When Barack Obama was in the White House, conservatives argued that he was putting the world’s premier capitalist country on the road to socialism. It turns out that they were right — but Donald Trump is driving the bus.
Socialism used to be the antithesis of Republican principles. “Socialism only works in two places — heaven, where they don’t need it, and hell, where they already have it,” Ronald Reagan quipped.
It was not just outright nationalization of industries that conservatives rejected; it was almost any sort of federal interference with private markets to achieve social or economic goals. Obama’s Affordable Care Act preserved the role of private insurers, but GOP Rep. Michele Bachmann expressed a right-wing consensus when she told the 2011 Conservative Political Action Conference it was nothing less than “the crown jewel of socialism.”
But Trump has outdone anything Obama ever dreamed of, mounting a brazen government invasion of the private sector. He interfered with the sale of U.S. Steel to Nippon Steel, forcing the Japanese giant to grant Washington a “golden share,” which will give him a major role in company decisions.
Chip manufacturer Intel had to agree to give the U.S. government an ownership stake — making it the company’s biggest shareholder. “I said, ‘I think you should pay us 10% of the company,’ and they said yes,” Trump crowed. It was an offer Intel couldn’t refuse.
He imposed terms on chipmakers Nvidia and AMD, forcing them to hand over 15% of the money from their sales in China. He announced a deal requiring the Japanese government to invest $550 billion in the U.S. — which will be carried out “at President Trump’s direction.”
These are only the beginning. “I will make deals like that for our Country all day long,” Trump posted about the Intel shakedown. The director of his National Economic Council, Kevin Hassett, promised that “there’ll be more transactions, if not in this industry then other industries.”
Hassett, you may have forgotten, wrote a 2021 book called “The Drift: Stopping America’s Slide to Socialism.” Now he’s cheering as his boss turns private companies into subsidiaries of the administration.
Trump can use his new power to make CEOs do whatever he wants — whether it’s building factories that make no financial sense, installing managers loyal to him, closing down operations overseas or doing business with the Trump Organization. Any corporate bigwig who doesn’t donate generously to Trump’s presidential library — or to Republican campaigns — may soon be a former corporate bigwig.
But Trump doesn’t have to commandeer equity stakes to turn capitalist enterprises into his obedient servants. The fear of becoming a target will often be enough to induce compliance in advance.
He also has another major weapon: tariffs. Trump can use import taxes to coerce companies in two ways: by imposing them on selected goods that U.S. companies need and by waiving them for companies that cater to his desires.
He has other ways to bully news organizations. Paramount, which owns CBS, paid $16 million to settle his ridiculous lawsuit over a “60 Minutes” interview with Kamala Harris. That was the apparent price of getting the Federal Communications Commission to approve the company’s sale to Skydance.
ABC surrendered $15 million to settle a Trump defamation suit that it probably would have defeated in court. Amazon’s Jeff Bezos, who has billions of dollars worth of federal contracts, has steered his Washington Post to pacify Trump — including killing an endorsement of Harris.
The genius of capitalism, when allowed to function, is that it requires companies to strive to satisfy customers, providing valued goods and services at prices they are willing to pay. Firms that fail at this relentless obligation go out of business sooner or later, freeing up resources that can be used more productively.
Starbucks, Apple and Home Depot didn’t flourish by ingratiating themselves with presidents but by serving the needs of consumers. That model, however, may be irrelevant once kowtowing to Trump becomes the essential task of every corporation.
This is a particularly noxious form of socialism. Its purpose is to maximize the president’s control over our lives, enrich his family, reward his lackeys and punish his critics. To an aspiring autocrat, power exists so that it can be abused.
I Googled “mafia methods” and got this artificial intelligence summary: “The mafia employs methods centered on intimidation, extortion, corruption, and the infiltration of legitimate businesses to generate illicit income and maintain power. Violence is used strategically to enforce discipline, punish rivals, and prevent witnesses from cooperating with authorities.”
I don’t want to exaggerate here. It’s not as if a recalcitrant corporate executive has to worry about waking up next to a bloody horse head. Trump would never resort to such a vicious tactic.
But you know what? He won’t have to.
Steve Chapman was a member of the Tribune Editorial Board from 1981 to 2021. His columns, exclusive to the Tribune, now appear the first week of every month. He can be reached at stephenjchapman@icloud.com.
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