State Capitalism, American Style

They say America is the land of free enterprise. But lately, it feels like big business runs on political favors as much as hard work—and the story of the economy is whatever the White House says it is. Under Trump, the government isn’t just setting the rules—it’s cutting deals, swapping gifts, deciding which companies win, and even deciding which facts about the economy the public gets to see.

If you’ve ever thought the system was rigged for the powerful, this is how it happens. And it’s not coming from Beijing—it’s happening right here in Washington, with a red, white, and blue label.

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For most of our history, American business has been about companies competing in open markets with minimal government interference. But now, the Trump administration is pushing us toward something different: state capitalism.

In state capitalism, the government has a heavy hand in the economy—steering investments, demanding a cut of profits, and using political influence to shape corporate decisions. It’s the kind of model you might expect in China, but these days, it’s being remade with “American characteristics” (Wall Street Journal).

How It’s Happening

Recent examples show how the Trump administration is reshaping the line between government and business:

• Profit-sharing demands – The administration is requiring certain chipmakers to hand over a cut of their profits to the U.S. government in exchange for export licenses.

• Public pressure theater – President Trump publicly demanded Intel CEO Lip-Bu Tan resign over his previous financial ties to Chinese firms. Days later, after a White House meeting, Trump praised Tan. No policy changes—just a public reminder that the president can put a corporate leader on the defensive at will.

• Golden gifts and golden carries – In a White House event, Apple’s Tim Cook presented Trump with a U.S.-made glass plaque on a 24-karat gold base. Moments later, Trump announced Apple would boost its U.S. investment by $100 billion and granted the company an exemption from a 100 percent semiconductor tariff (Business Insider, Reuters). Symbolism and policy moved hand-in-hand.

• Pledges under direction – Trump says he has secured $1.5 trillion in investment commitments from Japan, the EU, and South Korea—pledges he has promised to personally direct toward U.S. goals. These are broad promises, not binding deals, and the idea of one person steering them raises questions about political favoritism (FT, WSJ).

The New “Tax” on American Exports

Another change is hitting the tech sector directly in the wallet. The administration told Nvidia and AMD they could keep selling certain high-end chips to China—but only if they paid a 15% tax on those sales to the U.S. government.

This isn’t a tariff on imports. It’s a direct skim off the top of U.S. companies’ overseas business, tied to a government-issued export license. Investors noticed, with both companies’ stocks dipping after the news.

What This Means for the Rest of Us

The U.S. still isn’t China. Companies are privately owned, and courts can push back. But the playing field is shifting. Political relationships now matter as much—maybe more—than market performance.

That might help the government push national goals faster, like building more factories or competing with China in tech. But it also risks turning the economy into a political game, where only the well-connected win and everyone else pays the price.

History gives us plenty of warnings about how this can go wrong. In the 1970s and 80s, the Soviet Union’s economy rotted from within because leaders surrounded themselves with loyalists who told them what they wanted to hear, not what was true. By the time reality broke through, factories were obsolete, shelves were empty, and the state could no longer prop up the system.

In more recent times, Venezuela’s leadership steered industries and foreign investment through political loyalty rather than competence. That made the rich and connected even richer—but it left the country’s oil infrastructure crumbling and the economy in freefall.

When leaders control the purse strings and the scoreboard, everyone with power learns to play the same game: keep the boss happy. Facts get massaged, problems get buried, and bad news never reaches the top until it’s too late.

When Facts Don’t Matter

That’s why a free flow of accurate information is as important to an economy as capital and labor. But under this administration, inconvenient facts are treated as threats.

Earlier this year, Trump fired the head of the Bureau of Labor Statistics after she refused to delay the release of jobs data that showed weak employment growth. The White House claimed the commissioner was “politically biased,” but her real offense was doing her job: publishing the numbers as they were, not as the President wanted them to be.

When you combine state-directed business with fact control, you create a dangerous loop. The same government that picks economic winners also controls the story about how the economy is doing. If the numbers don’t match the narrative, the numbers change—or the people in charge of them are removed.

In the short term, this might boost political approval or stock prices. In the long run, it’s a recipe for decisions based on flattery, not reality—and for an economy that looks strong on paper while quietly eroding underneath.

Trump Fired the Jobs Commissioner. That Won’t Fix the Economy.

President Trump just fired Erika McEntarfer, the head of the Bureau of Labor Statistics. Why? Because the agency revised recent job numbers downward. In May and June, it turns out we didn’t create nearly as many jobs as first reported.

Instead of addressing the problem, Trump chose to fire the person in charge of telling the truth about it.

Let’s be honest: that’s not leadership. It’s blame-shifting.

McEntarfer is a 20-year government professional, not a political hack. The BLS is a fact-based agency that gives all of us—businesses, workers, and policymakers—accurate data so we can make smart decisions. Firing her just for reporting numbers the White House didn’t like? That’s a red flag.

And let’s talk about why the numbers went down.

Tariffs and government job cuts are creating real uncertainty in the economy. When businesses don’t know what rules or costs are coming next, they hold back on hiring. And when the federal government slashes jobs in key areas—like construction, infrastructure, and support for working families—it hurts employment numbers even more.

At the same time, prices are rising. Tariffs raise costs on everyday goods—food, cars, tools, you name it. So we’re seeing inflation and fewer jobs. That’s a bad combination.

Instead of fixing the root problems, Trump fired the messenger.

That’s not conservative. That’s not smart. And it doesn’t help American workers or families.

We need leaders who face facts, tell the truth, and work to build a strong, stable economy. Not leaders who fire good people just to protect their image.