Trump's deal-making approach has given rise to crony corporatism, with Big Tech and Big Pharma taking control
By ljdevon // 2025-10-03
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In a dramatic departure from the principles of free-market capitalism, the Trump administration is quietly constructing a corporate state where politically connected companies receive unprecedented government favors in exchange for advancing White House political objectives. This emerging system of crony corporatism represents the most significant transformation of American economic policy in generations, replacing competitive markets with government-directed corporate partnerships that benefit both political leaders and their favored business allies. As the administration pressures companies across nearly 30 industries to strike deals that advance what it calls "national and economic security goals," America stands at a dangerous crossroads where the line between corporate boardrooms and government agencies is being systematically erased in a mad rush to secure political victories before the 2026 midterm elections. Key points:
  • The Trump administration is pursuing deals across semiconductors, AI, pharmaceuticals, critical minerals, and numerous other sectors, offering tariff relief, revenue guarantees, and government equity stakes in exchange for corporate cooperation.
  • Commerce Secretary Howard Lutnick has emerged as the administration's lead deal-maker, openly declaring "if we're going to give you the money, we want a piece of the action"
  • A little-known federal agency, the International Development Finance Corporation, seeks a massive expansion to $250 billion in financing power to create an equity fund for strategic sectors.
  • Pharmaceutical executives receive near-daily calls from White House staff demanding production changes and political cooperation.
  • Companies learn that political optics are as important as business fundamentals, with Eli Lilly facing administration wrath for announcing new manufacturing plants without including Trump.
  • The administration uses multiple funding mechanisms including $550 billion from Japan's trade agreement and converted CHIPS Act grants to finance its corporate partnerships.

The birth of American corporatism

The framework now taking shape represents a fundamental reordering of the relationship between government and private enterprise. What administration officials describe as a "whole-of-government approach" to deal-making bears striking resemblance to the corporatist models that have historically characterized authoritarian economic systems. Under this arrangement, the government officially runs the economy through direct partnerships with business leaders, effectively replacing market competition with political favoritism. Commerce Secretary Howard Lutnick, a former bond trader turned government power broker, has become the architect of this new system. His blunt admission that "if we're going to give you the money, we want a piece of the action" reveals the transactional nature of this arrangement. Lutnick has already overseen the government's 10 percent equity stake in Intel and secured a "golden share" as part of Nippon Steel's acquisition of U.S. Steel, establishing a pattern of government intrusion into corporate ownership that would have been unthinkable under previous Republican administrations. This corporate state model creates a self-reinforcing cycle where expanding government power invites more corporate lobbying, which in turn justifies additional government intervention. The administration is building what amounts to a shadow government of Wall Street deal-makers, with Lutnick recruiting tech banker Michael Grimes from Morgan Stanley and M&A lawyer David Shapiro from Wachtell, Lipton to head up government negotiations with private companies. These appointments blur the line between public service and private gain, creating inherent conflicts of interest that threaten both economic efficiency and democratic accountability. Take for instance Pfizer’s $70 billion deal with the U.S. government. It is essentially a PAY-OFF, granting preferential treatment and helping Pfizer avoid accountability.

Pharmaceutical shakedowns and corporate coercion

The administration's strong-arm tactics have become particularly evident in the pharmaceutical industry, where executives report receiving near-daily calls from White House staff including Chief of Staff Susie Wiles. These communications represent a form of corporate coercion that uses government power to dictate business decisions for political advantage. When Eli Lilly announced new manufacturing plants without including Trump in September, the company immediately received an angry call from administration officials demanding to know why the president wasn't allowed to announce it himself. This incident reveals the true priority of these arrangements: political theater over substantive policy. Two sources confirmed that optics are considered "just as important as the deals themselves," with the administration insisting that all agreements must be announced from the White House to maximize political benefit. The recent deal with Pfizer CEO Albert Bourla, in which the company agreed to cut drug prices in exchange for relief from planned tariffs, was carefully staged in the Oval Office as Trump declared "the United States is done subsidizing healthcare of the rest of the world." Beyond the political pageantry, these arrangements create dangerous precedents for government interference in corporate decision-making. London-based AstraZeneca has faced pressure to consider moving its headquarters to the United States, while pharmaceutical companies generally are being directed to increase production of specific drugs including insulin, cancer medications, and cholesterol treatments. This micromanagement of corporate strategy represents a form of central planning that undermines market signals and consumer choice in favor of political objectives. Trump's rapid deal making approach to America's economic collapse is setting up a framework where select corporations will exploit and rule over the country for years to come.

The financial architecture of corporatism

The administration is constructing an elaborate financial infrastructure to support its corporate state vision. The International Development Finance Corporation, originally established to fund overseas development projects, now seeks a massive expansion from $60 billion to $250 billion in financing power. A June proposal before Congress would establish an equity fund specifically tasked with shoring up key sectors including infrastructure, energy, critical minerals, and supply chains. This expansion would transform the agency from an international development organization into a massive domestic investment vehicle with virtually unlimited authority to intervene in the American economy. Simultaneously, the Commerce Department is creating a new U.S. Investment Accelerator seeded with $550 billion from Japan as part of its trade commitments. Both the Investment Accelerator and the expanded Development Finance Corporation effectively replace the sovereign wealth fund Trump originally planned but subsequently abandoned. This multi-pronged approach gives the administration multiple avenues to inject government capital into favored companies while taking ownership stakes in return. The administration has demonstrated remarkable creativity in funding these corporate partnerships. In the case of Intel, officials converted a CHIPS Act grant into a 10% equity stake through the Commerce Department. At the Department of Energy, loan program director Greg Beard asked Lithium Americas for a five percent to 10 percent equity stake in exchange for advancing a $2.26 billion loan. These transactions represent a new form of government venture capitalism where taxpayer funds are used to acquire ownership in private companies, putting the government in the business of picking winners and losers in direct contradiction to free market principles.

The dangerous precedent of government equity stakes

The administration's insistence on taking equity positions in private companies represents perhaps the most radical departure from American economic tradition. The MP Materials deal serves as a template for future arrangements, with the Pentagon taking a 15 percent stake through the Cold War-era Defense Production Act, establishing a floor price for future U.S. purchases of critical minerals, and securing a $500 million purchase commitment from Apple for recycled magnets. This three-pronged approach combines government ownership, price guarantees, and corporate partnerships to create a fully managed market segment. Industry executives report genuine fear about these government equity demands. One critical minerals executive confessed that his colleagues worry about walking "into a meeting about loans or grants and they say: 'We need 10% of your company.'" This concern is well-founded given the administration's track record of demanding ownership stakes across multiple sectors. The government's transformation from regulator to business partner creates inherent conflicts of interest that corrupt both the market and the regulatory process. Legal experts note that these arrangements may prove unstable across administrations. Y. David Scharf, chairman of law firm Morrison Cohen, which represents companies in talks with the government, identified the primary concern: "Is there an unwind that has to happen if there is a 180-degree opposite view in the next administration?" This uncertainty creates business risk that may ultimately deter the kind of long-term investment the administration claims to encourage. The Trump administration's corporate state model represents the most significant transformation of American economic policy in living memory. By replacing market competition with government-directed corporate partnerships, this system threatens both economic freedom and political accountability. As the administration rushes to secure political wins before the 2026 midterms, America faces the prospect of permanent damage to its economic institutions and the emergence of a crony corporatism that benefits political and corporate elites at the expense of everyone else. Sources include: Zerohedge.com AtlasSociety.org Reuters.com NaturalNews.com
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