Former Labor Secretary Robert Reich, who served in the Clinton administration, warned that President Trump’s personal involvement in the U.S. economy will be his “downfall” and will lead the country toward stagflation.
In a Substack post Tuesday, Reich recalled a time when the parties were divided by disagreements over the size of government and support for social safety net programs.
“It’s hard to find Right or Left these days,” Reich wrote. “Instead we have something no one has ever seen in America — a personal takeover of nearly all the institutions of government and, increasingly, the private sector, by a would-be dictator.”
Reich listed several examples of Trump “taking personal control of the U.S. economy,” including Trump’s efforts to influence the Federal Reserve board; the government’s 10 percent stake in Intel; and the deals with Nvidia and Advanced Micro Devices to give the companies export licenses to sell AI chips to China in exchange for 15 percent of that revenue going to the government.
The White House did not respond to an immediate request for comment.
Reich also pointed to recent reporting indicating Trump’s White House scores American companies and trade associations on how hard they work to support Trump’s comprehensive policy legislation, potentially rewarding groups with higher ratings.
“An increasing part of our economy is no longer being determined by supply and demand but by the deals Trump is striking,” Reich wrote.
As opposed to Chinese President Xi Jinping’s approach in his country, Reich wrote, “The new order being imposed on American industry doesn’t come from a vast authoritarian bureaucracy. It’s personal and arbitrary. A single so-called ‘strongman’ is seeking to control everything.”
“I don’t know the proper term for this. State capitalism? Fascist capitalism?” he continued. “Whatever we call it, it will be Trump’s downfall because his arbitrary and mercurial decisions are making the private sector nervous about investing in the U.S. economy, causing global lenders to demand a higher risk premium for lending to the U.S., and pushing the economy toward both inflation and recession — so-called ‘stagflation.’”
“If nothing else brings him down, his authoritarian control over the economy surely will,” Reich added.
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