The folly of the pro-Trump plutocrats
Many billionaires and business people support Donald Trump. That is no surprise. He would be good for profits, they believe. He offers lower taxes and less regulation. Some have argued that certain policies of his — the tax cuts and toughness on China and freeriding allies, for example — were not foolish. Moreover, unlike most Democrats, Trump and the Republican party like business and business people. Why should they not embrace him in return?
Even looked at rather narrowly, this does not make much sense. In office Democrats have frequently been rather good for business. The financial crisis of 2007-09 occurred under the watch of a Republican administration. The stock market has boomed (and bust) under both Democrats and Republicans. So has the share of profits in US GDP. Trust in government collapsed in the 1960s and has, since then, gone up and down under both parties.
Moreover, Trump’s economic policy preferences are surely dangerous in current circumstances. He cannot understand the value of an independent central bank and despises tight monetary policies. He promises to cut taxes, although deficits and debt are on a perilous path. He plans to launch a trade war against the world, not just China. He has even suggested that tariffs could replace income tax. Might this work? As a blog for the Peterson Institute for International Economics states: “Simply put, no. Tariffs are levied on imported goods, which totalled $3.1tn in 2023. The income tax is levied on incomes, which exceed $20tn; the US government raises about $2tn in individual and corporate income taxes at present. It is literally impossible for tariffs to fully replace income taxes.”
Biden may be old. But Trump is crazy and, alas, he is not amusingly crazy: he is dangerously crazy. Trump’s instincts are also those of a dictator. That has been quite clear since he entered politics. But this time around, unlike in 2016, he has people around him with a programme for dismantling the state and the constitution. Moreover, argues Robert Kagan, in his brilliant book Rebellion, the peril is not new. As he explains in a podcast with me, liberal ideas have been embattled throughout the history of the republic, notably in the civil war. But Trump’s charisma as a leader makes this time especially dangerous.
The crossing of the Rubicon occurred in 2020 and 2021 when Trump not only denied that he had lost the election, but acted to overturn the result. While he failed, his party is now fully behind his election denial. As I have previously noted, his ability to define truth for his followers is an example of Führerprinzip — the idea that the leader defines the truth. Republicans who denied the lie of the stolen election have been discarded. The guardrails have all failed: he is the presumptive Republican candidate and is quite likely to be re-elected as president.
What then? Trump has already announced that the president is above the law, a proposition that some members of the Supreme Court seem to find credible. Some party leaders too hold that he is not subject to the law. He has also embraced the goal of revenge.
An executive operating above the law can do anything. Once he has loyalists running the armed forces, FBI, intelligence services, tax service and justice department, he can do whatever he wants to anybody. He can harass, humiliate, bankrupt and imprison his enemies, as he wills. Who will stop him? Only brave people would even try.
If Trump loses, he will surely claim, with Republican support, to have won. That could cause chaos. If Trump wins, his supporters will start the cleansing of the “deep state”, by which is meant those loyal to the republic, not to him personally. Thereupon many other things could happen, including the rounding up and expulsion of perhaps as many as 11mn illegal immigrants. That could split the country violently and dangerously.
The reaction of most business people to such fears is likely to be that this is mere alarmism. Trump is old, they will say. He will feel vindicated, not vengeful, and will quietly bask in his reinstatement. Nothing much will change in Washington. The majesty of the law will remain largely unscathed. The guardrails of the republic will hold.
We must fervently hope that this view is right. But two questions still arise. The first is whether it makes sense to run the risk? What if the downside is at least partially correct? What is the upside to set against it? Yes, Biden is too old and, yes, the administration has made mistakes, notably over immigration. But it has been far from a catastrophe. The second question is what does the precedent imply? Assume that Trump ultimately turns out to be “full of sound and fury, signifying nothing”. Is that the end? Will the opening to authoritarianism he is busily creating be closed? Or will someone else try to go through it?
Law-governed, liberal republics are always fragile. They are not so much protected by institutions, as by the values and courage of the people who run those institutions and of those who hold positions of influence in society. This includes those in business. It is natural to believe that the games of business or politics are safe. But both depend on the institutions of the state. It is naive to expect that they will survive all attacks.
As I argued back in 2016, when Trump first emerged, the US is much the most significant republic since the Roman empire. The fact that the US, with its vast scale and secure geography, was created as a republic is the main reason why democracy emerged as a dominant political system out of the great upheavals of the 20th century. Trump, however, is an American Caesar. His return is a risk nobody should wish to take.
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