Business Leaders and Trump: Navigating Benefits and Political Risks

A growing number of billionaires from various industries, including Wall Street and Silicon Valley, have thrown their support behind Donald Trump’s 2024 presidential campaign. Among them are prominent figures like Stephen Schwarzman, chairman of Blackstone, casino tycoon Steve Wynn, hedge fund manager Bill Ackman, and venture capitalist Marc Andreessen. However, while these high-profile endorsements are notable, there’s a divide within the business community, with some experts warning that such support may carry long-term risks for both business and democracy.

Jeffrey Sonnenfeld, senior associate dean at the Yale School of Management, points out that while many billionaires are rallying behind Trump, no CEOs from Fortune 100 companies have made financial contributions to his campaign. Sonnenfeld suggests that corporate leaders may be hesitant to align themselves with Trump, given potential backlash from shareholders, employees, and customers. “CEOs have to navigate complex relationships with multiple constituencies,” Sonnenfeld notes. “They are more cautious about openly supporting a candidate who has made controversial statements about the rule of law and democracy.”

Elon Musk, CEO of Tesla and SpaceX, has expressed support for Trump but has not made any official financial contributions, according to public records. Despite reports of a significant donation pledge, Musk has vacillated on the matter, though he has helped create a Super PAC supporting Trump.

For many of Trump’s billionaire backers, lower taxes and deregulation are key motivators. Trump has promised to extend the tax cuts he implemented during his presidency and further reduce the corporate tax rate. His supporters argue that his policies will stimulate economic growth and maintain America’s competitive edge.

However, business school professors like Witold Henisz, vice-dean of the Wharton School, caution that this support may overlook significant risks. “Business leaders might be focusing on the immediate benefits, like tax breaks,” Henisz said, “but they may be underestimating the longer-term risks to democracy and the economy.”

Henisz highlights concerns about Trump’s stated plans to reduce the Federal Reserve’s independence and enact stricter immigration policies, which could drive up labor costs and harm the U.S.’s global standing. “The market isn’t great at pricing in the potential long-term impacts of political instability,” Henisz explained. “There’s a risk that policies weakening democratic institutions could eventually harm economic growth and innovation.”

Daniel Ziblatt, a Harvard political scientist and co-author of How Democracies Die, believes that supporting authoritarian-leaning candidates may ultimately backfire on business leaders. “There’s evidence that democracies tend to be more stable environments for economic growth,” Ziblatt said. “Authoritarian regimes can create uncertainty, which stifles innovation and long-term planning.”

Ziblatt adds that one of the fundamental strengths of democratic systems is the ability to replace leaders who are no longer serving the public effectively. “Giving that up for short-term gains could prove to be a short-sighted decision,” he said.

Historian Timothy Ryback, author of Takeover: Hitler’s Final Rise to Power, draws cautionary parallels between the support business leaders gave to authoritarian regimes in the past and the present situation. Ryback warns that Trump’s rhetoric, particularly his talk of instituting sweeping changes on “day one” of his presidency, should be taken seriously by those considering backing him. “While it’s not a direct comparison, there are enough unsettling similarities to give business leaders pause,” Ryback said.

Many prominent figures in the tech industry, including Mark Zuckerberg, Tim Cook, Sheryl Sandberg, Bill Gates, and Larry Page, have refrained from supporting Trump’s campaign, highlighting a broader hesitancy among certain sectors to align with him.

Anat Admati, a professor of finance and economics at Stanford University, voices concerns about the implications of supporting Trump, particularly as he’s made statements that suggest he may challenge democratic norms. “There’s a potential backlash for business leaders who openly support Trump,” Admati said. “Their employees and customers may question their alignment with someone who has proposed policies that could concentrate power and undermine democratic institutions.”

Admati also points out that some business leaders may feel compelled to support Trump out of concern for their own companies. “Some may fear retaliation if they don’t align themselves with Trump,” she added, referencing past incidents where companies faced public rebuke from Trump over political disagreements.

While some Wall Street executives back Trump’s promises of tax cuts and deregulation, others remain wary of his polarizing leadership style. Many CEOs are concerned that Trump’s divisive rhetoric could create conflict within their own organizations and broader business communities.

“Trump’s unpredictability and tendency to stoke division make him a risky choice for many in corporate leadership,” Sonnenfeld said. “CEOs are looking for stability and predictability, not turmoil.”

Ultimately, business leaders supporting Trump must weigh the potential for short-term economic gains against the risks to democratic stability and the potential for long-term backlash. As history shows, aligning with controversial leaders can carry significant and lasting consequences.