WALL STREET turns his back on Donald Trump. In recent days, financiers who had donated hundreds of millions to the Republican Party have publicly withdrawn their support for the former president. On Nov. 16, Stephen Schwarzman, CEO of Blackstone, a private equity firm, said he would support someone from a “new generation” of Republicans in 2024. That same day, Thomas Peterffy, founder and chairman of Interactive Brokers, said the party has a “fresh face.” Ken Griffin, CEO of Citadel, a hedge fund, was the clash. On November 15, he labeled Trump a “three-time loser” and announced his support for Florida Governor Ron DeSantis. Why are donors abandoning the former president — and how much does it matter?
The party’s lukewarm performance in midterm elections on November 8 is an important factor. Republican donors blame Trump for the lack of a widely expected “red wave”. The party won the House of Representatives by only a razor-thin margin and failed to regain the Senate after the candidates Trump had supported lost key races in Arizona, Nevada and Pennsylvania. It wasn’t the first time the former president had stumbled either. In addition to losing the presidency in 2020, the Republicans also lost the Senate in 2021 (after a runoff in Georgia) and the House of Representatives in 2018 — hence Mr. Griffin’s nickname for Mr. Trump.
Wall Street moneymen and Mr. Trump always had a marriage of convenience, says Reed Galen, a former Republican strategist. While they found Mr. Trump’s rhetoric off-putting at times, they believed pro-Wall Street Republicans would be elected to Congress in his wake. That has largely paid off, but many financiers now worry that Trump’s anti-trade and anti-immigrant populism has strengthened the party’s corporate skeptic wing. Because it’s not just Mr. Trump who eschews Reagan’s free-market capitalism these days. DeSantis and JD Vance, the Trump-backed senator-elect from Ohio, have waged a culture war against Disney and big tech.
Still, Wall Street’s rejection may not have a decisive impact on the former president’s bid for re-election in 2024. Many financiers favor Democratic presidential candidates anyway, in part because their industry is concentrated in deep-blue cities, primarily New York. And Trump has triumphed before without money from financiers. During the 2016 Republican primary, he received no money from Mr. Griffin or Mr. Schwarzman, nor from most of the other major GOP donors. In February of that year, Trump had spent just $10 million on television commercials. Ted Cruz, a senator from Texas, spent double that; Jeb Bush, former governor of Florida, spent more than eight times as much. Trump turned his campaign’s financial woes into a populist badge of honor, promised to end pay-to-play politics and attacked Bush for answering “special interests.” He rode to victory on the back of a loyal army of petty lenders. His unpredictability fueled the media coverage: it was basically free advertising.
Trump has already amassed a coffers of about $100 million to fight the 2024 primary. He is still extremely popular with the Republican base. His elected candidates won 91% of the open primary races before the midterm elections, and four of the 10 Trump-backed challengers toppled incumbent Republicans. While donors may get cold feet after the midterms, its popularity will make some reluctant to support another candidate. Despite Wall Street’s reservations, it is still Mr. Trump’s primary election to lose. ■