Billionaire vs. Billionaire
Donald Trump has rapidly erased his financial disadvantage against President Biden, outraising his Democratic rival for the second straight month, fueled by a cohort of wealthy supporters who donated millions to the former president shortly after his conviction in New York on 34 felony counts.
But wealthy donors are still giving to Biden, and his campaign has used its big early financial lead to build out its political organization in key battleground states, meaning the outcome of November's election may depend on which side can continue to raise money from billionaire backers.
Numbers: Trump and the RNC raised $141 million last month, compared with $85 million for Biden and the DNC, and a partial tally yesterday showed Trump and the RNC had at least $170 million in the mix, compared with $212 million for Biden and the DNC.
Wealthy conservatives are coming off the sidelines. That led to Timothy Mellon, the Mellon heir who gave $50 million last month to a pro-Trump super PAC that, shortly after receiving the money, booked $100 million in ad inventory through Labor Day.
It's a reminder that many donors have gotten over their doubts about Trump.That includes some who have publicly condemned Trump's attempts to overturn the results of the 2020 election and his role in the attack on the Capitol on Jan. 6. One of them is Blackstone's Steve Schwarzman, who cited concerns about the economy, immigration and foreign policy when he announced his support for Trump last month.
Many would like to see a more pro-business candidate take the White House. That comes despite the stock market soaring under Biden, whose current supporters include financial and oil magnates who want to deregulate the economy.
This includes members of the cryptocurrency community: The Winklevoss twins, who run the Gemini exchange which has come under pressure from regulators, announced yesterday that they had each donated $1 million worth of Bitcoin to support his campaign.
Biden donors are continuing the fight. Mike Bloomberg recently donated about $20 million to the president's reelection effort, and Melinda French Gates gave her first political endorsement of Biden, posting on X that “this election means so much to women and families that I cannot stay silent this time.”
One question: How effectively is the money being spent? Biden's money is being spent on building local political organizations and on television advertising, but some Democrats (and the Trump campaign) say the big advertising dollars are not having much of an impact on Biden's poll numbers.
In Trump's case, much of the money goes to advertising, but it is also being used to pay huge legal bills, which are blunting some of the new financial support he is receiving.
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In other election news: Trump was a guest on the podcast “All In,” hosted by venture capitalists David Sachs and Chamath Palihapitiya.
What's going on?
Biden administration bans sale of Kaspersky antivirus software in the US The decision was based on concerns that the Russian government's influence over the Moscow-based company poses a national security risk. The Commerce Department also added Kaspersky Lab to a trade restrictions list, which could affect the company's sales in other regions.
The IRS has extended a freeze on pandemic-era tax credits. The agency will continue to reject new applications for the Employee Retention Tax Credit, which was introduced in 2020 and allows companies to collect up to $26,000 per employee. The decision came after an internal analysis that found a large portion of the backlog of applications was inappropriate.
Anthropic has announced its latest competitor to OpenAI's artificial intelligence models. The startup announced Claude 3.5 Sonnet, a new large-scale language model that it claims beats the latest version of OpenAI's GPT-4o in several benchmarks. The announcement is the latest example of an innovation release race between AI companies that requires significant funding and technical resources.
American Airlines flight attendants threaten to strike. The union representing the airline's 28,000 flight attendants said no agreement had been reached on a new contract and urged members to prepare for a strike, but they could not call one until they had received permission from the National Mediation Board.
Tough times
The Supreme Court yesterday upheld a Trump-era tax on foreign income, a ruling that experts said protected the nation's tax system.
But the bill also offers a potential opening for Democratic efforts to tax the wealthy not just on their income, Times reporter Jim Tankersley writes.
context: A Washington state couple, supported by the free-market Competitive Enterprise Institute, The Supreme Court, in a 7-2 decision, rejected the challenge, arguing that a provision of the 2017 law that imposes a one-time tax on Americans who own 10 percent or more of a U.S.-owned or controlled foreign company is unconstitutional.
The decision was closely watched for its impact on a potential wealth tax. President Biden and other Democrats have proposed raising taxes on the wealthy and corporations, potentially including taxing billionaires' unrealized gains from rising asset values, but conservative opponents argue that would be unconstitutional.
The ruling in this case suggests there is significant disagreement among the justices on such taxes. Justice Ketanji Brown Jackson essentially laid out a blueprint for defending a wealth tax, writing that case law shows the decision should be left to Congress and voters.
But Judge Amy Coney Barrett this She might not agree with the same about a wealth tax.
Liberals and conservatives alike said they look forward to such a fight.
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“The fight continues to tax the wealthy, impose a wealth tax on the super-rich and billionaire, and make the system fairer,” Massachusetts Democratic Senator Elizabeth Warren wrote on X.
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Dan Greenberg of the Competitive Enterprise Institute said opponents of a wealth tax “are likely to find friendly support from a significant portion of the court.”
Taxes are a hot political issue in this election. While President Donald Trump has promised to cut taxes on the wealthy and corporations, President Biden has argued for higher taxes on the wealthy to appeal to working-class voters and labor unions.
Treasury Secretary Janet Yellen said this month that relying on tax cuts to spur growth is bad for workers (though she also opposes calls for a global wealth tax).
Can Europe avoid Swiftian inflation?
For the past year, economists and analysts have been trying to quantify the economic impact of Taylor Swift's Eraser Tour, with figures in the billions of dollars in the U.S. Swift is currently touring across Europe, making big bucks for hotels, restaurants and other services in and around the cities where she performs.
But there's another important consideration for European economists: her effect on inflation, The Times's Esje Nelson writes in DealBook.
European central banks are cutting or preparing to cut interest rates as inflation slows. But economists are watching every bit of data because every potential uptick in inflation data is important, including from Erastours, which could affect airfares, hotels and restaurants and drive up prices.
Policymakers are seeking assurances that their economies are moving in the right direction, and recent surprise developments in services inflation are forcing them to tread cautiously, as central banks scrutinize sharp fluctuations in price data to distinguish temporary effects from longer-term trends.
It's all a matter of timing. The impact of Swift's tour might only show up in national inflation figures if the Eras shows take place on the same days that national statisticians collect price data to calculate the inflation rate, which could then lead to higher prices paid by Swift fans for hotels, for example, that could affect the overall inflation rate.
This could happen in the UK in August. Lukas Krischan, a strategist at TD Securities, is in a position to know when Swift will perform in London for the second time: For the past eight months, he and his colleagues have been tracking hotel prices across the U.K. to replicate as accurately as possible the information collected by the U.K. Statistics Office.
“These little quirks can have a big impact,” Krishan said.
“The fish that got away was big.”
–SoftBank founder Masayoshi Son Selling its Nvidia shares Son missed out on Nvidia's stock price surge in 2019 (while SoftBank reaped about $150 billion in additional book profits). Speaking at SoftBank's annual meeting today, Son also said he wanted to buy Nvidia in 2016 but the deal fell through.
In the newspapers
Here's a one-sentence summary of some of the academic research that caught our eye this week:
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Although most of the public believes that rising interest rates cause inflation, policymakers have a hard time explaining traditional ways to combat inflation. (Alberto Binetti, Francesco Nuzzi, and Stephanie Stancheva)
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We need new rules governing global trade that take into account climate change, political power imbalances, and rapid technological change. (Martin Guzman and Joseph Stiglitz)
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Companies are letting algorithms dynamically set prices, and no one knows what will happen next. (Martin Spann et al.)
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How to interpret a 13th-century Florentine ledger, one of the earliest examples of double-entry bookkeeping. (Alan Sangster)
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A regression analysis of people's happiness and their astrological signs found “no strong association” with career or financial satisfaction. (Mohsen Joshanloo, Libra)
Speed Read
Bargain Deals
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Revolut, the SoftBank-backed digital bank and Europe's most valuable startup, is reportedly considering a stake sale at a valuation of $40 billion. (FT)
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Tony Ressler, co-founder of investment firm Ares Management, is said to be one of the investors who bought a 10% stake in Bill Ackman's Pershing Square (Bloomberg)
Elections, politics, policies
Best remaining
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It takes a closer look at middlemen, pharmacy benefit managers (PBMs) like Caremark and Express Scripts, who are accused of inflating drug prices for millions of people, employers and the government. (NYT)
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“China has mixed feelings about Elon Musk, but loves his mother very much” (WSJ)
Let us know what you think. Email your comments and suggestions to dealbook@nytimes.com.
