James K Glassman
Forget Mamdani, AOC or El-Sayed. It’s Donald Trump who can lay a strong claim to being America’s first socialist president.
The hallmark of socialism is control of the means of production. In a manner unprecedented in US history, the federal government under Trump has been gaining direct ownership of American corporations – some of them historic icons.
A year ago, the government bought 433 million shares of Intel Corp., the semiconductor manufacturer. Donald Trump (“Trump sees the government as himself,” says Brooke Masters, the US managing editor of the Financial Times in discussing the deal) becomes the largest shareholder in Intel, a half-trillion-dollar corporation, at 10%.
When a Japanese company wanted to purchase US Steel, Trump approved the deal only if the government received a first-ever “golden share”, giving Washington veto power over major corporate decisions. In November, the government made a deal to own up to 20% of Westinghouse Electric. In July, the US took an equity stake in Global Foundries, a profitable chipmaker spun off from AMD, for $300 million.
In the past, the government intervened in a crisis to keep a critical company afloat; the bailout of General Motors and Chrysler in 2008 is the best example. Loans, grants and commitments to purchase products to promote federal priorities have been a regular feature of industrial policy. Those subsidies lean toward socialism. But what the Trump Administration is doing is qualitatively different – a full-on embrace of socialist principles.
“They’re converting loan and grant programs into equity stakes,” said Brent Cebul, an associate professor of history at the University of Pennsylvania who researches business-state interactions. He called the Westinghouse deal “an important precedent-setting disjuncture.”
The Council on Foreign Relations has a deal tracker that lists two dozen businesses in which the Trump Administration has announced or closed an equity investment. One of them is IBM, a 115-year-old company that will receive a $1 billion infusion. IBM has a market capitalization of $223 billion and a stock that’s roughly doubled in the past four years.
Another example of a company that doesn’t need the money is SandboxAQ, an artificial-intelligence start-up backed by NVidia, the most valuable US company, and Alphabet, which ranks third. The US government on June 17 signed a definitive agreement to acquire an equity stake in SandboxAQ, plus royalty payments on sales.
The administration is riddled with Wall Street executives and conservative economists, but that doesn’t seem to matter.
Kevin Hassett, the top White House economic advisor, wrote a recent book subtitled “Stopping America’s Slide to Socialism.” Yet on Aug. 10, he told CNBC that President Trump will decide when and whether to sell the government’s Intel stake.
Hassett said Trump “has an incredible track record of when to buy and sell things.”
Some members of Congress aren’t so sanguine. Sen. Ted Cruz (R-Texas) said in an interview last month, "I don't think the federal government should be in the business of being an equity holder in private companies." Republican Sen. Josh Hawley of Missouri also pushed back.
Sen. Todd Young (R-Indiana), who drafted the foundation of the CHIPS and Science Act, which the White House is using as a justification to own equity, “said at the time the law never intended to let the federal government take a major stake in Intel or any other major company.” This is according to a July 30 report in The Hill that was headlined, “Commerce Department quietly announces 7 new stakes in private companies.”
But where is the outrage from business leaders? Or from conservative think tanks? Not long ago, public enemy number one for the Heritage Foundation was crony capitalism. Holding shares of companies like Intel and U.S. Steel is crony capitalism squared. Inevitably, the Trump Administration will favor companies and industries in which it’s an owner? Yet not a peep out of Heritage.
“Republicans once understood the dangers of the federal government picking winners and losers,” said an editorial in the Washington Post on Aug. 3, "but the Trump administration has been hoovering up shares of private companies at a rate that would’ve made Democratic predecessors blush.”
Look at the deal the Defense Department struck in July 2025 with MP Materials. The government will become the company’s large shareholder at 15% while at the same time guaranteeing the purchase of all the rare earth magnets that MP’s new plant produces for 10 years. The agreement doubled the stock price in a month.
In the Wall Street Journal last year, Greg Ip, the publication’s chief economics commentator, wrote that “President Trump is imitating Chinese Communist Party by extending political control ever deeper into economy.” Ip says that Trump is following his predecessor, Joe Biden, in his interventions, and he brands the White House policy “state capitalism with American characteristics.”
Michael Chapman of the Cato Institute pointed out that Ludwig von Mises, the political economist of the Austrian School, would have called the Trumpian policy “interventionism” – not quite socialism. The problem, wrote Mises, is that “all the methods of interventionism [tariffs, price controls, bailouts, etc.] are doomed to failure.” And that failure inevitably leads to more interventions to fix the failures.
I would call it plain old socialism. Sure, Donald Trump is not steeped in Marxism or any other ideology, but he clearly views the state (i.e., himself), not the free market, as the nation’s economic decision-maker and capital allocator.
The manifestations go beyond the growing equity control of businesses. For example, Trump blasted energy companies recently for being too profitable. They should “give some of that back to the public.” He said to reporters, “Chevron, too much money. ExxonMobil, too much. Too much money.”
In free markets, rising profits are a necessary signal to boost capital investment, increase production, benefit consumers and perhaps whittle some of the profits of incumbents away. But under socialism, the state decides what is “too much money.”
Like socialists the world over, the Trump Administration tries to use classic barriers to the free exchange of goods – tariffs – as a futile means of helping domestic producers and encouraging more onshore investment. In fact, the Trump tariffs, the highest in 70 years, have led to a decline in manufacturing employment.
America rejected socialism for two good reasons: first, it limited personal freedom, and, second, it didn’t work. Yet the socialist ideal still beckons – the idea that the state, embodied either in one person or somehow in the masses, can make people richer or happier by controlling the engines of production. It’s a chimera Donald Trump can’t resist, but the rest of us have to.
James K. Glassman was formerly Under Secretary of State for Public Diplomacy and Public Affairs in the George W. Bush Administration and a senior fellow in economics and technology at the American Enterprise Institute.