March 28, 2025
Billionaires Beware: Trump will Hurt You
Philip Kotler
Donald Trump is using his Presidency to take over all the powers of government. He is moving into a dictatorship presumably to make rich people and himself even richer. He wants Congress to lower income taxes on rich corporations and individuals so that they end up richer.
Trump has the support of Old and New Republicans. He has a large following of working-class members who see Trump as promising, lower consumer prices, lower taxes and possibly higher wages. His followers have little or no concern about Trump’s aim to make the rich richer.
One particular class, namely billionaires, will normally be among Trump’s major supporters. Trump supports all the owners of private property. Trump and Elon Musk want to privatize everything. They want to privatize education and health care. They don’t believe that public sector organizations can operate efficiently. They prefer that private companies expand and manage prisons. They hope to eliminate the “entitlements” of Social Security and Medicaid. They would like to put an end to PBS (the Public Broadcasting System) and NPR (National Public Radio). Eventually they might aim to privatize the National Park system.
Trump and Musk want to eliminate the income tax system and replace it with revenue gained from imposing higher tariffs on foreign goods and services. They pressure foreign companies to do more of their manufacturing in the U.S.
Why Billionaires Might Support Dictators
Many billionaires dislike democracy. Democracy puts political power into the hands of millions of voters. Voters in a democracy might favor imposing higher taxes on the rich. The tax money can be used to provide better education and healthcare for the masses. Democrats favor imposing many regulations on businesses to protect the environment, to pay higher wages to workers, to raise the level of real competition.
Billionaires do their best to find and support political candidates who will please them. Billionaires are almost without limits on what they can spend to get their chosen candidates elected. As long as their candidates get elected, these candidates will preserve billionaire wealth and privileges. Billionaires want the electorate to believe that as billionaire wealth grows, it will trickle down to the public.
If a democracy is overtaken by a dictator, the rich will tend to support the dictator. The dictator wants the support of the rich and initially will give them special privileges. The dictator needs the support of billionaires and their assets.
How do Dictators Treat the Rich Over Time
I would make the case that billionaires will initially live well under a new dictator. The dictator would treat billionaires with respect and friendship. The dictator would grant preferential treatment and let billionaire monopoly power to grow. Billionaires will face less regulatory hurdles.
Overtime, however, billionaires will grow increasingly uncomfortable. They would be careful in what they say to others. They must not anger the regime. Billionaires would need the dictator’s approval of major investments projects. The regime may request large sums of money and the billionaires would have to oblige. Billionaires need to worry that the dictator’s regime may be attacked and dismantled. They have to worry that their fortunes may be confiscated to rebuild a democratic state.
True, billionaires have their share of problems in a democracy. They will face higher taxes and regulations. They have to worry about what changing administrations might do to their business. Billionaires need to show high engagement in philanthropy to reduce criticism for being so rich. Billionaires have one major advantage in a democracy. They will have the laws of property on their side rather than the erratic will of a dictator.
Consider the fate of billionaires in some extreme cases. When the Bolsheviks took power during the Russian Revolution, many wealthy business leaders fled and some others who stayed were arrested, executed or sent to the gulags. Consider the fate of some billionaires when Hitler took over Germany. Fritz Thyssen was a wealthy supporter of Hitler but later opposed the regime and fled Germany, only to be captured by the Nazis, imprisoned in a concentration camp, and he lost most of his fortune. Louis Nathaniel von Rothschild, a prominent Jewish banker, was forced to hand over his banking empire to the Nazis. Hugo Junkers, an aviation pioneer, had his company seized by the state, was placed under house arrest, and died under mysterious circumstances.
Clearly billionaires who today support President Donald Trump must be careful. Trump’s hope is to rise to the level of a Putin in Russia or a Xi Jinping in China and rule America. Billionaires have to think carefully about their political preferences. Will they be happier living in a democracy or living under the will of a tyrant?
An Alternative View: Billionaires Can Be Happier Saving the World
Recently I met a billionaire, a man in his mid-thirties. He talked about supporting environmental and social causes. He had worked for a few Silicon Valley companies and started his own company. He mentioned that he recently sold his company for $6 billion.
I learned that he plans to give away a lot of his money as soon as he can find worthwhile causes. He is not interested in sitting on his fortune and letting it grow. He doesn’t see accumulating more money as defining his life objective and making him happier.
How Can an Ernest Billionaire Choose Worthy Social Causes?
Let’s take the case of Mackenzie Scott who divorced the multibillionaire Amazon founder Jeff Bezos in 2019. Mackenzie left her marriage with a fortune worth $37 billion. She chose to join the Giving Pledge organization (started by Bill Gates and Warren Buffett) and she committed to giving at least half of her wealth to charity. She made an extremely large gift of $5.8 billion in 2020; and in 2021, she gave another $2.7 billion. By mid-December 2022, Scott had given a total of $14 billion to over 1600 charitable organizations. Her gifts focused on racial equality, LGBTQ, democracy, climate change, Covid, and college grants. Her team’s focus was on “identifying organizations with strong leadership teams and results, with special attention to those operating in communities facing high projected food insecurity, high measures of racial inequity, high local poverty rates, and low access to philanthropic capital.”
Billionaires with an urge to help others to live a better life need guidance given the millions of social cause organizations. The most comprehensive classification of meaningful social causes is found in the United Nation’s 17 Sustainable Development Goals. Here are the 17 social causes:
1. No poverty
2. Zero hunger
3. Good health and wellbeing.
4. Quality education
5. Gender equality
6. Clean water and sanitation
7. Affordable and clean energy
8. Recent work and economic growth
9. Industry innovation and infrastructure
10. Reduced inequalities
11. Sustainable cities and communities
12. Responsible consumption and production
13. Climate action
14. Life below water
15. Life on land
16. Peace, justice and strong institutions.
17. Partnerships for the goals
When one gets interested in even one of these 17 sustainable development causes, a whole world of challenges and opportunities open up. A billionaire hoping to impact #16, “peace, justice and strong institutions” would find thousands of peace seeking organizations actively working to secure more peace in the world. Among them are Carnegie Endowment for International Peace, Quaker organizations, Buddhist Peace Fellowship, Center for Global Nonviolence, Feminist Peace Network, International Confederation for Disarmament and Peace, International Peace Research Association, UNESC0, World Congress of Imams and Rabbis for Peace, and World Peace Congress. The task is to identify the leading “do-good” organizations working in the chosen area and meeting the leading persons who carry influence.
The key is to find the organizations that have the lowest administrative costs. Ideally, one wants 90% of donated money to flow to the people needing help and only 10% to be spent on administration and fundraising. The philanthropist needs to monitor the supported organizations through time. There is always the danger that recipient organizations will expect the grants to continue even if their performance starts slipping.
One of the most impressive billionaire events has been the creation by Bill Gates and Warren Buffett’s of The Giving Pledge. As of May 2024, the Giving Pledge had attracted 245 pledgers from 30 countries. Their pledges are estimated to total $600 billion. The pledgers promise to give away at least 50% of their fortune to philanthropic causes either in their lifetime or in their will.
The world has over 2,755 billionaires and only 245 (less than 9%) have joined the Giving Pledge. Signing the pledge involves only a moral commitment, not a legal binding commitment.
All said, today’s world mostly relies on governments to raise enough money to help lift the poor out of poverty and to improve the lives of their people. But let’s not forget the huge riches of the wealthy class in the hope that more billionaires will want to join The Giving Pledge. These billionaires will be building a better life for themselves and the world rather than wanting to be a friend of a tyrant.
Beware Billionaires! Steer clear of tyrants. Use your wealth to make the world better for everyone.
