Presidential candidate and former South Carolina Gov. Nikki Haley scored a big endorsement this week, winning the backing of Americans for Prosperity Action (AFP), described as the “largest conservative grassroots coalition in the country.” AFP is led by Charles Koch, has millions of members and is capable of fielding thousands of activists to knock on doors and encourage people to vote.
It was a big win, but it’s not the only reason for optimism inside Haley’s campaign.
Other wealthy GOP donors seeking an alternative to frontrunner Donald Trump, some of whom are discouraged by Florida Gov. Ron DeSantis’s failure to gain traction, are taking a hard look at Haley. JP Morgan Chase CEO Jamie Dimon and Home Depot Founder Ken Langone are reportedly in that group; Fund Manager Stanley Druckenmiller and private-equity bigwig Barry Sternlicht have already donated to Haley’s campaign.
Why would business leaders support Haley over Trump? After all, President Trump reduced regulations and lowered taxes during his administration — among the policies most popular with business managers. Plus, the stock market surged while he was in the White House, even with COVID causing a nationwide shutdown.
There are three reasons why wealthy GOP donors might back Nikki Haley:
- electability;
- predictability; and
- durability.
Let’s discuss durability first. Haley has one definite advantage over former President Trump: if she wins, she could occupy the Oval Office for eight years. Because of term limits, Trump could serve for only four.
Many conservatives, including myself, think that President Joe Biden and his Democratic colleagues have so damaged our country that it will take at least eight years to turn it around. Eight years to clean out the corrupt upper ranks of the FBI, to extricate the U.S. from harmful entanglements like the Paris climate agreement, to whittle the federal government down to a sustainable trajectory, to establish permanent barriers to illegal immigration and to remove cumbersome regulations that are slowing down our growth.
If Trump were to choose a running mate able to pick up the baton in 2028, this tenure issue would become less important. But given his penchant for elevating candidates whose main attribute is fealty to Donald Trump, that is not a given.
Next is predictability, important to investors and managers. President Trump pushed through many excellent policies, but business leaders were blindsided more than once, as he flip-flopped on the minimum wage — in 2019, Trump expressed support for a federal minimum wage of $15 per hour but then opposed House legislation that raised the rate — and by his sudden moves on, for instance, trade.
In mid-2019, Trump took to Twitter and “hereby ordered” U.S. companies to stop doing business in China, threatening to use the International Emergency Economic Powers Act of 1977 to enforce his edict. After the business community erupted in anger, the White House was forced to walk back his demand.
In a recent interview on Fox Business, Trump mused about the appeal of slapping a 10 percent tariff on all imports — an across-the-board fee that would raise costs for thousands of businesses that import vital goods and that would harm consumers.
According to The Economist, as president, Trump doubled the duties paid on all U.S. imports. It notes that the former president had predicted the levies would shrink the trade deficit but that instead the deficit widened. In response to the president lifting average duties on Chinese goods from 3 percent to 19 percent, Beijing “tripled its tariffs on America.” As to creating jobs: “The Peterson Institute estimated that steel users in effect paid an extra $650,000 per job created in the steel industry.”
Trump’s erratic nature and sudden policy pronouncements continue to cause problems among Republicans, many of whom are in tight battles for reelection next year. Just recently, for example, he suggested that if reelected he would try to abolish the Affordable Care Act, Obama’s health care bill that has over time become quite popular with voters.
The former president is not shy about veering off on his own; his independence is often refreshing (for instance, some of us applauded his novel idea about buying Greenland) but can be a distraction from a more pragmatic agenda.
Last is the critical issue of electability. Donald Trump brings heavy baggage to the 2024 campaign; Real Clear Politics puts his unfavorables 15 points ahead of his favorables, while Haley is in positive territory by 1 point.
In hypothetical matchups, Trump beats Biden by 2 points on average, while Haley is ahead by 4 points. Haley beats Biden by a bigger margin than Trump in critical swing states.
In 2020, hatred of President Trump on the left inspired record turnout; polls have shown that people voted against Donald Trump more than they voted for Joe Biden. That could happen again, regardless of who the Democrat candidate turns out to be.
Importantly, Nikki Haley comes to the campaign loyal to the Trump agenda but also armed with a thoughtful position on abortion that is likely acceptable to most Americans. That will serve her well with women and young voters, and remove one of the obstacles to GOP victories in 2022. However, a good percentage of Trump supporters might not show up for her.
Haley’s chances of winning the nomination are still slim. Trump leads his former United Nations ambassador nationally by more than 50 points. In Iowa and New Hampshire, the first two states to hold elections, he is ahead by more than 25 points.
We are less than two months away from the Iowa caucuses. It would require a political earthquake to unseat Trump. Haley is focused on the early primaries, and seems optimistic she can score an upset. All her life, she says, she has been underestimated. Some big Republican donors are hoping this will be one of those times.
Liz Peek is a former partner of major bracket Wall Street firm Wertheim & Company. Follow her on Twitter @lizpeek.