The Coming MAGA Assault on Capitalism
Yale SOM’s Jeffrey Sonnenfeld writes that former president Trump and his followers have made no secret of their hostility to business or their plans to intervene in markets.
A Trump rally in Freeland, Michigan, on May 1
Sensationalist narratives trumpeting how business leaders are supposedly eager to welcome Donald Trump back to the White House and pining for the days of his business-friendly tax cuts are missing an important dimension: the escalating, overt hostility of populist MAGA voices to business.
This hostility starts from the top with Trump himself. While many business leaders regard certain aspects of President Joe Biden’s economic agenda, such as Federal Trade Commision chair Lina Khan’s zealous antitrust enforcement, as overreach; they surely do not miss Trump’s far more invasive and micro-managerial meddling in their business affairs. The former President was notorious for inserting himself into business and regulatory processes to carry out personal vendettas and help friends. Although the GOP has long been the home of big business, many observers overlook the frequency with which Trump targeted business leaders as a big, bad bogeyman to advance populist policies.
This often took the form of highly personalized insults targeting individual businesses and CEOs. That includes lashing out at the iconic Harley Davidson brand, with its American eagle logo and 100% of its beloved motorcycles sold in the U.S. actually made in the U.S. Out of sheer political spite, Trump proclaimed American bikers should buy from Harley’s foreign competitors, ranting that Harley “surrendered” and “betrayed” America while threatening “they will be taxed like never before.”
Likewise, Trump wrongly accused Ford of robbing Detroit of jobs when it relocated an engine plant from Europe to Mexico, fortifying its North American supply chain. When I personally corrected Trump on that, he told me, “I don’t care, it’s working.” At the same time, the home appliances firm Carrier had a parallel experience with Trump bashing them as well despite being located in Mike Pence’s home state of Indiana.
Sometimes Trump’s attacks were far more damaging than mere personal insults. Trump targeted AT&T with a drawn-out antitrust suit as well as numerous personal taunts when it tried to merge with Time Warner, hoping to pressure CNN to become more friendly in its coverage. In stark contrast, Trump pal Rupert Murdoch received the white-gloves treatment through antitrust when he sold 21st Century Fox at around the same time, despite arguably more genuine antitrust concerns. In fact, Trump antitrust chief Makan Delrahim expressed support for the AT&T-Time Warner combination as an academic but flipped 180 degrees to appease Trump once in office, holding up the deal for two years. Likewise, Trump personally drove a proposed deal which would have secured TikTok for his longtime supporter and friend Larry Ellison at Oracle, unusually inserting himself into every detail of the negotiation process.
Trump’s capriciousness obfuscated his complex brew of personal business interests with genuine U.S. commercial and national security priorities. U.S. tech companies were bewildered when he reversed course in sanctioning China’s ZTE despite massive documented proliferation violations helping Iran. Trump’s explanation, that it would cost 50,000 jobs in China, rang hollow.
This highly personalized divide and conquer, carrots and sticks approach characterized Trump’s dealings with business leaders time and time again, as he tried repeatedly to pit rivals firms against each other in WWE-style slapdowns and Trump fealty contests: General Motors vs. Ford, Lockheed Martin vs. Boeing, Pfizer vs. Merck, and so on. Business leaders found themselves constantly on the defensive, wary of being pressured into taking illegal or unethical actions: for example, Dr. Albert Bourla of Pfizer successfully resisted Trump’s efforts to rush the COVID-19 vaccine to market before the 2020 election, preserving public health and safety despite Trump’s intense fury.
Even beyond Trump’s divide-and-conquer targeting of individual businesses and business leaders, and invasive meddling in their business operations; business leaders found much to disagree with Trump on substantively during his first term in office, in policy areas ranging from Trump’s anti-free trade/protectionist tariffs, to his xenophobic policies such as his Muslim travel ban and ending H-1B visas for skilled workers. At the same time, business leaders found certain areas of agreement with Trump, such as on business tax cuts in 2017.
But what has become increasingly clear is that a second Trump term would feature far more policies which are substantively anti-business than even his first term. Indeed, leading MAGA voices have already laid out dramatic anti-business policy proposals, which form the core of the new MAGA policy agenda, and which make anti-business measures from Trump’s first term seem like child’s play. These proposals, in fact, often share more in common with far-left progressive positions than with traditional GOP views, and are often far more progressive than the Biden Administration.
Take, for example, VP contender and Ohio Senator JD Vance introducing the “Stop Subsidizing Giant Mergers Act,” which aims to make it harder for companies to merge and to levy additional taxes on corporate mergers, in partnership with leading progressive voices. Fellow leading VP contender Josh Hawley has made his career on “Busting Up Big Tech,” proposing to break up major technology companies despite possible consumer harm in the form of higher prices, levying onerous taxes on them, and giving more power to Lina Khan’s FTC, accusing big tech of posing “the gravest threat to American liberty” in history; a position which has won support from many MAGA partisans ranging from Marjorie Taylor Greene to Ted Cruz in addition to leading progressives.
Meanwhile, fellow MAGA true believer Matt Gaetz of Florida is on record hoping to drive more companies into bankruptcy in the hopes of reining in what he believes to be out of control government spending; while calling for more onerous antitrust enforcement and regulation of the nation’s leading financial institutions. And leading MAGA intellectual Sohrab Ahmari says Biden has been weak on supporting labor unions, advocating for a resurrection of New Deal-era labor empowerment programs including re-establishing regional “wage boards” and beefing up the National Labor Relations Act of 1935 to transfer power from businesses to workers.
Some of the anti-corporate stances veer from substantive policy into the comedic: several MAGA voices have gone viral going after kids movies for perceived “wokeness,” with Senator Ron Johnson attacking The Lego Movie and Senator Ted Cruz attacking Barbie as examples of why Hollywood needs to be reined in. And of course, not to be forgotten is Ron DeSantis’ failed attempt to out-Trump Trump by attacking the iconic American enterprise Disney over its endorsement of human rights.
Even many longtime Republicans are repulsed by the anti-corporate direction MAGA partisans are increasingly taking. Former GOP Senator Pat Toomey said on CNBC this week, “the idea of having the government take more control over the economy, allocate capital, pick winners and losers, even set some wages and prices and tell Americans from whom they can buy and sell things….there is nothing new about these policies. What is new is there are now Republicans advocating for this attack on economic freedom and the free enterprise system.” But these traditional Republicans seem to be fighting a losing war in the battle for Trump’s ear. Trump himself has taken increasingly extreme anti-business stances this time around far in excess of his first term, including suggesting that he will impose draconian universal 10% tariffs on all imports from all countries, with additional 10% hikes until the trade deficit is brought into balance; as well as proposing to eliminate the independence of the Federal Reserve. Relatedly, Trump has also embraced dramatic monetary policy ranging from intentional currency devaluation and yield curve control, which would be highly inflationary and undermine the regular functioning of free markets.
The lack of business enthusiasm for Trump is clearly captured by the money trail. Although a few prominent financiers endorsing presidential candidate Donald Trump capture headlines, in reality, these financiers represent a small segment of the business community.
As we’re previously shown, even though 42 of the Fortune 100 CEOs contributed to George W. Bush in 2004, 29 to John McCain in 2008, and 28 to Mitt Romney in 2012; not a single Fortune 100 CEO has contributed to Trump so far in the 2024 election cycle, just like how no CEO donated a single penny to Trump in 2016. In 2020, only two Fortune 100 CEOs donated to Trump, a remarkably weak showing for an incumbent U.S. President. After all, few of Trump’s GOP predecessors were associated with anti-business isolationist, protectionist, or xenophobic positions to the same degree.
In 2015, Trump told me in his Trump Tower office that he admired the anger Senator Bernie Sanders tapped into and wondered about undercutting his progressive message on the far left. He admitted he knew no major business leaders and didn’t like them. In his 2024 bid, he is embracing those instincts and finding far more in common with the far left than with the business community.
Clearly the myth that business leaders are enthusiastic for Donald Trump’s return is a vestige of drama-seeking imagination and not grounded in reality. As JFK warned, “the great enemy of the truth is very often not the lie; deliberate, contrived and dishonest; but the myth, persistent, persuasive, and unrealistic.”
currency devaluation and yield curve control, which would be highly inflationary and undermine the regular functioning of free markets.
The lack of business enthusiasm for Trump is clearly captured by the money trail. Although a few prominent financiers endorsing presidential candidate Donald Trump capture headlines, in reality, these financiers represent a small segment of the business community.
As we’re previously shown, even though 42 of the Fortune 100 CEOs contributed to George W. Bush in 2004, 29 to John McCain in 2008, and 28 to Mitt Romney in 2012; not a single Fortune 100 CEO has contributed to Trump so far in the 2024 election cycle, just like how no CEO donated a single penny to Trump in 2016. In 2020, only two Fortune 100 CEOs donated to Trump, a remarkably weak showing for an incumbent U.S. President. After all, few of Trump’s GOP predecessors were associated with anti-business isolationist, protectionist, or xenophobic positions to the same degree.
In 2015, Trump told me in his Trump Tower office that he admired the anger Senator Bernie Sanders tapped into and wondered about undercutting his progressive message on the far left. He admitted he knew no major business leaders and didn’t like them. In his 2024 bid, he is embracing those instincts and finding far more in common with the far left than with the business community.
Clearly the myth that business leaders are enthusiastic for Donald Trump’s return is a vestige of drama-seeking imagination and not grounded in reality. As JFK warned, “the great enemy of the truth is very often not the lie; deliberate, contrived and dishonest; but the myth, persistent, persuasive, and unrealistic.”