Trump Catches FIRE

finance, insurance, and real estate

Following the Trump verdict in Manhattan, news and social media are full of claims about outrage and its effect on political fundraising:

We’ll see how much those numbers hold up when we have the campaign finance reports, but there’s clearly a significant victory for the Trump campaign under all the noise. Why is a different question, and I have doubts about the prevailing interpretation of the moment. Bloomberg:

This version of the story is that rich people don’t want to pay taxes:

From longtime supporters to reluctant fellow travelers, a growing number of prominent figures in US business and finance are embracing the possibility of a Trump restoration — criminal conviction be damned.

“This verdict will have less than zero impact on my support,” Omeed Malik, president of 1789 Capital and a co-host of the Pierre fundraiser for Trump, said as he processed the news Thursday evening. Echoing Trump and Republican leaders, Malik characterized the entire hush-money trial as a “weaponization of the legal system” and “jurisdictional justice.”

This much is certain: Some financiers who abandoned Trump after his supporters stormed the US Capitol on Jan. 6, 2021 — and kept their distance as he continued to claim falsely that the 2020 election was stolen — are now throwing their weight behind him again.

A big reason, in a word: money. Trump has promised to cut taxes for the wealthy and eliminate regulations. President Joe Biden wants the opposite.

I doubt that very much, because this explanation doesn’t speak to the timing: 1.) After the verdict in Manhattan, 2.) financiers are turning their support to Trump, 3.) because they want lower taxes.

They didn’t want lower taxes before the verdict?

My quite strong suspicion is that Leticia James and Alvin Bragg have caused alarm by targeting business records and real estate valuations in corporate borrowing, things that everyone shares in finance, insurance, and real estate, for criminalization and destructive litigation. My bet is that capital is turning hard against lawfare, seeking to disincentivize and punish an attack on the basics of corporate business. People in business are horrified by a flamethrower of a prosecution over old business records.

So Bloomberg’s interpretation is that Wall Street is standing with Trump despite the verdict, but my bet is that Wall Street, Silicon Valley, and other business interests are turning against Democrats because of the verdict — because Democratic prosecutors in New York (and especially Manhattan), America’s financial capital, are doing things like turning seven year-old business record misdemeanors into a long list of Frankenstein felonies.

That interpretation makes capital’s support for Trump self-interested rather than morally outraged, though not over Bloomberg’s explanation of lower taxes, as people who keep business records turn against the party that bizarrely overcriminalizes the handling of business records when the target becomes politically unfashionable. If capital turns against the Democratic Party — if the ATM machine stops spitting out campaign funding — the moment becomes pretty significant, and Alvin Bragg becomes the dog who caught the car.

We’ll see.