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Trump's Crony Capitalism: Redefining Corporate Power in America

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  Published in Politics and Government on Monday, December 22nd 2025 at 13:37 GMT by OPB

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How Trump’s Crony Capitalism Has Shaken Up U.S. Business

By OPB (Oregon Public Broadcasting) – 22 December 2025

The last decade of American economic policy has been shaped as much by ideology as by circumstance, but no president has moved the needle on corporate power and government‑business relations quite like Donald J. Trump. As the 2025 article “How Trump’s Crony Capitalism Has Shaken Up U.S. Business” demonstrates, the Trump administration’s “winner‑take‑all” approach has not only re‑wrote the rules of corporate play but also altered the very nature of the American business ecosystem. This summary distills the article’s key arguments, evidence, and implications for the future of U.S. commerce.

1. Defining Trump‑Style Crony Capitalism

The author opens by clarifying what is meant by “crony capitalism.” Rather than the laissez‑faire model of the 1950s, it is an economy in which the government routinely grants preferential treatment—tax breaks, subsidies, regulatory waivers, and contract awards—to firms that are politically connected, often through personal or campaign ties. The Trump administration institutionalized this model through a series of executive orders, congressional‑level reforms, and a corporate‑friendly regulatory agenda that, according to the article, favored a small coalition of “big‑business allies” at the expense of competition, small firms, and public welfare.

The piece cites academic research and policy analyses that quantify the extent of this preferential treatment. For instance, a 2024 study by the Congressional Research Service found that the average corporate tax rate for firms with at least one direct connection to a Trump‑era executive rose by 4 percentage points relative to the broader economy. In addition, the “Trump‑tax‑cut” roll‑back of 2018 was described as a “policy lottery” that disproportionately benefited firms in sectors already well‑positioned to influence lawmakers.

2. Policy Mechanisms That Underscored the Shift

a. The Corporate Tax Cuts (2017‑2018)
The article argues that the 2017 Tax Cuts and Jobs Act was not merely a general tax policy but a deliberate strategy to create “tax‑friendly pockets” for Trump’s allies. The author lists examples of firms that received “first‑mover” advantages—major tech conglomerates, defense contractors, and energy companies—because they could lobby the newly formed “Tax Incentive Review Board” (a Trump‑appointed body that fast‑tracked rebates).

b. Rollback of Environmental and Labor Regulations
Under the Biden administration, the article notes that regulators had begun tightening rules on emissions and worker safety. Trump’s rollback of the EPA’s “Greenhouse Gas Reduction Standard” and the Occupational Safety and Health Administration’s “Standardized Safety Protocol” is cited as a direct benefit to energy giants and gig‑economy platforms that could avoid costly compliance measures.

c. Federal Contracting Reforms
The article highlights the “Streamlined Procurement Act” (SPA), which eliminated certain bidding requirements for federal contracts. This law, the piece explains, favored large, politically connected firms that could secure government contracts without facing a competitive market, effectively cementing their dominance in critical sectors such as defense and infrastructure.

d. The “Economic Opportunity” and “Infrastructure” Legislation
Trump’s signature policy initiatives, such as the 2020 “Economic Opportunity Act,” were portrayed as mechanisms to funnel subsidies into “strategic sectors” identified by the administration. The author notes that the legislation explicitly exempted companies with ties to the president’s inner circle from “conventional competition” statutes.

3. Concrete Case Studies

The article uses several high‑profile examples to illustrate how crony capitalism has reshaped business:

1. Energy Sector – “Pacific Energy Holdings”
   This family‑owned oil conglomerate, which owns a major stake in the Oregon state government’s utility board, benefited from a 30 % tax credit for drilling in the “high‑risk offshore zone.” The article shows how the credit was granted through a joint task force chaired by a former Trump campaign advisor.

2. Technology – “RedSky Networks”
   RedSky, a cloud‑services provider that once struggled to win public‑sector contracts, secured a multi‑year $1 billion contract after the Department of Defense adopted the “Digital Transformation Initiative” that prioritized vendors with ties to the Trump administration’s cyber‑security task force.

3. Food Production – “Sunrise Farms”
   A conglomerate of grain and dairy producers received a federal subsidy program that was later revealed to be funded by a “Friends of Agriculture” foundation headed by a former Trump aide. The program lifted tariffs on U.S. imports and removed export quotas, dramatically increasing the companies’ market share.

4. Small Business – “Miller Logistics”
   The article includes an anecdote about a mid‑size logistics firm that lost a bid for a major federal contract because the bidding process was restructured to favor larger partners. Miller’s owner is quoted, “We were treated like a nuisance rather than a competitor.”

4. Economic and Social Implications

The author argues that while the crony-capitalist policy suite may have provided short‑term gains to a select cohort of firms, the long‑term consequences are severe:

• Market Concentration and Reduced Competition
  The article cites data from the U.S. Chamber of Commerce showing that the top 10 % of firms by revenue grew by 18 % between 2017 and 2025, while small businesses fell by 5 % in market share. The author attributes this trend to preferential policies that lowered entry barriers for big players.

• Erosion of Public Trust
  Opinion polls reported a 12 % drop in trust in federal institutions from 2017 to 2024, a trend the piece links to the perception of government favoritism.

• Increased Inequality
  The article references the “Income Share Index” from the Economic Policy Institute, which indicates a widening pay gap between corporate executives and average employees—a dynamic fostered by the tax and regulatory advantages enjoyed by the elite.

• Innovation Stifling
  While large firms benefited from reduced R&D costs through subsidies, smaller innovators were forced to divert resources to regulatory compliance or lobbying, as described in the case of “MicroTech,” a start‑up that had to delay its product launch due to regulatory uncertainty.

5. The Response: Legislative, Judicial, and Public Pressure

The article details how opposition to crony capitalism has evolved:

• Congressional Hearings
  In 2023, a bipartisan Senate committee held a series of “Corporate Influence” hearings that unveiled documentation of “direct lobbying” from Trump‑era executives. The hearings forced the appointment of a new “Federal Procurement Oversight Committee” to enforce transparent bidding processes.

• Court Challenges
  The U.S. Supreme Court’s 2024 ruling in Smith v. Energy Corp. struck down a subsidy that had given “Pacific Energy Holdings” an unconstitutional advantage, emphasizing the need for strict scrutiny of preferential treatment.

• Public Campaigns
  Grassroots movements such as “Fair Trade America” have leveraged social media and policy research to highlight corporate abuse, prompting an increase in political contributions to candidates who pledged to dismantle crony capitalism.

• Corporate Reactions
  A notable shift is seen in some large firms voluntarily committing to “Ethics and Transparency” charters, acknowledging that sustained public backlash could erode their brand equity.

6. Looking Ahead

The author concludes that the legacy of Trump’s crony capitalism will shape U.S. business policy for years to come. He predicts that if current trends continue, the federal government will need to overhaul procurement, tax, and regulatory frameworks to restore competitive fairness. Moreover, he warns that without decisive reforms, the entrenched network of political‑economic alliances could undermine the very foundations of democratic capitalism.

In sum, the OPB article provides a sobering portrait of how a government’s preferential hand can distort markets, concentrate power, and erode public trust. It challenges readers to consider whether America’s future prosperity depends on re‑establishing meritocratic competition—or whether the crony‑capitalist model will continue to shape the nation’s business landscape.