What’s Trump Doing? Is It Statist Capitalism, Maoist Socialism, or Mafia Style Extortion?

President Trump has gone rogue, defying GOP orthodoxy, leaving conservatives wondering what they have wrought. Where is this coming from?

You didn't get to build in New York City or New Jersey without dealing with the Mafia back in the years when Donald Trump started out by rehabbing the Commodore Hotel next to Grand Central and going on to build gambling casinos in Atlantic City. The amounts of money he is forcibly extracting from law firms, higher education, and now corporations, says that he learned a lot in those days.

The difference between then and now is scale. In his second term, Trump realized straightaway that, as capo dei capi sitting at the pinnacle of power in the White House, the numbers could be huge — far beyond what he saw change hands in the real estate world of decades ago.

As soon as he decided to run for the presidency ten years ago, the media was savvy enough to see Trump as transactional. You do something for me, I'll do something for you (maybe). You do something against me, I’ll do something to you (for certain).

He first went after law firms whose attorneys had been involved in investigating him or had represented clients in lawsuits against him. "Those law firms did bad things. They went after me for years".

In retaliation, Trump's executive orders stripped the security clearance of lawyers at such firms, denied entry to federal buildings, and barred government employees from having contact with the firms. As example, because Andrew Weissmann had been at Jenner & Block years before becoming lead prosecutor on the Mueller Russia probe, the whole firm was denied access to the U.S. government.

Fearful of losing clients who need access, Paul, Weiss, Rifkind, Wharton & Garrison, a major New York based firm with international clients, was first to cave. It agreed to perform $40 million worth of pro bono work on whatever Trump chooses. Skadden, Arps, Slate, Meagher & Flom was next to succumb, but the ante was raised to $100 million in pro bono work. Seven other firms would follow suit. Their capitulation totaled close to a billion dollar shakedown.

Others began to fight back. Just over 500 smaller firms filed an amicus brief supporting Perkins Coie in its lawsuit that fights the government’s edict. Not the bigger firms, though. Quaking in fear of Trump, only 10 of the top 100 firms ranked by revenue signed the brief.

Trump broke a law and inserted himself into the private sector the first day he entered office. Out of concern for national security, Congress had enacted a law that gave China-controlled TikTok 90 days to find an American buyer or be shut down. The platform had just gone dark when the ban, upheld by the Supreme Court, took effect. But Trump is fond of TikTok – he has 15 million followers — so that first day he ignored the law and the court and issued an executive order that extended the deadline another 90 days. He would do so twice more, allowing Beijing to continue gathering the personal data of Americans and airing propaganda that casts China in a favorable light. In utter violation of the law, Trump has now extended the deadline indefinitely.

In his intrusions into corporate American, money is the key demand. He sued CBS’s “60 Minutes” for editing of an interview with Kamala Harris before the election he did not like; CBS caved for $16 million rather than win an easy case because the pending sale of Paramount, which owns CBS, depended on Trump’s approval. A bribe many said. The sale was approved.

But it was the Intel episode that raised eyebrows. Trump had called for the immediate resignation of CEO Lip-Bu Tan out of concern for his ties with the Chinese Communist Party (CCP). Fair enough, but then Mr. Tan paid a visit to the White House. In a scene straight from Vito Corleone in "The Godfather" saying "I'm gonna make him an offer he can't refuse", Trump related what he said to Mr. Tan:

"I’d like you to give 10 percent of Intel to the United States of America — not to me, to the United States of America, and I said if you have them as a partner, the United States as a partner, I think it’d be a very good thing for Intel, and he thought about it…and he said ‘I like that idea very much, we have a deal’…I just made $10 billion or $11 billion for the United States of America… but I hope I’m gonna have many more cases like it."

Concern for Tan’s CCP connections evaporated, and he kept his CEO job. Trump later boasted on social media that he would “make deals like that for our Country all day long.”

President Biden's CHIPS Act had awarded roughly $11 billion to chip designer and foundry operator Intel in the interest of lessening reliance on offshore sourcing of sophisticated semiconductor product. Why shouldn't the government get something in return, goes the government’s argument. But the CHIPS Act had conditioned the release of funds on achievement of milestones, with $8.9 billion yet to be earned. Trump tossed that aside and gave Intel the whole amount, oversight free.

The government says its stake will be "passive", will not have any board seats or governance rights, but, as New York Times columnist Bret Stephens wrote, "That’s like letting a tiger into your house on the solemn promise that it won’t raid the fridge or eat your children".

Trump already has "many more cases like it", but none with any claim to Intel’s fair trade. In return for approving Nippon Steel’s acquisition of U.S. Steel, the administration helped itself to a “golden share” that gives the government veto power over plant closures and layoffs. Defense Secretary Pete Hegseth is thinking about taking shares in defense contractors, says Commerce Secretary Howard Lutnick, or even nationalizing Lockheed Martin on the grounds that 97% of the company’s revenue is from U.S. government contracts.

More treacherous is Trump selling indulgences at risk of national security. Two of our major chip producers, Nvidia and AMD have been restricted from selling chips into China in order to at least hinder that nation's runaway military buildup and its race to win the artificial intelligence sweepstakes. For Trump, money takes precedent over national security. He reversed policy by allowing the companies to sell certain advanced chips to China in return for the U.S. pocketing 15% of the sales revenue. How is this not mob vigorish — taking a cut of the action as a kick-back?

The U.S. relies almost entirely on China for rare earth materials needed for the new electric age, which makes critical the development in the U.S. of its own rare earth deposits. The government has supported many industries with subsidies and tax relief — oil and gas, and sun and wind renewables are examples — but without taking any ownership. The Pentagon is now taking an altogether different tack. It is spending $400 million to buy a 15% stake in MP Materials, a large American miner of rare earths.

Mr. Trump ordered Coca-Cola's CEO to replace the corn syrup the company uses in its sodas with cane sugar, with no scientific evidence that it is somehow better for us. By tailoring its products to suit Trump’s preference, the company is taking direction from him, not its board or shareholders.

"American conservatism under President Trump is changing into something unrecognizable", writes Stephens. In Trump’s actions we are seeing a surprising blend of mafia coercion and the latter-day Maoism of Xi Jinping. Government control of publically-owned business is the state-managed capitalism practiced in China. The right constantly accuses the left of socialism, yet here is Trump dabbling in "government ownership of the means of production", which is part of socialism's definition. It’s an extraordinary turn for capitalist America. Adam Smith, Friedrich Hayek, Ayn Rand, and Milton Friedman are being tossed in the dustbin. Of course, Trump has read none of them. Greg Ip writes in The Wall Street Journal, “The US marches toward state capitalism with American characteristics", a twist on the CCP's “capitalism with Chinese characteristics”.

There are multiple causes for alarm. Will the government be reluctant to exit a company it partly owns, chasing the original taxpayer-dollar investment with taxpayer subsidies to prop up a failing company? In an election year to avoid bad publicity will the government block layoffs a company needs to make to prevent loses? Won’t government ownership tilt the playing field and inhibit investment in rival companies? If chips and steel are so important as to need government involvement, won’t lawmakers decide that so are food and medicine?

The outbreak of antisemitism on college campuses that followed the October 7th Hamas attack on Israel two years ago was grounds for Trump’s attack on the nation’s universities, but the scope of the assaults has gone far beyond antisemitism.

Going after the elite universities plays to his base of resentful non-college-educated voters, to be sure, but what Trump is after is dominance. He wants these institutions to be obedient to his dictates — to alter their curricula, to scrub DEI policies, to achieve "viewpoint diversity" in academic staffing, to get rid of left-wing cultural wokeism. He wants to oversee admissions, scrutinize the social media of foreign students to look for criticism of America, cancel their visas if such free speech is found.

And he wants the universities’ money. The template is to retract government research funding, dictate changes they must make, and hit them, absent any due process, with colossal fines they must pay to get their research money restored.

Harvard in particular has incurred Trump's wrath for daring to fight back with lawsuits. One seeks return of the $2.2 billion in funding withdrawn or frozen, the second is against Trump’s attempt to block international students. A federal judge in Massachusetts just ruled in the university’s favor on the first suit, deciding that Trump illegally cancelled the research grants.

But Trump's psychological illness makes losing inconceivable so he will push for unconditional surrender, even threatening to pull Harvard's tax exempt status and void its patents. There was talk of Harvard considering paying the government $500 million, but that may have been shelved as a result of ten thousand alumni signing a letter demanding that the Crimson remain defiant.

Columbia University saw $1.3 billion in annual federal grant funding withheld over antisemitism and pro-Palestinian demonstrations but there was no demand for a money heist — that is, not until a May meeting when Trump was told of a deal worked out by cabinet officials and aides. The Times reported that Trump impulsively made a new demand. The opportunity of money had occurred to him:

"The university's cost for a deal suddenly went from zero dollars to nine figures in the course of a single meeting."

Trump wanted the university to pay $200 million. The amount was far less than Harvard's penalty because Columbia had taken itself "off the hot seat", said Trump, by making no legal challenge. "Every time they fight they lose another $250 million", he had said about Harvard.

These wildly outsized dollar amounts bear no relation to student antisemites. This is outright extortion, like a Mafia "protection" racket where businesses must pay the mob, and are warned "it's a nice business you've got here, it would be a shame if something happened to it".

The administration froze $790 million of research funding to Northwestern without concern for halting hundreds of projects such as active clinical trials of potentially life-saving drugs. For now, the university is paying to keep the programs alive with its endowment funds, but President Michael Schill, twice hailed to testify before a congressional committee about campus antisemitism, has resigned.

Discovering how easy the shakedown racket is — far in excess of anything he would have observed in the Mafia's dealings — Trump most recently has stunningly demanded $1 billion from the University of California, Los Angeles (UCLA), while freezing $300 million of its funding.

Universities are being told that these capriciously arrived-at amounts are not negotiable, just raw shakedowns, as said by California Governor Gavin Newsom:

"A billion-dollar political shakedown from the pay-to-play president…disgusting political extortion.”

Newsom has threatened that the state will sue, to which the 28-year-old power-drunk press secretary Karoline Leavitt replied, "Bring it on, Gavin".

It won't stop there. The Trump administration had listed over 60 universities it intends to fleece. Higher education is to pay for his government's deficit, expected to be $1.4 trillion in fiscal 2026. Lutnick angrily said to Axios's Mike Allen,

“Universities, who are getting all this money. The scientists get the patents, the universities get the patents, and the funder of fifty billion dollars, the U.S. government, you know what we get? Zero!"

He thinks the government should get half of whatever the universities make from their research. Lutnick and unnamed others are thinking of a "master global" revenue or profit-sharing deal that all universities must sign onto in order to get research funding — funds to do what the government itself has asked universities to do for the good of the nation.

Universities paying extortion in return for restoration of research funding should be wary of Trump honoring his end of the deal. He has a long history of stiffing creditors and then, when he came into office, abrogating even international agreements. He has twice had the U.S. withdraw from the Paris climate accords, and has imposed stiff tariffs against trading partners Canada and Mexico in blatant violation of the United States-Mexico-Canada Agreement that Trump himself negotiated during his first term. Universities may pay and then find themselves wondering if the research money will ever show up.

Suresh Naidu, who teaches economics and international and public affairs at Columbia, says that even if Trump honors current deals, Trump is “unlikely to end the attacks”:

"The federal government and this administration are simply too powerful and too arbitrary to be credibly bargained with. Do we really think this arrangement, however destructive of academic autonomy it is, will prevent the Trump administration from stopping the money again?"

And like the mafia extorting protection money every month, reasons would be fabricated for the megadollar shakedowns to resume.