An Election Like No Other

It’s no secret that uncertainty has a dampening affect on economies, and election years are, by definition, a time of uncertainty. In fact, once the nation’s new leader is anointed, sluggish voting-year growth is often bolstered by a post-election “relief rally” as businesses breathe a collective sigh of relief and get on with things. But this November—with the two top presidential candidates so diametrically opposed on so many compelling issues—just might be different.

According to a recent survey by U.S. Trust, 68% of high-net-worth executives and business owners are concerned about the impact of the presidential election on their companies. In fact, depending on whether Donald Trump or Hillary Clinton becomes president—and on which candidate each business leader has bet—some American CEOs’ worries may go sky-high by Inauguration Day.

CEOs can make a positive case for either candidate: Clinton, who had a front-row seat to the action while serving as First Lady and then went on to develop her own formidable political skill set in Congress as New York’s senator and as the country’s secretary of state, may be viewed as the experienced and steady hand. Meanwhile, Trump can be seen as the no-nonsense, billionaire hero who can’t be bought and will unleash a new era of business growth by taking a Roto Rooter to sclerotic Washington, D.C.

Yet, what may be much more persuasive to many CEOs is the negative case against whichever candidate they fear more. And that decision is often based largely on fears around how the new administration might impact our economy and the business climate. (See this sidebar, for the perspectives of four top economists.)

One block of CEOs believes that the election of Clinton would ensure nothing short of disaster in the years ahead, as she continues what they see as the anti-business philosophy of President Obama, tries to wring even more taxes out of the 1 percent and scrambles for the government to fulfill all the economic promises she’s made to her growing coalition of what some describe as the “47% of Americans who pay no income tax.”

The other block is just as frightened at the prospect of Trump as the next president, with their trepidation fueled by saber rattling on trade and immigration that may translate into policies that will throw the U.S. economy into reverse. They also fear the simple uncertainty a Trump presidency would bring, because the unknown is one of the worst things for business decision-making.

Put another way: Many CEOs fear Clinton could decelerate the U.S. economy by adding taxes and regulatory burdens over the next eight years, while others fear Trump could blow up the U.S. economy almost immediately by turning it over like an apple cart. “The choice between Clinton and Trump is really a choice between the lesser of two evils,” says Robert Johnson, CEO of the American College of Financial Services. “There is a time-worn adage—‘the markets dislike uncertainty’—and Trump epitomizes uncertainty.”

Indeed, it’s a curious twist when a lifelong progressive activist who’s never held a job in business becomes the presidential choice of significant numbers of business leaders. But Clinton is the devil they know versus the one they don’t.

Johnson believes that neither candidate is “appealing” to CEOs but that many of Trump’s promises to shake things up are “very concerning and potentially disruptive to business interests.” Meanwhile, although Clinton advocates higher taxes on wealthy Americans, “she definitely has more of a track record that business people can rely on.”

Temperament also comes up a lot. As former General Motors CEO Dan Akerson put it in endorsing Clinton, “Serving as the leader of the free world requires effective leadership, sound judgment, a steady hand and, most importantly, the temperament to deal with crises large and small. Donald Trump lacks each of these characteristics.”

Other notable business leaders backing Clinton include, of course, Warren Buffett; Barry Diller, chairman of IAC/ Interactive; Eric Schmidt of Google; Sheryl Sandberg of Facebook; Wendell Weeks, CEO of Corning and Reed Hastings, CEO of Netflix. Also backing Clinton is HP’s Meg Whitman, who has spoken out against Trump, likening him to Hitler and expressing concern about his impact on business. “I think his policies around free trade will be damaging to business as a whole,” she explained to CNBC in a recent interview. Yet Trump is backed by many CEOs, as well, including Sheldon Adelson of Las Vegas Sands, Stanley Hubbard of Hubbard Broadcasting, Robert E. Murray of Murray Energy, PayPal founder Peter Thiel and oil man T. Boone Pickens.

When it comes right down to it, many CEOs will support Trump simply because he agrees with them on one of the biggest fundamentals: taxes. “Trump says that by cutting everyone’s taxes, he will create jobs. That’s going to stimulate the economy, so people are going to make more money and, in the long run, also raise more revenue” for the government,” argues Giacomo Santangelo, an economics professor at Fordham University. “So as we approach the election, more CEOs may support Trump just because he’s talking about cutting their taxes and Clinton is talking about increasing them.”

Another big difference between the candidates that has emerged on economic policy also reflects their broader, stylistic differences. The bombastic Trump fixates on just a few bold and controversial ideas, such as the “wall” with Mexico and tariffs on Chinese imports. A relatively wonkish Clinton peppers her economic proposals with so many specifics that general themes are easily lost. She actually has spent time, for instance, discussing her proposals to protect horses from specific abuses and to speed up the Internet in rural areas.

Perhaps the largest difference is in basic attitudes toward CEOs. Trump promises a friendly one in part because he is one and knows and works with so many of them. Clinton is likely to be much more wary of business leaders philosophically. After all, it was Obama’s basic anti-business actions and attitudes that one CEO after another cited as disincentives to capital spending and expansion efforts during the last eight years—and Clinton has essentially promised a third Obama term.

Another major area where most CEOs agree with Trump is the view that the U.S. economy remains in rough shape, with disappointing GDP growth, a declining pace of business startups, disappointing wage growth and rising inequality. Trump has been hammering that theme from the beginning of his campaign.

Clinton, however, argues that private-sector job gains have been strengthening under Obama and that the unemployment rate has anchored itself below 5 percent. While acknowledging the economic discontent and “inequality” that fueled the rise of both Bernie Sanders and Trump, she presents herself as the person best qualified to address it. As her campaign shifted into general-election mode, Clinton emphasized the remaining problem of a long-term divergence between worker productivity and wages.

Clinton also touted an analysis by Moody’s Mark Zandi, who said that by constricting trade and immigration and slashing taxes while not cutting spending significantly, a President Trump would plunge the U.S. into “an unusually lengthy recession—even longer than the Great Recession.” (For more on Zandi’s predictions, click here.)

Moving into the final leg of the presidential campaign marathon, only one thing is truly certain about the outcome of this election: It has fueled an unprecedented level of passion among CEO supporters—and detractors—of both candidates.

Read more:
What the Election Could Mean for Your Business and the Economy

" Dale Buss : Dale Buss is a long-time contributor to Chief Executive, Forbes, The Wall Street Journal and other business publications. He lives in Michigan.."