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Throughout American history, business leaders have been able to assume that an American president of either party would uphold the rule of law, defend property rights and respect the independence of the courts. Implicit in that assumption is a fundamental belief that the country’s ethos meant their enterprises and the U.S. economy could thrive, no matter who won. They could keep their distance from the rough-and-tumble of campaign politics. No matter who won, they could pursue long-term plans and investments with confidence in America’s political stability.
In this election, American business leaders cannot afford to stand passive and silent.
Donald Trump and his Democratic opponent, Vice President Kamala Harris, have sketched out versions of their parties’ traditional positions on issues like taxation, trade and regulation that are well within the give-and-take of politics. In this election, however, stability itself is also at stake.
Mr. Trump denies the legitimacy of elections, defies constitutional limits on presidential power and boasts of plans to punish his enemies. And in these attacks on America’s democracy, he is also attacking the foundations of American prosperity. Voting on narrow policy concerns would reflect a catastrophically nearsighted view of the interests of American business.
Some prominent corporate leaders — including Elon Musk, a founder of Tesla; the investors David Sacks and Bill Ackman; and the financier Stephen Schwarzman — have been supportive of Mr. Trump’s candidacy. Beyond pure cynicism, it’s nearly impossible to understand why.
Business leaders, of course, may be skeptical of Ms. Harris’s policies, uneasy because they don’t feel they know enough about how she would govern or worried that she may not be open to hearing their concerns — a frequent criticism of the Biden administration. They may be reluctant to offend or alienate employees, customers or suppliers who have different political views. Most of all, they may be afraid of angering Mr. Trump, who has a long track record of using the levers of power to reward loyalty.
They should be more afraid of the consequences if he prevails.
This week Donald Trump provided a stark reminder that this election is different. In remarks that ought to alarm any American committed to the survival of our democratic experiment, the Republican nominee again refused to commit to accepting the results of the 2024 election. That comes on the heels of remarks in which he declared that he regards his political opponents as an “enemy from within” and that he would consider deploying the military against them merely for opposing his bid for the presidency. The implication is that participation in the democratic process is treason, and the threat is a fresh indication that if he is elected to a second term, Mr. Trump intends to deploy government power in new and dangerous ways.
Mr. Trump may seem like a novelty in American politics, but he is a familiar type in the broader sweep of world history. Right-wing populists often win elections by promising pro-business policies that will unleash economic growth. Once in office, however, they don’t just fiddle with the knobs; they break the machinery. They undermine economic stability by attacking and delegitimizing people and institutions, inside or outside the government, who might challenge or correct bad economic decisions. Turkey’s president, Recep Tayyip Erdogan, for example, fired three central bankers in two years, all of whom failed to fall in line with his demand to lower interest rates. The country fell into a currency crisis and eventually had to raise interest rates significantly to drag itself out.
“It is this change to the nature of governing, more than individual policies, that is so dangerous to business over the long term,” as Roberto Foa and Rachel Kleinfeld argued recently in Harvard Business Review. “Populists undermine the operating environment capitalism depends on — most notably, free competition and a predictable rule of law.”
Mr. Trump’s attacks on the integrity of federal data and on government experts are examples of the ways in which he already pursues these strategies. In August, for example, he claimed that a routine revision in employment data issued by the Bureau of Labor Statistics was manipulated to favor his opponent. Michael Strain, a conservative economist at the American Enterprise Institute, called this attack on the integrity of the agency “grossly irresponsible and completely inaccurate.”
Business leaders often say they hate uncertainty about taxes and regulation even more than they hate taxes and regulation. Mr. Trump is the personification of uncertainty. During his four years as president, he demonstrated an alarming willingness to rewrite federal policies abruptly, out of spite, for favoritism or just on a whim. Planning to develop a property or make an acquisition that needs regulatory approval? Businesses might assume that a second Trump administration would be more supportive than Mr. Biden was or Ms. Harris would be. But a populist’s favor is capricious; there’s no way to predict who might end up on a Trump enemies list or why. Building a factory to make parts for electric vehicles? Counting on suppliers in other countries? Good luck.
Even by a traditional policy scorecard, Mr. Trump would do damage to American business. The candidate’s promises of tax cuts and regulatory leniency also must be weighed against other campaign proposals that are clearly not in the interests of American business. He has proposed large tariffs on imports, which would raise costs for companies that rely on foreign suppliers and could revive inflation. He has proposed large-scale deportations of immigrants, which would deprive businesses of needed workers and consumers. He has threatened to meddle in the Federal Reserve’s management of monetary policy. His proposed tax cuts would add trillions to the federal debt, which could drive up borrowing costs for the government and the private sector.
Executives who convince themselves that they can shape Mr. Trump’s decision making should consider the record of everyone who has tried to ride the tiger in the eight years since he emerged as the leader of the Republican Party. Those expecting his instincts to be tempered by advisers, as sometimes happened during his first term, will be disappointed. His inner circle has been purged of people who say no. In a second Trump term, the secretary of state would not come from Exxon, and the secretary of the Treasury would not come from Goldman Sachs. The smart — and courageous — people have left the room. What remains are loyalists and ideologues and a decision-making process that begins and ends with the question of what is most expedient for Mr. Trump.
As president, he treated the wide-ranging powers of the federal government as instruments to reward friends and to punish enemies. According to a 2019 report by Jane Mayer of The New Yorker, Mr. Trump repeatedly pressured the Justice Department to block the merger of AT&T and Time Warner because he was mad at CNN, a Time Warner subsidiary at the time. Last month he threatened to prosecute Google because, he said, the company “has illegally used a system of only revealing and displaying bad stories about Donald J. Trump.”
And he is not the man for moments of crisis. His management of the government’s response to the Covid pandemic was disastrous. On China, his confrontational showmanship and his dismissive treatment of potential allies did nothing to improve America’s strategic position. Is there any reason for public confidence in the ability of a Trump White House to wrestle with the ever more thorny and high-stakes issues posed by artificial intelligence technology?
The questions run deeper, however: Is Mr. Trump honest? Is he willing to listen or learn? Does he demonstrate moderation or equanimity under pressure? Does he take the long view? Does he ever put the American public interest first?
Mr. Trump is not running as a champion of business. He is running as a tribune of populist grievance, committed to short-term gratification without regard for long-term consequences. For business leaders, as for other Americans, the responsible and necessary course is to defend American democracy by publicly opposing his candidacy.
Source images by Scott Eisen and AWesleyFloyd/Getty Images
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