With the way he's acting, Donald Trump seems pretty socialist: David M. Drucker

Key topics:Trump’s corporate interventions spark claims of Republican “socialism.”GOP voters tolerate Trump’s industrial policies despite past objections.Experts debate scale of Trump’s market involvement vs historical precedents..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By David M. Drucker.President Donald Trump is a socialist, apparently.That’s certainly what Republicans circa 2014 would have said if then-President Barack Obama had directed the US to: take a 10% stake in microchip manufacturer Intel Corp.; approve Nvidia Corp. microchip exports to China on the condition that the firm pay a special 15% tax on revenue; approved the sale of United States Steel Corp. in exchange for an ownership “golden share;” pressured private law firms to provide pro bono services to the administration; and used tariffs to strongarm private industry — something Republicans have ridiculed as picking winners and losers when Democrats do it.Some conservatives, sticking to their principles, are indeed using the “S” word to describe the above actions taken by Trump so far in his second term. “This is actual socialism happening by a Republican administration,” Georgia-based radio talk-show host Erick Erickson said bluntly during a recent broadcast. “My God people: What have we been fighting for, for the last decade?” To wit, socialist US Senator Bernie Sanders, a Vermont independent who caucuses with the Democrats and is usually hypercritical of Trump, celebrated the president’s partnership with Intel.“I am glad the Trump Administration is in agreement with the amendment I offered three years ago to the CHIPS Act,” Sanders told Punchbowl News. “Taxpayers should not be providing billions of dollars in corporate welfare to large, profitable corporations like Intel without getting anything in return.” (The CHIPS Act, enacted with bipartisan support under President Joe Biden, made billions available in federal grants to spur domestic microchip manufacturing, deemed a national security imperative.)Whether we call it socialism or big-government populism, many Republicans in Congress were raised to be suspicious of this sort of federal intervention in the American economy. But fearing a backlash from Trump-supporting GOP primary voters in the midterm elections next year, they have been silent enablers of the president’s industrial policy. That raises a question: Why are Republican voters content to let Trump pursue an agenda they most assuredly would have rebuked had a Democrat done the same (recall the Obama-era outrage over Solyndra)? I put that query to Tim Chapman, a veteran Republican operative in Washington who advises Mike Pence, Trump’s first vice president and a stubborn acolyte of GOP icon Ronald Reagan. Chapman, a keen observer of centre-right voters both before and during Trump’s reign atop the Republican Party, attributed their willingness to permit Trump philosophical heresies to three factors.“At the most basic level, the party is strongly supportive of President Trump and his agenda and so there’s an inclination to give him the benefit of the doubt,” Chapman said. “The second thing that’s going on is, there’s been this fascination within Republican activist circles for decades with this idea that we should just run the federal government like a business.” In that regard, Chapman explained, voters view Trump’s coercion of corporate America as the normal process of “cutting deals” that fits with running Washington like a business..Read more:.Musk vs. Trump: Billionaire feud jolts markets and GOP unity.“There’s a third and much more pernicious element,” Chapman added. “There are serious elements within the Republican Party that want to throw out the old conservative gameplan. ‘State power conservatives’ is what I’m calling them. These are conservatives who say: ‘The old ways of approaching government and of approaching public policy failed us for decades and therefore we must be open to new ways.’” That “new way,” Chapman emphasized, wields government power to “achieve conservative ends,” currently “defined by whatever” Trump wants.Trump, who relishes the influence he has been able to exert over American corporations and the titans of industry who run them, doesn’t bother to downplay or soft-pedal his intervention in the supposedly free market US economy. Notice his description of the government’s acquisition of a minority of Intel shares: “… the United States of America now fully owns and controls 10% of INTEL…” the president said in a social media post (emphasis mine.)However, that doesn’t mean that what Trump is doing is entirely unprecedented. In 1979, Washington bailed out Chrysler Corp., saving the Detroit automobile manufacturer from going under. In 2009, on the heels of the Great Recession, the feds provided loan guarantees to General Motors Co. and Ford Motor Co. to prop up the other two of the so-called “Big Three” American automakers.Still, some academics are having a hard time finding any direct government intrusion into the affairs of corporate America on the scale carried out by Trump.“Since the founding, we’ve always had government-market partnerships,” University of Cincinnati College of Law professor Joseph P. Tomain, coauthor of How Government Built America, told me. The federal government has a long history of providing subsidies, grants, tax breaks and other forms of benefits and aid to favored sectors of private industry via legislation approved by Congress and signed by the president.“I think, however, that is very different than taking a piece of a company,” Tomain argued. “This goes absolutely contrary to any type of free-market thinking that anyone cares to have.”Naomi R. Lamoreaux, an American business historian and senior researcher at the University of Michigan Law School, told me similarly that the closest comparison she can find to what Trump is doing dates to the early 19th Century. “States limited the number of banks they incorporated, and it was common practice for them to take equity stakes in banks, to require banks to pay bonuses to the state treasury,” she said. “These practices pretty much ended by the 1830s.”Perhaps the Trump-led Republican Party is on the cusp of giving up on the ideal of free-market capitalism. That would be a heck of a victory for Democrats at a time when they are completely powerless in Washington and beset by infighting over the future of their party..© 2025 Bloomberg L.P.

With the way he's acting, Donald Trump seems pretty socialist: David M. Drucker

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