Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche


Donald Trump could Make 2016 the Most Expensive Presidential Election Ever

Donald Trump’s advent as the Republican nominee could make the 2016 presidential election the most expensive in history.

The most costly presidential race in U.S. history was 1896, when a populist rabble-rouser named William Jennings Bryan won the Democratic nomination. Like Trump, Bryan was a celebrity, a popular lecturer, the 1890s equivalent of a reality TV star, who used his star power to attack the nation’s elite and promoted policies that scared Wall Street to death.

Bryan’s policy was free silver, which would have devalued the currency and wiped out most of Wall Street’s wealth. Trump’s is tariffs, particularly a 45% duty on all Chinese imports, which would destroy the business of some of America’s biggest companies, including Amazon and Apple.

Like Trump, Bryan was a popular figure who attracted huge crowds of rabid supporters. And like Trump, Bryan scared many of the nation’s leaders, particularly the super wealthy robber barons, the 1% of their day, to death. Once he captured the Democratic nomination, the super-rich and the giant corporations went all out to destroy Bryan by using their most potent weapon, money.

What Happened in 1896

The amounts the elites were willing to spend to crush Bryan were astronomical. Atlantic writer Matthew O’Brien estimated that the 1896 presidential campaign consumed .05% of America’s gross domestic product (GDP).


If the same amount were spent today, the price tag would be around $8.96 billion, more than the cost of all the national elections in 2012, which cost around $7 billion, according to The Economist. That would also mean the election would cost more than four times more than the last presidential election which cost around $2 billion.

Most of this money was spent on behalf of Bryan’s Republican opponent, William McKinley. McKinley’s supporters paid for the publication of 200 million pamphlets, which is astounding, considering the fact that the U.S. population was 76.2 million in 1900 four years later. Some historians have noted that almost every household in the United States received at least two pieces of McKinley campaign literature in 1896.

They also financed 1,400 stump speakers, who crisscrossed the country ferociously, attacking Bryan at every opportunity, which was hardly a small feat when the only form of long distance travel available was by train.

Business interests also mounted a third-party challenge to deliberately split the vote of the so-called Gold Democrats. The purpose of the Gold Democrats was to take the votes of Southern Democrats from Bryan, which they did. They were called Gold Democrats because they opposed free silver, Bryan’s controversial signature policy.

The money was well spent. McKinley won in a landslide, receiving around a third more votes in the Electoral College than Bryan. McKinley also won a majority of the votes of ethnic group in the United States, except the Irish. His victory established a Republican domination of U.S. politics that lasted until the Great Depression 34 years later.

2016 is 1896 All Over Again

The situation in 2016 is much the same as it was in 1896: a popular candidate with a radical agenda that threatens business is about to take control of one of the two major political parties. That candidate, Trump, like Bryan back in 1896, is generating lots of media attention and popular support.

Trump, like Bryan in 1896, took advantage of a lousy economy – the country had been in depression for three years – and the fears of working and middle class voters. Bryan’s anti-business rhetoric resonated with rural white Protestants, who saw their traditional country life under threat from the big city, big business, immigrants, and Catholics. Trump appeals to working class whites who feel threatened by free trade, China, big business, big government, immigrants, terrorism, technological progress, a growing non-white population, and a declining economic position.


Supporters greet Republican presidential candidate Donald Trump during a campaign rally, Friday, Dec. 11, 2015, in Des Moines, Iowa. (AP Photo/Charlie Neibergall)
Supporters greet Republican presidential candidate Donald Trump during a campaign rally, Friday, Dec. 11, 2015, in Des Moines, Iowa. (AP Photo/Charlie Neibergall)

Trump has already picked fights with some of the nation’s richest people and largest corporations. The Donald actually tweeted out this threat:

“Trump on Amazon: ‘If I become president, oh do they have problems. They’re going to have such problems.’ • $AMZN 12:13 PM – 26 Feb 2016.”

The candidate is mad at Amazon (NASDAQ: AMZN) because its CEO, Jeff Bezos, owns The Washington Post, which has been ferociously attacking him lately. Bezos is the world’s fifth-richest man, worth $45.6 billion, while Amazon itself reported a TTM revenue of $107.01 billion and $19.81 billion in cash and short-term investments on Dec. 31, 2015. Trump, in contrast, has around $4 billion.

That money could pay for a lot of attacks on Donald, and Amazon is just one fantastically rich company Trump is going after. He’s also attacking Apple (NASDAQ: AAPL) for refusing to help the FBI break the encryption on an iPhone seized from one of the terrorists behind the San Bernardino atrocity last year.

How Trump Threatens Big Business

Apple and Amazon already have a very good reason to oppose Donald. Their business model is dependent on easy access to low-cost manufacturing in China, something obviously threatened by Trump’s trade proposals. Nor is it just Apple and Amazon that would be threatened by this. There’s also Walmart (NYSE: WMT), which reported revenues of $482.13 billion on Jan. 31, 2016.

To this list of those potentially threatened by the Trump tariffs, we can also add Costco (NASDAQ: COST) with $116.55 billion in revenue and Disney (NYSE: DIS), which reported revenues of $54.32 billion on Dec. 31, 2015. Disney needs access to foreign markets, particularly China, in order to turn a profit on its films.


After Disney, there’s almost every tech giant in Silicon Valley, including Oracle, Microsoft, Cisco Systems, Facebook, and Alphabet, the company formerly known as Google. Alphabet (NASDAQ: GOOG) reported $73.07 billion in cash and short-term investments on Dec. 31, 2015, and Facebook (NASDAQ: FB) reported $18.43 billion.

Some right wing business interests are also hostile to Trump. Reuters reported that the Koch Brothers; who are collectively worth around $100 billion, have around $400 million in their political arsenal that could be deployed against Trump in the general election. What happens if the Koch brothers, Bezos and Apple’s Tim Cook team up to stop Trump and rope in other billionaires such as Bill Gates, Sergey Brin, Larry Page, Mark Zuckerberg and Larry Ellison to help?

Back in 1896, a dream team of robber barons, including John D. Rockefeller, Andrew Carnegie, and J.P. Morgan, were among those fighting back against Bryan. What does Trump do if the biggest names in American business line up behind Hillary?

The result could be almost unlimited financing for Hillary and anybody else who wants to run. Politico reported that somebody has already paid Data Targeting, a firm of Republican political consultants, to study the possibility of a third-party conservative challenge to Trump – shades of the Gold Democrats.

The $20 Billion Election

Vast amounts of cash could be unleashed because the U.S. Supreme Court’s much maligned Citizens United decision allows for unlimited campaign spending by almost anybody. One has to wonder how Trump, who has vowed to spend $300 million to reach the White House, could compete with that. He has only $4 billion, according to Forbes, and his opponents could conceivably collect a war chest of $10 or even $20 billion.

A strong possibility is that Donald Trump could become the Republican nominee and end up out of money. Once he burns through his cash, Trump will either have to start taking public funding or go begging to the GOP establishment and probably have to renege on all his campaign promises to get a few dollars. Another possibility is that billionaire Donald could end up begging for cash from his supporters to keep the repo man from taking his private plane away.


Back in 1896, Bryan eventually ran out of money. He ended up scurrying from train to train, traveling the country in a frantic effort to counter the McKinley juggernaut. How would somebody used to getting own way like the Donald react to that?

Thanks to Donald Trump, the man who is running as an alternative to big money establishment politics, more money could be spent in the 2016 Presidential election than in any year since 1896. One has to wonder how the public will react to that and the level of cynicism it will add to our politics.

For an interesting view of the 1896 presidential election from the perspective of a modern political operative, see Karl Rove’s excellent book The Triumph of William McKinley: Why the Election of 1896 Still Matters. Ironically enough, that book is available through