From Wall Street to Silicon Valley, a growing number of billionaires, tech titans and venture capitalists are backing Donald Trump’s campaign for president, among them Stephen Schwarzman, chairman of Blackstone, the world’s largest private-equity fund, Steve Wynn, the casino tycoon, Bill Ackman, the hedge fund manager, and Marc Andreessen, a leading venture capitalist.
But many business school professors and historians are issuing stern warnings about this business support for Trump, saying that backing him could backfire badly for business and endanger America’s democracy. These professors caution that corporate America – along with everyone else – should be hugely concerned about a candidate who has talked of being a dictator on day one, terminating the constitution, and weaponizing the justice department to exact revenge against his critics.
Jeffrey Sonnenfeld, senior associate dean at the Yale School of Management, said it’s important to recognize a disconnect in the business world – while dozens of billionaires are backing Trump, not one CEO of a Fortune 100 company has given money to Trump’s campaign, according to public records. Sonnenfeld said that a major reason CEOs of major corporations have balked at backing Trump is they realize that many of their shareholders might grow enraged if they support an authoritarian-minded candidate whom even JD Vance, Trump’s running mate, once called “America’s Hitler”.
“If your life depended on it, you can’t name a Fortune 100 CEO who has given a penny to Donald Trump,” Sonnenfeld said. “The corporate titans are hired hands, and they have to pay attention to their constituencies: shareholders, investors, employees, customers, community.”
With Tesla ranking 40th in the Fortune 100, Sonnenfeld noted that despite Elon Musk’s endorsement of Trump and despite reports that he had pledged to donate $45m a month to Trump, Musk has vacillated and denied making that pledge. Moreover, public records show that Musk has not donated to Trump’s cause, although he has created a pro-Trump Super Pac.
Billionaires generally feel far more untouchable and less constrained than CEOs about donating to Trump, Sonnenfeld said. By one count, more than 60 billionaires have donated to Trump’s campaign. They include Bernard Marcus, a co-founder of Home Depot, the Winklevoss twins, who founded the crypto exchange Gemini, and Nelson Peltz, an activist investor who recently endorsed Trump even though he, shortly after the January 6 assault on the Capitol, said he regretted voting for Trump in 2020. Timothy Mellon, an heir to the Gilded Age Mellon fortune, recently gave an astronomical $125m to a Trump Super Pac, while Miriam Adelson, majority owner of the Las Vegas Sands casino company, has donated $5m to help Trump’s campaign and is expected to give tens of millions more.
“There are a lot of extremely wealthy financiers who, out of a tortured sense of self, are rallying around Trump,” Sonnenfeld said. “Many of them are very senior and thirsting for attention.”
Many billionaires have donated to Trump because they are eager for the big tax cuts for the ultra-wealthy that he is promising and because they have been unhappy with Joe Biden. Notwithstanding Kamala Harris’s emergence as the Democratic presidential nominee, the Trump-supporting billionaires are sticking with him. A few billionaires have quickly lined up behind Harris, among them, Reid Hoffman, the LinkedIn co-founder, and Mark Cuban, a billionaire entrepreneur and television personality.
Witold Henisz, vice-dean of the Wharton School, questioned the wisdom of billionaires and business executives backing Trump. “The best info they have is what happened in the last Trump administration,” Henisz said. “They got tax breaks, and nothing really terrible happened. The world didn’t end.”
Sounding like the professor of management that he is, Henisz added: “That’s a mispricing of the tail risks.” In other words, they are failing to properly weigh the long-term risks. Henisz said the tail risks include worrisome threats to democracy and judicial independence. “Markets aren’t really good at pricing that,” he said. “The ultimate tail risk is change in political institutions that makes the US more authoritarian and less democratic, with restraints on media freedom and the political use of tax authorities and the judicial system” against people and corporations Trump dislikes.
Henisz warned of additional risks from Trump, pointing to his plan to reduce the Federal Reserve’s independence, which could push up inflation, and his pledge to deport more than 10 million immigrants, which, Henisz said, would push up labor costs “and seriously hurt the image of the United States in the world”.
Another disquieting warning comes from Daniel Ziblatt, a Harvard political scientist and co-author of the book How Democracies Die. “These business leaders are being myopic,” Ziblatt said. “It’s in their long-term interest and enlightened self-interest to operate in a democratic political system. They may think they’re heading off risks [by supporting Trump], and they don’t want to be on the wrong side of this election.”
Ziblatt warned business leaders that authoritarianism often stunts economic growth. “There’s good social science evidence that economic growth is strongest in democracies. There are more innovations,” he said.
Ziblatt added that “there’s a more fundamental argument” beyond economic self-interest: “Democracy is the only political system in the world where one can get rid of a leader if they don’t like that leader. That’s such a fundamental point. The idea that you would risk giving this up is incredibly short-sighted.”
Trump’s business and billionaire backers support him for numerous reasons. When Blackstone’s Schwarzman announced his support for Trump in May, he said: “I share the concern of most Americans that our economic, immigration and foreign policies are taking the country in the wrong direction.”
Taxes are another reason many billionaires favor Trump. Not only has Trump pledged to renew the huge tax cuts for the rich and corporations that he signed into law as president, but he recently said he would further slash the maximum corporate tax rate to 15% from the current 21%. That’s down from 35% when Trump took office. (Democrats hope to raise it to 28%.) Trump’s wealthy backers also like that he supports a lower estate tax; they hated Biden’s call for a “wealth tax” on households worth over $100m.
Many billionaires and business executives are also upset about the Biden-Harris administration’s tougher climate regulations, enthusiastic embrace of labor unions, and aggressive enforcement of antitrust laws, especially against the nation’s tech giants – even as many executives applaud Biden’s successes on infrastructure and increasing manufacturing.
Other billionaires backing Trump include Howard Lutnick, chairman of the Cantor Fitzgerald financial services firm, Illinois industrialists Richard and Elizabeth Uihlein, John Paulson, a hedge-fund manager, and Joe Ricketts, founder of TD Ameritrade. David Sacks, a Silicon Valley entrepreneur, hosted a June fundraiser that raised $12m for Trump. and Jon Lonsdale, co-founder of Palantir Technologies, a data analysis company, has also donated to Trump. (Many tech executives are attracted to JD Vance, who worked for Peter Thiel’s Mithril venture capital firm after Yale Law School. Thiel, a Palantir co-founder, donated $15m to Vance’s Senate campaign in Ohio.)
Dean Sonnenfeld points out that many of the best-known names in tech – Mark Zuckerberg, Tim Cook, Sheryl Sandberg, Bill Gates, Laurene Powell Jobs, Larry Page, Sergey Brin – have not endorsed Trump.
“Business leaders supporting Trump may regret it later,” warned Anat Admati, a professor of finance and economics at the Stanford Graduate School of Business and director of its Corporations and Society Initiative. “The business leaders who fund or endorse Trump might face a backlash coming from employees, customers, or the public, so they are taking a big risk.”
Admati voiced concern that some Silicon Valley and other business leaders are backing Trump even though his plans “appear to follow an authoritarian playbook in which the tools of democracy are used to destroy democracy, concentrate power and avoid checks and balances.”
“Rich and powerful people who want to gain more wealth and power may be making a bargain because Donald Trump might help their short-term personal objectives,” Admati added. “They may also fear he might target them or their companies if they challenge or fail to support him. It’s a cynical calculation, but it can backfire.”
Many corporate executives haven’t forgotten Trump’s tirades, threats and apparent retaliation against various corporations. Some business executives are supporting Trump because they are scared of him, several professors said, while some refuse to back him because they’re appalled by his past acts of revenge against corporations.
Some examples: after Trump grew angry at the way CNN covered him, he apparently retaliated by pushing to block a merger between AT&T and Time Warner, CNN’s parent company at the time, badly hurting both companies. Amazon lost a $10bn cloud-computing contract with the Pentagon, with many business analysts attributing that loss to Trump’s dismay with Jeff Bezos over his ownership of the Washington Post. Trump aides denied that.
“There is a strategy for getting along with Trump, and that’s being absolutely loyal and servile,” said John Coffee, a corporate law professor at Columbia Law School and director of its Center on Corporate Governance. Coffee added that many executives support Trump because they, “love someone who wants to just walk through the jungle and everyone parts the way for him. Trump is a bully. He wants the world to adjust to what he wants. A lot of CEOs have that same outlook.”
Timothy Ryback, a historian who wrote Takeover: Hitler’s Final Rise to Power, warns America’s business leaders that they should be mindful of what happened in Germany in the 1930s. Even as Ryback emphasized that it’s not fair to “draw equivalencies” and say Trump is a modern-day incarnation of Adolf Hitler, he added: “You can say there are some unsettling parallels, first of all in the rhetoric.
“If there is any lesson here for the American business titans queueing up to invest in Trump,” Ryback added, “it would be to take the man at his word, including his plan for a day one dictatorship and a program of vengeance against his political opponents. As with Hitler, there should be no illusions about Trump’s determination to make good on his campaign promises.”
Ryback noted that some prominent German corporations that backed Hitler and his war effort are still seeking, eight decades later, to fully cleanse themselves from that taint.
Jerry Davis, a professor at the University of Michigan’s Ross School of Business, said that some billionaires and business executives don’t seem terribly worried about the things Trump has said he would do. Davis warned that some Trump policies could get ugly and that some corporations could get entwined in that ugliness. What happens if Trump seeks to build internment camps as part of his plan to deport millions of immigrants and asks some prominent corporations to build them?
“If Stephen Miller [a top Trump adviser on immigration] sets up camps in the desert and puts a lot of people whose skin is a darker hue there – that’s pretty explicitly what they have in mind – what will this mean for business?” Davis said. “Can corporations make nice with someone like that?”
Dean Sonnenfeld contrasted this year’s election, when Fortune 100 CEOs haven’t backed the Republican nominee, with past elections, when roughly half of CEOs gave to Ronald Reagan and both Bushes. “It’s zero now,” Sonnenfeld said, noting that many CEOs are unhappy with Trump’s denial of the 2020 election results and role in the January 6 assault on the Capitol.
Sonnenfeld said “it bothers me” that some Wall Street and tech executives are supporting Trump. “They should know better,” he said. “It’s the future of democracy we’re talking about here. I can’t imagine anything worse than to go back to what happened in our parents’ lifetime.”
He said that many CEOs are refusing to back Trump because of his disdain for the rule of law, because of his protectionism and vows to impose hefty tariffs, and because of his isolationism, which undermines corporate hopes for a smoothly running global economy. “They really hate Trump’s divisiveness and his belief in wedge issues and constantly stirring up anger and hatred,” Sonnenfeld said. “Whether it’s out of personal values, patriotism or a sense of shared identity, CEOs don’t want employees pointing fingers at each other and shareholders battling with each other. Trump likes to keep everyone on edge. It’s destabilizing.”