The oligarchs are complaining, and for once they have good reason to be upset.
The Yale School of Management periodically invites chief executives and political leaders to Washington, D.C., to speak frankly with one another in off-the-record conversations facilitated by the school’s Jerry Sonnenfeld, a sort of CEO-whisperer. It’s safe to presume that a majority of the participants voted for Donald Trump and that they did so because they knew he would cut their taxes and throw a monkey wrench into the administrative state. It never requires much imagination to please rich people come election time.
But things didn’t go according to plan. Instead of taxes and regulations they got a rickety, ad hoc, and highly personalized form of government control. And though they claim Trump’s “state-driven capitalism”—which I think is more accurately termed fascist corporatism—offends their sense of patriotism, what they really seem to resent is having routinely to pay Trump tribute, either by enriching him personally or by helping him try to plug the $3 trillion revenue hole he created with his idiot Big Beautiful Bill. This is government by shakedown, and they are the mark. Couldn’t happen to a nicer bunch.
Seventy-one percent of the CEOs said Trump’s tariffs have hurt their businesses, and three-quarters said the tariffs were illegal, which of course they are. Seventy-one percent said Trump has eroded the independence of the Federal Reserve (the sole regulatory agency they respect), and 80 percent said Trump’s pressure on the Fed to lower interest rates is harmful, which of course it is.
What they most especially hated, though, was (per Sonnenfeld’s summary in a September 21 Fortune article co-authored with his Yale colleague Stephen Henriques) “the Trump administration’s drift toward a quasi-socialist statism, seizing ownership from private shareholders, dictating staffing, and selectively blocking moves into strategic markets based upon politics and kickbacks.” Among the policies of which they “firmly disapproved” were the federal government taking equity stakes in Intel and MP Materials; skimming a cut from Nvidia’s and AMD’s chip sales to China; and reserving for the federal government a “golden share” in the U.S. Steel-Nippon merger.
It’s only gotten worse for them since then.
H-1B visas are being put up for sale. The price will be $100,000, or about five times what Central American immigrants pay “coyotes” (human smugglers) to get them across the southern border. And that includes transportation!
The Trump administration notes quite correctly that it’s a scandal that corporations are laying off information technology staff en masse and replacing them with H-1B workers employed by outsourcing companies. But a more direct solution—one Trump has never supported—would be to restrict outsourcing companies’ access to H-1B workers and eliminate the wage differential that makes them more attractive to employers, both through government regulation. Democratic Senator Dick Durbin of Illinois and Republican Senator Charles Grassley of Iowa have proposed legislation to do this; so has Rep. Ro Khanna, Democrat of California. The oligarchs won’t like that either, but too bad. Instead of paying the government more, as Trump is requiring, businesses should pay foreign workers more.
The million-dollar gold card. The federal government already grants admission to foreign investors under its EB-5 program, provided the investor puts $1 million ($800,000 in the poorest areas) into a United States enterprise that employs 10 people or more. The program has generated some outrageous instances of fraud, but according to a May report by Bloomberg’s Gillian Brassil, congressional reforms enacted in 2022 cleaned the program up. Trump isn’t eliminating the EB-5 visa, but a September 19 executive order created alongside it the option to hand the Treasury $1 million ($2 million if a corporation pays) to achieve the same end. Again: Wouldn’t this money be better spent paying American workers rather than working off a tiny amount of a deficit recently doubled through tax cuts for the rich?
Government-built factories. In July, the Trump administration struck a trade deal with Japan that, among other things, required the Japanese to invest $550 billion in U.S. industries. Now the Trump administration is saying the money will be used to build government-owned factories to produce gas turbines, pharmaceuticals, and other products, with 90 percent of the profit going to the United States and 10 percent going to Japan.
That’s all well and good, but if Trump were sincerely interested in creating manufacturing jobs he wouldn’t be blocking at every turn the even larger sum allocated under President Joe Biden’s Inflation Reduction Act and Infrastructure Investment and Jobs Act to create green technologies. Nobody challenges the legality of IRA and infrastructure-bill spending, which was appropriated by Congress. But litigants will line up to challenge the legality of Trump’s factory scheme—including perhaps the Japanese, who seem to have a very different view of what they agreed to.
Trump’s turnstile on the TikTok sale. After numerous extensions, TikTok has acquired majority ownership in the United States. For striking a deal that will benefit several Trump supporters (Larry Ellison, Jeff Yass, William Ford) the Trump administration expects to collect a fee that The Wall Street Journal says will be in the billions. “Traditionally,” the Journal’s Miriam Gottfried, Amrith Ramkumar, and Alex Leary note drily, “the government hasn’t been paid by companies for national-security approvals or export licenses and some lawyers say such arrangements could be illegal.” National security concerns are similarly set aside, the Journal notes, in the Nvidia and AMD chip sales to China, even though it isn’t clear how giving the Treasury a 15 cut enhances our national defense posture.
The same can be said of …
The World Liberty Financial deal with the United Arab Emirates. In this instance the money goes not to the Treasury but to Trump himself, making this the biggest bribery scandal since Teapot Dome (though several people have since pointed out to me that the sums in the Teapot Dome scandal, even after inflation, were by comparison trivial). The New York Times detailed the World Liberty Financial deal last week as its lead story on Page One and the world yawned, so let’s just describe this as a straight-up business deal.
The UAE invested $2 billion in a stablecoin from World Liberty Financial, in which the Trump family owns a 60 percent stake that Trump appears to have acquired without spending a dime. Two weeks later the UAE was permitted to import U.S.-produced AI chips in a quantity that the Biden administration previously made unavailable on national security grounds. It isn’t obvious to me how improving President Trump’s personal financial security enhances America’s national security.
World Liberty Financial, incidentally, appears to be attracting all sorts of skeevy characters, according to a recent report by the nonprofit Accountability.US. The most memorable player is TornadoCash, a crypto mixing service involved in money laundering that was sanctioned by the Biden administration—sanctions that the Trump administration subsequently lifted. As the financial services company Motley Fool delicately puts it, “Governance risk is … dramatically higher than what long-term investors typically prefer here. There are a handful of controversial partner ties, enormous political corruption concerns, and even baffling account freezes of high-profile holders, all of which inject risk.”
Nice little invention you got there. Too bad if something were to happen to it. The Commerce Department is contemplating imposing an annual tax of up to five percent of a patent’s assessed value on top of the fees already charged for a patent, which can run up to $10,000. This is different from a Trump proposal to reserve for the United States government some of the proceeds from university patents. That, at least, can be justified by the taxpayers funding university research (assuming taxpayers will continue to do so), though of course the Trump administrative motive here is entirely punitive. With an individual’s patent, the government typically does nothing; it merely extends rights already outlined in the United States Constitution, as Hans Sauer, deputy general counsel at the Biotechnology Innovation Organization, noted September 15 in The Washington Post.
Don’t you dare close that steel mill. I end this brief survey with an example that the oligarchs hate but that I rather like. The aforementioned Nippon-U.S. Steel merger was approved by Trump on the condition that the government acquired, free of charge, a “golden share” allowing it to veto certain actions by the new company that affect workers. (Details here.) The language of the agreement was a little creepy because it mentioned Trump by name, but apparently it will extend to Trump’s successors.
Anyway, The Wall Street Journal’s Bob Tita reported September 19 that U.S. Steel two weeks earlier told workers at a Granite City, Illinois, mill that the plant would close in November. Commerce Secretary Howard Lutnik (who is behind much of what’s been discussed in this piece) found out and, in Trump’s name, told U.S. Steel nuh-uh, prompting U.S. Steel to back down. This was a no-brainer; U.S. Steel had agreed in its contract language with the Trump administration that it would keep the Granite City plant in operation at least through June 18, 2027. What did U.S. Steel do, forget? Or did it think nobody in Washington would notice?
To approximately the same degree that I applaud this outcome the oligarchs hate it. In general, they struck a bad bargain by allowing Trump to replace the rule of law and the interaction of multiple branches of government with crude and not-always-legal Trump shakedowns. As business lobbyists never tire of saying, the business world prizes predictability above all else. Trump is anything but. It may take Jerry Sonnenfeld’s CEOs some time to fathom precisely how foolish they were to get behind Trump, but I predict that before this is over, they’ll be asking America why on earth we ever put their guy in the White House.