest column, adding, “The truth is that regimes of corrupt, personalist rule — in which authoritarians wield the state to reward friends, punish enemies and secure their fortunes — are much less prosperous than the alternative.”
Even if greed were the sole motivating factor for these “high-dollar donors at banks, hedge funds and other financial firms,” the quicker they are to downplay the importance of democracy, the more they’re putting their own bottom lines at risk.