A concentration of billionaires who descended this week on Davos, Switzerland for The World Economic Forum’s 50th annual meeting are harboring a “dirty little secret” about the U.S. presidential election in November, says the Hoover Institution’s Niall Ferguson.
“The dirty little secret of Davos 2020 is they all need him to get re-elected,” Ferguson, Senior Fellow at Stanford University’s Hoover Institution, told Yahoo Finance’s Alexis Christophorus, when asked if wealthy attendees are begrudgingly rooting for President Donald Trump. “Nobody wants to say that out loud.”
On Tuesday, Trump addressed the forum in a speech that was criticized for a lackluster delivery during which he took credit for the U.S. economy and launching what he characterized as a “great American comeback.” Meanwhile, lawmakers in Washington negotiated over final rules that will govern the president’s impending impeachment trial.
“I rather relish the deadpan delivery. This was well-behaved Trump,” Ferguson said of the address. “I also thought it was right that he emphasized the economic successes of his administration, which I think significant even if he was guilty of a little hyperbole.”
Ferguson said the attitude marks an about-face since the last time he attended Davos in 2016.
“Almost nobody gave him a chance of winning the nomination, much less the presidency. And then the following year, they were all in a state of trauma because he won against their expectations, and they thought that was going to be a great disaster as a result, and they’re all a great deal richer than they were back then.”
For the ultra wealthy, Ferguson said Trump remains the obvious favorite if faced with a choice between Trump and Democratic front-runners Bernie Sanders and Elizabeth Warren.
The markets might be underestimating Sanders
If the markets begin to suspect that Sanders has a shot, he predicts significant volatility this spring. Ferguson added that investors are seeking four more years of “easy money” by way of low interest rates.
“I think if Mike Bloomberg were listening in he'd say, ‘What about me?’ But it's still not clear that he really has a strong chance of getting the Democratic nomination, and if you take him out of contention, then what are you left with? Joe Biden, who is not exactly been impressive on the campaign trail,” he said.
Asked about his belief that Bernie Sanders has a shot at winning November’s election, Ferguson said markets are underestimating Sanders given that polling, fundraising, and the strength of his campaign’s ground game show he’s a formidable contender.
“And remember, there's a substantial proportion of Democratic activists, especially young ones, who feel that he was robbed of the nomination for years back, and that was a calamitous mistake,” he said. “I think it's conceivable that if things play out in his favor in the early primaries, we'll get a sudden sort of shock awakening.”
“It is as unlikely-seeming now in January 2020 that Bernie Sanders becomes president of the United States, as it was unlikely in January 2016 that Donald Trump would be president of the United States.”
More from Davos:
Alexis Keenan is a reporter for Yahoo Finance. Follow her on Twitter @alexiskweed.