One thing we can say for sure about Joe Biden’s three and half years in office: it’s been a very rewarding time to be an American capitalist. Since the end of 2020, the S. & P. 500 has risen by nearly fifty per cent, and the companies in the index have seen their earnings per share nearly double. Big banks, hedge funds, and private-equity funds have all made bumper profits; the Financial Times recently reported that “founders and top executives of the largest private equity groups in the US have seen the value of their shares rise by more than $40bn since the beginning of 2023.” The swelling tide has also benefitted many investors and executives in the tech sector. According to the Institute for Regional Studies, a Silicon Valley research group, the market capitalization of companies based in the Valley reached $14.3 trillion last year, and “venture capital funding reached an astounding $30 billion.”
How grateful is the capitalist class to Biden for presiding over this showering of riches? In certain cases, not grateful at all, it seems. In the past few weeks, the political media has been awash with stories about Wall Street bigwigs and tech barons throwing their support behind Donald Trump, whom some of them disowned following the January 6, 2021 assault on Capitol Hill. Back then, the billionaire Stephen Schwarzman, who is chief executive of the Blackstone Group, a big private-equity shop, denounced the attack as “appalling and an affront to the democratic values we hold dear as Americans.” Last month, Schwarzman issued a statement: “I am planning to vote for change and support Donald Trump for president.” The Financial Times reported that Bill Ackman, the billionaire hedge-fund manager who campaigned to have Claudine Gay removed as Harvard’s president over her handling of pro-Palestinian campus protests, is soon likely to throw his support behind Trump, too.
On the West Coast, meanwhile, David Sacks, a tech investor and associate of Elon Musk, recently held a high-priced fund-raiser for Trump in the Pacific Heights neighborhood of San Francisco, not far from where Nancy Pelosi lives. Sacks said that the event attracted a hundred people and raised twelve million dollars. Musk himself met with Trump in Palm Beach, on March 3rd, the Wall Street Journal reported. As yet, the world’s richest man doesn’t appear to have donated to Trump’s campaign. But, according to the Journal, the two have been “developing a friendly rapport and talk on the phone several times a month as the election nears.”
In interpreting these developments, it’s important to note that, until very recently, Trump was running well behind Biden in over-all fund-raising. According to figures collated by OpenSecrets, a nonpartisan organization that tracks money in politics, by the middle of May the Trump campaign and groups associated with it had raised about two hundred and forty-four million dollars, whereas the Biden campaign and its affiliates had raised more than three hundred million. In terms of individual industries, Trump had raised considerably less money than Biden from the tech sector, the latest data from OpenSecrets indicates. In the financial and energy sectors, however, Trump had a big lead: about sixty-four million dollars compared with about forty-one million.
In this context, Trump badly needed to raise more money, especially since his campaign was burning through large sums on his legal bills. They appear to have turned things around. The campaign and the Republican National Committee say that, in May, they brought in a hundred and forty-one million, a third of which came through online donations in the hours after a New York jury convicted Trump of dozens of felonies connected to hush money paid to the adult-film actress Stormy Daniels before the 2016 election. These fund-raising numbers aren’t confirmed yet. Both campaigns are due to file their latest figures with the Federal Election Commission later this week. But, when I got on the phone with Scott Bessent, a Republican hedge-fund manager who has recently co-hosted fund-raisers for Trump in South Carolina and Palm Beach, he told me that the shift to Trump in the financial world was palpable.
“I think the Wall Street guys were always coming back,” Bessent, who has been mentioned as a possible Treasury Secretary if Trump gets elected, said. “It was just a matter of when.” When I asked whether taxes, regulations, or economic policy were the main underlying factors, he said, “All of the above, and more.” Bessent, who used to be the chief investment officer at the family office run by the Democratic megadonor George Soros before founding his own firm, Key Square Capital, said that Trump’s conviction acted as an “accelerant” to the process of Republican donors returning to the fold. There’s a feeling, he said, that “the Leviathan could come for you.” Bessent was speaking from London, where, the previous evening, he had hosted another Trump fund-raiser, at which Donald Trump, Jr., was present. I asked him what he would say to people who consider it outrageous for rich people to donate large sums of money to a candidate who tried to overthrow American democracy. “I reject that he tried to overthrow democracy,” Bessent replied. “And I haven’t seen Marc Elias or Jaime Harrison”—the Democratic election lawyer and the chair of the Democratic National Committee, respectively—“say that they will honor the result on November 5th if Trump wins.”
Trump’s fund-raising efforts have included brazen solicitation of donations from individuals and business interests that have big stakes in regulatory decisions. Last month, the Washington Post reported on an April meeting that Trump had at his Mar-a-Lago estate with senior executives from the energy industry. According to the Post story, Trump said that if he was reëlected he would reverse Biden Administration policies that have restricted oil and gas drilling in the Arctic and frozen export permits for liquefied natural gas. In pressing the energy executives to donate to his campaign, he told them that “(g)iving $1 billion would be a ‘deal’ . . . because of the taxation and regulation they would avoid.”
Given this sort of influence peddling, it’s hardly surprising that Trump has outraised Biden in the energy sector. In courting Wall Street, Trump’s fund-raising appeals perhaps haven’t been quite as explicit. Nonetheless, they have been pretty clear. Under Biden, the Securities and Exchange Commission, run by Gary Gensler, has pursued a broad reform agenda, which has included suing crypto exchanges for acting as unregistered brokers and introducing new disclosure requirements with respect to climate change and other issues for all public companies. Trump “has been saying publicly and privately that he’s going to gut the regulatory agencies, fire Gary Gensler, and eliminate a lot of reporting requirements,” Charles Myers, the chairman and founder of Signum Global Advisors, a financial advisory firm, and a longtime donor for Democratic candidates, told me. “All that does have appeal to some folks in the financial-services sector.”
Kathryn Wylde, the president of the Partnership for New York City, an organization that represents many of the city’s C.E.O.s, said to Politico that some Republican business leaders had told her that “the threat to capitalism from the Democrats is more concerning than the threat to democracy from Trump.” I contacted Wylde to ask her why the business leaders felt this way, and she sent me a statement from Joe Biden on the latest monthly jobs report, which accused Republicans of “siding with Big Oil to raise utility bills, letting Big Banks rip off Americans, and blow(ing) up the debt by slashing taxes for billionaires.” Wylde also wrote me a note that said, “The rhetoric coming out of the White House about banks, billionaires and corporations helps explain why some business executives are concerned and may be giving to Trump. The specific pain points that I hear mentioned regarding frustration with the Biden administration have to do with regulatory actions of the FTC, DoJ, and SEC . . . My sense is that taxes are not the primary issue.”
Under the Biden appointees Lina Khan and Jonathan Kanter, the Federal Trade Commission and the Department of Justice have sued a number of corporate behemoths, including Amazon, Google, and Live Nation-Ticketmaster, on monopoly grounds. Wylde, in her note, pointed to Biden-era antitrust actions against companies that she said “are clearly not monopolistic in the classic American definition.” She cited the Justice Department’s lawsuit to block a merger between JetBlue and Spirit, and the F.T.C.’s lawsuit to block a fashion-industry merger that would have combined the Coach, Kate Spade, and Michael Kors brands. In both of these cases, the regulators argued that the proposed deals would eliminate competition and hurt consumers.
Doubtless, the Biden Administration’s long-overdue effort to enforce antitrust laws more aggressively has enraged some Republican corporate leaders and financiers. But tax policies play a role here, too. Trump has repeatedly promised to extend many of the giveaways that the 2017 G.O.P. tax bill bestowed on corporations and high earners, and, in a meeting with members of the Business Roundtable last week, he promised even more tax cuts. By contrast, Biden, in a second term, would almost certainly let many of the 2017 giveaways lapse to raise taxes and reduce the budget deficit. In addition, Biden has proposed other tax hikes targeting the very, very rich. His 2023 budget, released last year, called for an annual levy of twenty-five per cent on the unrealized capital gains of fortunes larger than a hundred million dollars. His 2025 budget proposes raising the corporate tax rate and requiring billionaires to pay at least twenty-five per cent of their income in federal taxes.
Trump wouldn’t do any of these things. Simply by occupying power, therefore, he would serve the immediate financial interests of the one per cent, and, indeed, the 0.001 per cent, which is where the likes of Schwarzman and other billionaires reside. That, as much as anything, explains why more big donors appear to be padding the coffers of the Trump campaign despite the fact that most of them have made out very well under Biden. But their support for Trump could well prove shortsighted. Many of the policies that he and his advisers are openly or privately floating—imposing much higher tariffs on imported goods; carrying out mass deportations of undocumented workers; and engineering a devaluation of the dollar—could raise prices throughout the economy and lead to an inflationary spiral. Larry Summers, the Harvard economist and former Treasury Secretary who criticized the Biden Administration’s spending policies during the pandemic, recently pointed to the “real risk during a Trump Presidency that we would again see mortgage rates above ten per cent.” If that happened, the broader economy would surely tank, corporate profits and financial markets would be hit, and many of America’s business leaders, Republican and Democrat, would be left looking back wistfully to the Biden era. ♦