TikTok, Trump and What Crony Capitalism Does to Our Economy

New York Times. Jan 21, 2025.

Donald Trump has rarely shrunk from promoting those he favors and denigrating those he doesn’t. Business leaders have certainly gotten the memo: Barely a day goes by before another corporate chieftain is cozying up to our new president.

An early payoff has already been scored by TikTok, the video-sharing app that spent months currying favor with the then-candidate Trump in hopes that if he won the election, he would help it survive a threatened shutdown. Months after Congress passed a law effectively banning TikTok on fears its China ties pose a national security risk and days after the Supreme Court upheld the law, TikTok and Mr. Trump seemingly engaged in a pas de deux that positioned him as the app’s savior, with the company posting obsequious gratitude to its approximately 170 million followers. [In this context, it suggests that TikTok and Mr. Trump were involved in a coordinated interaction, with each party's actions complementing the other's, similar to partners in a dance.]

So it shouldn’t come as a surprise that the tech Goliaths showed up in force at Mr. Trump’s swearing-in, with the Tesla billionaire Elon Musk; Google’s chief executive, Sundar Pichai; Meta’s chief, Mark Zuckerberg; and Amazon’s founder, Jeff Bezos, a former Trump critic, securing better seats than several of the president’s cabinet picks. Mr. Zuckerberg recently installed one of Mr. Trump’s close associates on his company’s board and announced he would be dialing back Meta’s efforts to fight misinformation in its social media platforms — as long called for by Mr. Trump and his supporters.

These aren’t just worrying signs for our politics. They are also troubling signals of how swiftly Mr. Trump could damage our economy, long the envy of the rest of the world.

To understand what might go wrong, let’s turn to the stock of the electric vehicle maker Tesla. It was one of the market’s strongest performers the week of the presidential election, soaring in value by about 30 percent. While some gains that week could be explained by expectations of future policy directions — shares of for-profit prisons rose in anticipation of the possibility of mass deportations, for example — Tesla’s rise was more curious. Other automakers that week experienced much more modest or even negative returns.

What sets Tesla apart from its peers: Investors are betting that Mr. Musk, its largest shareholder, can convert his connection to Mr. Trump into greater profits. When you compare how much Tesla’s shares rose after the election to similar situations in other countries, the comparison is not flattering.

In July 1996, the Indonesian dictator Suharto, who by then had ruled his country with an iron fist for several decades, was flown to Germany for medical tests. Shares in Bimantara Citra, a company run by one of his sons, fell by about 10 percent relative to the market, as investors recognized that the company would be worth a lot less if Suharto was no longer in power. The regime finally collapsed in 1998 amid widespread rioting and an economic implosion that cut nearly 15 percent off Indonesia’s G.D.P. in a single year.

Of course, there is a long way to go before we start to look like Suharto’s Indonesia. Tesla shares are an unusual case in which extreme fealty to a future leader appears to have led to extreme anticipated benefits (and possibly an idiosyncratic example — the company’s market value has been prone to ups and downs seemingly prompted by as little as a random tweet from Mr. Musk). And while there has always been a cozy relationship between business and government in America, our economy has nonetheless maintained its strength, including through Mr. Trump’s last presidency.

But stumbling down the path to this kind of personalistic economic policymaking is much more possible than many Americans, accustomed to the usual ebb and flow of our politics, seem prepared to recognize.

Episode 3886 - Jan 22 - Tiếng Anh - TikTok, Trump và chủ nghĩa tư bản thân hữu - Vina Technology at AI time

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Episode 3886 - Jan 22 - Tiếng Anh - TikTok, Trump và chủ nghĩa tư bản thân hữu - Vina Technology at AI time