https://www.washingtonpost.com/opinions/2025/04/11/trump-crony-capitalism-graft/
gift link https://wapo.st/4ja0PCR



It was the flip-flop hailed around the world. After insisting that he would not budge on his tariffs and branding anyone who urged him to do so as a “PANICAN (A new party based on Weak and Stupid people!),” President Donald Trump reversed course and paused his massive reciprocal tariffs for 90 days (except on China) while he negotiates deals with other countries.

But sighs of relief might be premature. For one, America’s tariffs are still at a 100-plus year high by one measure, according to the Yale Budget Lab, which will cost Americans dearly. Even more important, these tariff negotiations will inevitably result in a cascade of corruption. The American economy is being transformed from the leading free market in the world to the leading example of crony capitalism.

A market economy functions best when there are limited constraints placed on it, but especially when those constraints are clear, fair and applicable to all. The more complicated the taxes, rules and regulations, the greater the inefficiency — as studies show in country after country, from India to Nigeria to Morocco. But more significant, the greater the complexity, the greater the corruption. With tariffs come tariff waivers, often granted by the hundreds to specific industries, companies, even products. In 2018 and 2019, the Trump administration announced an assortment of tariffs, including 25 percent on steel, and also a program of waivers; they got around 500,000 applications. This week, when asked how he would determine these exemptions, Trump replied, “instinctively.” Studies show that politicians’ instincts usually favor their contributors, which then encourages pervasive corruption. It was true with tariffs for much of American history until President Franklin D. Roosevelt changed the system, and over time — in Paul Krugman’s words — “tariff policy went from being famously dirty to remarkably clean.”

It’s getting dirtier fast. A detailed academic study of the tariffs in Trump’s first term found that “companies that made substantial investments in political connections to Republicans prior to and during the beginning of the Trump administration were more likely to secure exemptions for products otherwise subject to tariffs. Conversely, companies that made contributions to Democratic politicians had decreased odds of tariff exemption approval.” That study looked at more than 7,000 applications for exemptions from tariffs on China in the first term and found that just a $4,000 donation to Democratic candidates reduced the companies’ chances of being granted an exemption to less than 1 in 10. As Timothy Carney from the conservative think tank AEI notes, “Trump’s first election created a trade lobbying boom” — from 921 lobbying clients with lobbyists working on trade to an apex of 1,419 by 2019.