Donald Trump’s Orgy of Corruption
Trump made the economy dependent on him, and now he’s shaking everybody down
A few months ago, Donald Trump held a special dinner at one of his golf clubs exclusively for the top buyers of his cryptocurrency, “meme coin,” as a reward for those who had collectively spent $148 million to line the president’s pockets. Democratic Senator Elizabeth Warren denounced it as “an orgy of corruption.” I don’t often agree with the senator from Massachusetts, but she’s right. And it’s not just one dinner.
Donald Trump promised to be a pro-business president. But instead of getting government out of the way and setting clear rules that everyone in the market can follow, he has instead meddled personally in setting policy on trade and tariffs, deciding who gets prosecuted and who get off the hook, and doling out favors and punishments. And then he set up his businesses as easy conduits for favor-seekers to put money in his own pocket.
Get Out of Jail Free
The Financial Times recently reported that “An American financier invested $100 million in the Trump family’s flagship bitcoin project just nine weeks after a probe into his crypto business was dropped by the Trump administration.” To be sure, any pro-cryptocurrency president would be likely to reduce enforcement actions against crypto companies. But dropping this particular investigation is part of a wider pattern of Trump suspending enforcement and, in some cases, dangling the prospect of pardons for those who personally enrich him.
The most notorious example is Chinese crypto promoter Justin Sun, who was accused by the Securities and Exchange Commission of secretly paying celebrities to promote his crypto and engaging in “wash trading,” a kind of pump-and-dump scheme in which he rapidly buys and sells his own crypto tokens to create a false impression of massive public interest. After the election, Sun pumped $75 million into tokens from Trump’s crypto firm World Liberty Financial. And shortly after Trump took office—poof, the charges against Sun went away.
Similarly, the founder of the crypto firm Binance is reportedly negotiating an investment in Trump’s firms even as he seeks a pardon on money-laundering charges.
The rules of the game were established in a case where Trump gave a pardon for tax evasion to a man whose mother had just spent $1 million at a Trump campaign fundraiser. The judge who sentenced the man had intoned that “there ‘is not a get-out-of-jail-free card’ for the rich.” But there is such a card in Trump’s game of Monopoly.
The corruption isn’t just about money. Sometimes it’s also about political favors. Just as Trump uses his pardon power and prosecutorial discretion to make threats and dole out favors, so he also asserts direct political power over previously independent regulatory agencies. Then he uses this power to shake down media companies, both for money and for friendlier news coverage.
The most notorious case is Paramount, the parent company of the broadcaster CBS. Paramount had long been working on a big merger with a deep-pocketed production company. But the deal required approval from the Federal Trade Commission, which requires certification from the Federal Communications Commission. Trump has installed a loyal crony at the head of the FCC and went so far as to fire the Democratic-appointed commissioners at the FTC. These agencies held up the merger while Trump sued CBS for massive damages in a frivolous lawsuit.
Paramount recently settled that suit after top editors at CBS’s flagship investigative show “60 Minutes” resigned in protest against editorial interference aimed at softening their coverage of Trump. His regulatory control over the business side of Paramount has given him control over their editorial choices.
“I Own the Store”
Nowhere is Trump’s power to exact favors greater than in his assertion of arbitrary and unilateral power over tariffs. Trump has imposed tariffs, lifted them temporarily and threatened to apply them again, while also granting myriad small exceptions for very specific products that affect very specific companies.
Here’s what that exception-granting looks like, according to a report in The New York Times:
When President Trump’s steep tariffs threatened to send the price of iPhones soaring, Apple’s chief executive, Tim Cook, called the White House—and soon secured a reprieve for his company and the broader electronics industry.
That’s one of the deals we know about—though we don’t know what Cook traded in return. The investigative outfit ProPublica provides a wider overview of suspicious patterns of exemptions.
One item that made the list is polyethylene terephthalate, more commonly known as PET resin, the thermoplastic used to make plastic bottles.
Why it was spared is unclear, and even people in the industry are confused about the reason for the reprieve.
But its inclusion is a win for Reyes Holdings, a Coca-Cola bottler that ranks among the largest privately held companies in the U.S. and is owned by a pair of brothers who have donated millions of dollars to Republican causes. Records show the company recently hired a lobbying firm with close ties to the Trump White House to make its case on tariffs.
Even an article in National Review concluded that imposing massive tariffs, then creating a huge list of exemptions, is a strategy of “rent extraction” from favor-seeking businesses.
Trump sees himself as owner and manager of the entire American economy, comparing it to a store and boasting, “I own the store.” It’s natural, in his view, to charge everyone a personal fee for their place in it.
Then, of course, Trump wields power to grant or rescind government contracts and subsidies. This power is something he is already using against universities, threatening to block millions in scientific and medical research funding unless they back his ideological agenda. He is also using it against Congress, using the DOGE commission to block congressionally mandated funding. While Elon Musk was still running it, members of Congress would have to beg for “Elon relief” to restore money for projects in their districts. Now, they will have to beg Trump.
In a totally predictable turning of the tables, Trump then threatened to use this power against Musk himself, retaliating against Musk’s critical comments by threatening to cancel his many billions of dollars in government contracts. Musk’s business empire was built on government subsidies, and without them his companies would lose up to $48 billion in future revenue. No wonder Musk backed down and issued an uncharacteristically timid apology.
Trump has made his own personal favor a necessity for being able to stay in business in the United States, forcing everyone to court his favor, either by backing his agenda—or simply by paying him money, which he has made far easier by embracing cryptocurrency.
The Perfect Use Case for Cryptocurrency
A man both serving in the presidency and owning such varied and active businesses would present a massive conflict of interest under any circumstances. It would be hard for him not to be influenced by the people who are making him richer. Thus, we’ve seen the spectacle of Trump’s sons following after him in his trips around the world and making deals for new Trump-branded hotels and resorts, often funded by foreign leaders. On a smaller scale, Trump has been selling spectacularly overpriced watches with his brand on them, which is a great way for a suppliant in the Oval Office to let Trump know, without a word being said, that he has transferred the better part of $100,000 into the president’s bank account.
But all that is old-fashioned. Trump has found the perfect modern way for petitioners to pay him off: cryptocurrency. This term refers to “currency” that isn’t backed by a physical commodity like gold, nor by the taxing power of a government or the financial reserves of a central bank. Cryptocurrency is backed by nothing but the mass psychology of online speculators. That’s especially true of the “meme coins” Trump has been issuing in his name and his wife’s name.
A meme coin is backed purely by the frenzy of speculators looking to cash in on the fame of a celebrity or a fleeting fad—and of course, by the enthusiasm of insiders who are trying to pump up the meme coin before they cash out and leave the suckers holding the bag. A big investor rushing in to buy millions of dollars of Trump’s meme coins has little expectation he will ever get that money back. By raising the nominal value of the meme coin, however, he can massively increase the net worth of the president and enrich the insiders around Trump. More to the point, he knows that they know he did it.
In effect, meme coins are a way to directly transfer money from a wealthy favor-seeker to the president, out in the open and apparently legally, since it is nominally an “investment” in one of Trump’s ventures. But it is obviously just a bribe. Hence the dinner where top buyers of Trump’s meme coin gathered in the hope of gaining influence over him.
Trump’s and his supporters’ crypto dealings have normalized the practice of the president blatantly profiting from his office and doing it all out in the open. So Trump has been emboldened to accept a $400 million ultraluxury “flying palace” from the royal family of Qatar, to be used as the new Air Force One—but to go with Trump to his presidential library afterward, for his personal use.
Other presidents have issued fishy pardons or gotten lucrative make-work jobs for their family and supporters. None have done it on this scale or so shamelessly.
The Perils of Personalism
Harvard scholar Matthew Stephenson has pointed out that the U.S. government used to be much more flagrantly corrupt in the 19th century—but it was also much, much smaller and had only a tiny effect on the economy. We are now moving toward the worst system: Big Government with its tentacles everywhere, but run on the personal whims of the president or anyone who can influence him. And it’s easier than ever to find quasi-legal ways to shunt money to him.
Yet the dynamism of the American economy is made possible by the fact that anyone with a good idea can start a business and succeed, and it doesn’t matter who you know or how much money or status you start with. Highly corrupt economies, by contrast, tend to be stagnant and sclerotic, because no one can do anything unless they first pay rent to a political sponsor.
We are going backward, creating a system of personalism that pervades our society and makes the economy run on the president’s will, not the rule of law. It’s an orgy of corruption in which innovation and initiative will be sacrificed to fill the pockets of political parasites.
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