Donald Trump is offering a corrupt deal to America’s wealthy elites: He’ll give them tax cuts and deregulation if he’s elected to a second term, even though he’s signaled that he intends to govern as an autocratic leader unrestrained by the rule of law.
That would be a deal with the devil that’s likely to end badly for everyone—even the corporate elite, many of whom remain in a state of denial about Trump.
Daniel Ziblatt, director of Harvard’s Center for European Studies, has studied what happens when conservative elites ally with authoritarian movements, which happened during Adolf Hitler’s rise to power in Germany.
In a podcast, Ziblatt told The New Republic’s Greg Sargent:
”The historic record is pretty clear that where political leaders threaten to do things that are anti- democratic they try to implement this. I think that economic elites are naive, shortsighted and in fact reckless to think that there is not a probability that some of this stuff will happen.
“At the end of the day nobody wants to live in a system in which there’s high levels of instability, where there’s frequent investigation and prosecution of political opponents. Again this leads to instability and a kind of crony form of capitalism. …
“Business requires the rule of law. And if you are going to rely on the good will of somebody who has shown himself to be incredibly impulsive and not constrained by the rule of law that to me sounds like a really reckless bargain.”
At a $50 million fundraiser on April 6 at the Palm Beach home of billionaire hedge fund investor John Paulson, Trump promised to extend his 2017 tax cuts that mostly benefited big corporations and the wealthy. Many of the tax cuts are set to expire in 2025.
President Joe Biden wants to continue tax cuts for families making less than $400,000, but opposes extending tax cuts or restoring tax breaks for those making more than that. He also believes that any extensions should be offset by raising taxes on big corporations and the wealthy so they pay their fair share.
Biden has also upset the corporate elite by being a more proactive regulator. The Justice Department and Federal Trade Commission have engaged in an aggressive antitrust crusade. And Biden’s National Labor Relations Board has pursued a pro-union agenda.
At the fundraiser, Trump also ranted about migrants “coming in from prisons and jails … coming in from … countries that are a disaster.” Trump lamented that there was a surge of migrants from Latin America, rather than from “nice countries” like Denmark or Switzerland.
Co-chairs of the fundraiser included other big-time GOP donors, including hedge fund billionaire Robert Mercer and his daughter Rebekah, oil tycoon Harold Hamm, hotelier Robert Bigelow, and casino mogul Steve Wynn.
But what’s more alarming is that one of the most powerful persons in corporate America, JPMorgan Chase chairman and CEO Jamie Dimon, a longtime Democratic donor, praised Trump’s economic policies in a CNBC interview while attending January’s World Economic Forum in Davos, Switzerland.
Dimon said:
“Take a step back, be honest. He was kind of right about NATO, kind of right on immigration. He grew the economy quite well. Trade tax reform worked. He was right about some of China.”
“He wasn’t wrong about some of these critical issues, and that’s why they voted for him.”
Asked which candidate would be better for his business, Dimon said, “I have to be prepared for both. I will be prepared for both. We will deal with both.”
But in his annual letter to shareholders released earlier this week, Dimon referred to the “extreme suffering of the Ukrainian people.”
“America’s global leadership role is being challenged outside by other nations and inside by our polarized electorate,” Dimon wrote. “We need to find ways to put aside our differences and work in partnership with other Western nations in the name of democracy. During this time of great crises, uniting to protect our essential freedoms, including free enterprise, is paramount.”
Now what world is Dimon living in where he can’t speak out directly about the threat to our democracy posed by a second Trump term? And this “both sides” hogwash is coming from the man who heads the largest bank in the U.S. and represents the Wall Street establishment.
An article in The New York Times Magazine by Jonathan Mahler was headlined, “Is Corporate America in Denial About Trump? Despite his populist promises, many bigwigs are keeping the faith that it couldn’t really happen here.”
Tax cuts and deregulation have been cornerstone policies of past Republican administrations. JPMorgan Chase saved billions of dollars a year thanks to Trump’s 2017 tax cuts for corporations.
But Mahler warned that “the Davos crowd should be a lot more concerned about a second Trump term” given his more right-wing populist economic agenda for a second term.
“There has been this sense among business leaders that we can work with these people even if they sound kind of revolutionary because they will give us some things that are useful,” Rawi Abdelal, a political economist and professor at Harvard Business School, told the Times. “They are missing that this is a moment of systemic danger for capitalist systems as we know them, and globalization as we know it.”
Trump is advocating a protectionist trade policy that would impose a 10% across-the-board tariff on imports, a 60% tariff on imports from China, and a 100% tariff on foreign cars, CNN reported. This could result in a trade war with China and other countries, which could worsen inflation and kill jobs.
“If Trump increases tariffs as he has proposed, the economy would likely suffer a recession soon thereafter,” Mark Zandi, chief economist at Moody’s, told CNN.
Trump has also pledged to launch “the largest domestic deportation operation in American history,” which would require building mass deportation camps. But the Center for Migration Studies said mass deportations would only exacerbate what is already a severe workforce shortage in a variety of industries such as agriculture, construction, hospitality, and health care, resulting in a drop in the gross domestic product.
And then there’s Project 2025, a far-right blueprint for a second Trump administration, that was drawn up by the Heritage Foundation and other conservative organizations. It proposes firing as many as 50,000 federal workers and replacing them with Trump loyalists. And Project 2025 calls for limiting the Federal Reserve’s ability to serve as a lender of last resort for financial institutions facing cash crunches. Mahler wrote that this would “increase the risk of financial crises, undermining confidence in the U.S. banking system and its financial markets.”
Kim Lane Scheppele, a professor of sociology and international affairs at Princeton University, told the Times that Project 2025 “is a direct copy” of what Hungary’s authoritarian Prime Minister Viktor Orban did when he returned to power in 2010. Last month, the Hungarian strongman visited Trump at his Mar-a-Lago resort.
Orban governed Hungary as a traditional pro-business center-right politician when he first became prime minister in 1998, cutting taxes and reducing government spending, but lost the 2002 election. He returned to power in 2010, reinventing himself as a right-wing populist. Orban was determined not to lose again and learned from his past mistakes about how to work the machinery of government to his advantage, creating an authoritarian regime that he has described as an “illiberal democracy.”
Writing in The New Republic, Hungarian opposition politician Zsuzsanna Szelényi described how Orban modified the election process, leading to massive gerrymandering. He placed his loyalists in every state institution; gave out generous state bank loans to help his cronies buy privately held media; and manipulated public procurements to redirect billions of dollars to selected companies owned by his friends.
Orban also propagated a conservative Christian culture war, demonized and ridiculed his political rivals, and adopted a strong anti-immigration stance. He also tried to block European Union aid to Ukraine.
Sound familiar?
Rachel Kleinfeld, a senior fellow at the Carnegie Endowment for International Peace, wrote on The UnPopulist website that populist-led economies tend to be “more volatile and unpredictable.”
“Populist leaders tend to use market regulation to reward friends and punish enemies,” Kleinfeld wrote. Companies close to Orbán get lucrative government contracts; companies considered enemies become the target of regulatory enforcement and investigations.
American conservatives have already shown that they are ready to do the same. Bud Light faced a boycott after it worked with transgender influencer Dylan Mulvaney. Florida lawmakers voted to remove the Walt Disney Company’s power over a district including the Walt Disney World theme park, after it criticized the “Don’t Say Gay” law backed by Gov. Ron DeSantis. Trump called for a “treason” investigation into MSNBC’s parent company, Comcast.
And Ziblatt warned that if elected, Trump wouldn’t hesitate to have the Justice Department file lawsuits or open investigations against companies whose executives criticize him. Former Trump policy adviser Stephen Miller’s right-wing judicial activist group America First Legal has filed lawsuits against companies including Nike, Disney, United Airlines, the National Football League, and CBS Entertainment for allegedly discriminating against white males.
Kleinfeld wrote:
Populist leaders want power. … What matters is political loyalty, and they use executive and regulatory powers to go after businesses that refuse to bow down. Instead of generating value, the business sector is expected to cater to the whims of a strongman. As the economic costs roll in, they clamp down on free speech, manipulate statistics, and even rig elections to ensure they don’t pay a political price.
Not only the American polity but also the American economy will be in trouble if MAGA populism remains unvanquished.