President Donald Trump woke up Wednesday morning and decided the market needed a little management.
In just 24 hours, the president unveiled three massive state interventions into different markets that might’ve once looked—and sounded—like unacceptable levels of socialist dirigisme for a Republican to champion. The speed and breadth of the actions reflect a defining feature of Trump’s second term: a growing willingness to abandon the GOP’s traditional laissez-faire posture and exercise direct control over private economic activity.
“He’s taking an extreme left-wing position which looks like state capitalism,” said Jeffrey Sonnenfeld, a longtime corporate governance scholar and the founding dean of Yale’s Chief Executive Leadership Institute. “It is MAGA going Maoist. So it is taking away the discretion of individual managers—the control of the ownership of the business by its stakeholders, by its owners, the decision-making. And it is disrupting the wisdom of markets.”
Sonnenfeld—who says he has known Trump for decades, longer than any current cabinet member, and is preparing to release a book examining what he calls Trump’s “ten commandments”—argued the shift has nothing to do with ideology.
“He’s come up with something new, which is the iron fist of an autocrat,” Sonnenfeld told Fortune. “That’s something which is not seen in capitalism too often.”
In Sonnenfeld’s telling, the president’s recent moves substitute executive discretion for market outcomes, leaving managers and shareholders operating not within a free market, but at the pleasure of the White House.
Housing
“I think [the ban] is a very tempting narrative that people on the left and the right have gravitated towards,” Skanda Amarnath,, cofounder of macroeconomic policy group Employ America, told Fortune. “I do not think it thinks through how much institutional investors are really buying, or what the effect actually is on affordability.”
Taking on the military industrial complex
Hours after the housing announcement, Trump turned his attention to the defense sector, arguably one of the most politically protected corners of American business.
“Executive Pay Packages in the Defense Industry are exorbitant and unjustifiable given how slowly these Companies are delivering vital Equipment to our Military, and our Allies,” Trump wrote. “Salaries, Stock Options, and every other form of Compensation are far too high for these Executives.”
Sonnenfeld argued this move is a direct assault on the legal foundations of American business. He specifically cites the Fifth Amendment’s “takings clause,” which prohibits the government from seizing private property for public use without just compensation.
“There is a provision in the Fifth Amendment which is about illegal confiscatory behavior,” Sonnenfeld said. “What they’re doing now by demanding these stakes… with no compensation of the shareholders to the government is completely unjustified.” In his view, the administration is effectively expropriating the decision-making power of owners and handing it to the state.
Venezuela
Under the arrangement, proceeds from the oil would be placed into an account Trump said was “controlled by me,” with Venezuela required to spend the funds exclusively on American-made goods. By taking control of the 50 million barrels of crude—valued at roughly $3.5 billion—and dictating the exact flow of the resulting capital, the administration has effectively turned another nation’s energy supply into a direct stimulus for the American manufacturing industry, a “closed-loop” system.
Instead of allowing markets to allocate capital and determine winners, the administration is increasingly dictating outcomes: who can buy homes, how executives are paid and how trade itself is conducted. The cumulative effect, Sonnenfeld argued, is not just policy volatility, but also a structural shift in how American capitalism functions, and how we subjectively experience it.
“It’s hard to keep up with the constant shiny new object or wall of sound and distracting things that President Trump does to divert attention from the last fiasco,” Sonnefeld said. “He is always creating a new one.”
