Some Illustrative Speculation

What would happen if, by presenting rock-solid evidence that electoral fraud was committed on a massive scale, Trump were to prevail in his efforts to overturn Biden’s apparent victory? Setting aside, for a moment, both the likelihood and the longer-term implications of such a change in outcomes, I believe that the immediate effect would be twofold: a sharply lower stock market and massive riots in the streets. Let’s think for a bit about these potential ramifications of a change in expected outcomes.

As you may have noticed, the stock market has been on a tear in recent days. The Wall Street Journal attributes this sudden optimism about future corporate profits to both the prospect of a vaccine for Covid-19 and Biden’s widely-announced, but as yet unofficial, victory. At a minimum, it can be asserted with certainty that the likelihood that Biden won hasn’t hurt the market.

The corporate optimism implicit in rising stock market valuations shouldn’t come as a surprise. America’s largest corporations – particularly the tech/media businesses and Wall Street – backed Biden to the hilt, completing the massive shift in corporate America from right to left over the last fifty years that I mentioned in Realignment.

I can think of at least two perfectly understandable – if not necessarily socially beneficial – reasons that our largest corporations have moved so decisively to the left. The first is that as America’s economy has become more dependent on trade, more internationalized, American-domiciled companies have found it extremely profitable to both source production in lower-cost overseas locations and secure access to large overseas markets for their products. Trump’s aggressive management of trade issues, particularly with China, has threatened business that is hugely lucrative for innumerable, globally-oriented companies. The executives who run such corporations cannot be expected to put patriotism, or even principles, ahead of the profits that will enrich themselves and their shareholders; in their minds, those things are somebody else’s concern.   

Whether such international trade/sourcing is in the longer-term interest of our nation is a complex question, the answer to which depends on how one feels about the costs of shifting most manufacturing overseas versus the benefit of importing lower-cost products (and of selling goods overseas) and whether or not China, in particular, represents a long-term (or, for that matter, nearer-term) systemic threat. Trump was and is clearly worried about the social costs and the strategic implications of the wide open trade with China – and other nations – that was in place before he took office; our largest companies wish to return to, or protect, the profitability of the status quo ante.

The second reason that most of our major companies – the tech, media and healthcare companies, and Wall Street, in particular – are happy with Biden’s apparent victory is that big companies generally thrive in the sorts of heavily regulated, corporatist environment that a Biden Administration is likely to implement. It’s a common misconception that authoritarian regimes like Nazi Germany, Russia and China were or are anti-corporate – they love big corporations that they can control and benefit from, and protect them from market competition.           

Think of the profits Wall Street will make underwriting Chinese stocks and why the biggest banks came to love most of the Dodd-Frank regulations – because smaller banks couldn’t bear the costs of regulatory compliance, and they could. The major tech companies are begging for an analogous regulatory regimen; and I’m pretty sure they know that (especially given their overt support in the recent campaign) Biden will both drop Trump’s antitrust lawsuit against Google and take a friendly approach to possible new regulatory oversight. And, of course, Apple and Walmart will be able to go on producing their wares with quasi-slave-labor and few-to-no environmental constraints. Even the giant insurance, healthcare and pharmaceutical companies have found that they can benefit from heavy regulation and heavier government subsidies, while being protected from competition from smaller, potentially more innovative companies. (Which may be why Pfizer is rumored to have slow-walked its announcement of a Covid-19 vaccine until just after the election – they wouldn’t want to do anything that might help Trump, would they?)

All of these companies’ fortunes would look worse – at least in the near term – if it were determined that Trump had won the election. Smaller companies, though, in less of a position to win the regulatory capture game, would likely benefit, as might those whose jobs might otherwise migrate overseas. In any event, the immediate effect would likely be of a sharp downward revision in most big companies’ share prices which, like the mirror-image effect of the present rises in their stock prices, would reflect a changed opinion about their prospects.

The bottom line is that the companies that backed Biden – most major corporations in this country – did so because they fully expect his Administration to be corporatist in nature, and that they’ll benefit from that.

***

I also assume that if Biden’s apparent victory is reversed (based, presumably, on incontrovertible evidence of major fraud) the BLM/Antifa crowd will riot ferociously, cheered on by the corporatist media that have been so intent on declaring the matter settled.  They will insist that it was Trump, abetted by a Republican Supreme Court, who stole the election. They will use the new outcome to call for abolishing the Electoral College, packing the Court, implementing a new Constitution and even overthrowing the system outright. They are already calling for all these changes on the basis of their view that our country is irredeemably racist/corrupt – but the election’s reversal, after 74 million or so Biden voters have been told that they won but that Trump is dishonestly challenging the result, will give them an enormous amount of fresh momentum.

Which makes for a nice contrast with the right – which will squawk, but neither riot (nor ‘resist’ as the left did after 2016), if the presently expected result stands – but also makes for an unattractive potential prospect. Which is the point: the rioters doubtless hope that they can hold the rest of us hostage to their preferred outcome with threats of violence.

***

It almost goes without saying (or writing, rather) that the result that should be hoped-for is not that whichever candidate you or I prefer prevails in the present legal struggle over the election’s proper outcome, but that the result, once certified, reflects the voters’ choices according to the process set forth in our laws and the Constitution. Any other result would be a de facto overthrow of our system – and possibly the beginning of its actual overthrow.

I have highlighted the likely adverse immediate effects of a possible reversal of the outcome not because I think it’s probably going to happen – I don’t – or because either of those possible ramifications should affect how we think about a possible reversal, but because I think they illustrate interesting aspects of the recent realignment of supporters of our major parties.

***

One more point: given that a plurality of the rich, most major corporations, Hollywood, academia and other pillars of the Establishment now support the left, and that our nation has moved as far as it has toward becoming a highly regulated entitlement state, with benefits and/or opportunities sometimes determined with reference to involuntary factors like skin color or ethnic origin, the label ‘conservative’ seems particularly inapt for those who – like yours truly – take an American traditionalist view of free markets, individual rights and national interests.

We ‘conservatives’ are the true liberals in the classic sense of the word, meaning those who believe first and foremost in individual rights and freedoms. It is the progressives and their supporters on the harder left who want to preserve (conserve, if you will) and enhance the current status quo.

Which is why Trump has seemed to be such a disruptive leader.

M. H. Johnston

4 comments to Some Illustrative Speculation

  • Anonymous  says:

    That may be a smartly written defense of why Trunk is a disruptive leader, alas the real reason is he is a self serving lying con man.

    • AT  says:

      A “self-serving lying con man” who has somehow managed nevertheless to rack up some very impressive achievements at home and abroad in the face of unprecedented resistance. Odd, that.

    • Vivian Wadlin  says:

      We are all self-serving. Even you, by hiding your identity, serve yourself.

  • Vivian Yess Wadlin  says:

    As I have written before, your pieces should be available to a wider audience. I am passing this along to my classical liberal friends. They do know the difference between a left-liberal and a classical one.

    Your explanation of the corporate desire for expensive regulation to curtail opportunities to compete with them is spot on.

    Thanks for this article.

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