How Pascal's Wager explains support for Donald Trump
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Business leaders who support Donald Trump for president might be doing so because they think he'd be better for business — or they might be supporting him because they want favorable treatment from any future Trump administration.
Why it matters: A key question in any presidential election is which candidate would be better for the economy. One problem with asking CEOs is that they have an incentive to support Trump even if they think Biden is the better candidate.
Between the lines: Trump, more than any other U.S. politician, is open about the way he favors individuals who publicly demonstrate personal loyalty to him, through statements, donations, fundraisers, and the like.
- Business leaders who support Trump do not need to fear being punished should Biden win in November. Biden's team of economic technocrats don't play favorites.
- Conversely, however, any leader who endorses Biden for president can reasonably assume that Trump might carry a grudge against them into the White House.
How it works: Trump has not laid out detailed economic policies, but tariffs in general, and much higher tariffs on China, in particular, are emerging as a central part of his vision.
- Because tariffs can differ markedly between industries and even between products within an industry, CEOs with the ear of the president would be well placed to garner a competitive advantage by lobbying to minimize the adverse effects on their own companies.
Flashback: Pascal's Wager is an argument for believing in God because (oversimplifying massively) believing in God is a good thing if God exists, and makes no difference if God doesn't exist.
- A similar argument exists for supporting Trump: that it will prove helpful if he's elected, and it won't be harmful if he isn't.
Zoom out: Trump's first term in office was, broadly, good for business and for markets. So was Biden's.
- There's a lot more uncertainty surrounding a possible second Trump term, however, than there is surrounding a possible second Biden term — and business generally likes certainty and predictability.
For the record: "President Trump is focused on rebuilding an economy where hardworking Americans can once again live the American Dream, and he understands business leaders have an important role to play in that effort," said the Trump campaign in a statement to Axios.
- "Business leaders and working families alike are eager for the return of common-sense policies that will lift up all Americans."
The bottom line: When a business leader says that they're supporting Trump because he'd be good for business, it's not easy to tell whether they're saying that because they believe it — or whether they're saying that because they want to be able to cozy up to Trump in the event he's elected.
