“He’s taking an extreme left-wing position which looks like state capitalism,” said Jeffrey Sonnenfeld, a longtime corporate governance scholar and the founding dean of Yale’s Chief Executive Leadership Institute. “It is MAGA going Maoist. So it is taking away the discretion of individual managers—the control of the ownership of the business by its stakeholders, by its owners, the decision-making. And it is disrupting the wisdom of markets.”

Sonnenfeld—who says he has known Trump for decades, longer than any current cabinet member, and is preparing to release a book examining what he calls Trump’s “ten commandments”—argued the shift has nothing to do with ideology. 

“He’s come up with something new, which is the iron fist of an autocrat,” Sonnenfeld told Fortune. “That’s something which is not seen in capitalism too often.” 

In Sonnenfeld’s telling, the president’s recent moves substitute executive discretion for market outcomes, leaving managers and shareholders operating not within a free market, but at the pleasure of the White House.

Housing

A little after noon Wednesday, Trump announced on Truth Social he was banning “large institutional investors”—which include Wall Street conglomerates like private equity firms and real estate trusts— from buying single-family homes, and called on Congress to codify the law.

“People live in homes, not corporations,” Trump wrote. 

Stocks of these institutional investors took a hit on the news. Blackstone, a notorious corporate home buyer, sank 6% Wednesday. Invitation Homes, known as the largest institutional home buyer, also dove 6%, while American Homes 4 Rent (AMH) saw trading briefly halted due to volatility after shares hit a three-year low.

Large institutional investors currently own only 2% of the housing stock, according to CNBC, but their ownership is heavily concentrated in cities in the Southeast like Atlanta and Jacksonville, Fla. 

“I think [the ban] is a very tempting narrative that people on the left and the right have gravitated towards,” Skanda Amarnath,, cofounder of macroeconomic policy group Employ America, told Fortune. “I do not think it thinks through how much institutional investors are really buying, or what the effect actually is on affordability.”

Taking on the military industrial complex

Hours after the housing announcement, Trump turned his attention to the defense sector, arguably one of the most politically protected corners of American business. 

Citing frustration with the pace of weapons production and delivery, the President said around 2 p.m. Tuesday he would move to cap executive compensation at major defense contractors at $5 million annually until production is “spot on.” For context, CEOs at companies like Lockheed Martin, Raytheon, and Northrop Grumman routinely earn between $18 million and $25 million annually. 

“Executive Pay Packages in the Defense Industry are exorbitant and unjustifiable given how slowly these Companies are delivering vital Equipment to our Military, and our Allies,” Trump wrote. “Salaries, Stock Options, and every other form of Compensation are far too high for these Executives.”

It wasn’t just Truth Social talk, either. Trump formalized the policy in a sweeping executive order signed Wednesday that sharply curtails how defense contractors can use profits and compensate executives. The order bars stock buybacks and dividends for firms deemed by the Secretary of War to be underperforming on government contracts, allows the Pentagon to cap executive base salaries during remediation periods, and directs future defense contracts to tie incentive pay to production speed and quality. Enforcement will come through tools under the Defense Production Act. 

Sonnenfeld argued this move is a direct assault on the legal foundations of American business. He specifically cites the Fifth Amendment’s “takings clause,” which prohibits the government from seizing private property for public use without just compensation.

“There is a provision in the Fifth Amendment which is about illegal confiscatory behavior,” Sonnenfeld said. “What they’re doing now by demanding these stakes… with no compensation of the shareholders to the government is completely unjustified.” In his view, the administration is effectively expropriating the decision-making power of owners and handing it to the state.

The move has sent a wave of anxiety through the “Military-Industrial Complex”—the term coined by former President Dwight Eisenhower referring to the relationship between the government and private defense contractors—that is traditionally a bedrock of GOP support. While previous administrations have flirted with pay caps—most notably former President Barack Obama’s proposal to limit contractor pay to $400,000—none have attempted to use their podium to unilaterally dictate the internal dividend and buyback policies of private companies. This use of state power has led industry insiders to question the administration’s true economic end-game. 

“I thought we grabbed Maduro to stem socialism in the Americas, not to turn D.C. into Caracas on the Potomac,” an anonymous defense industry official, referring to former Venezuelan President Nicolás Maduro, told Politico.

Venezuela 

Speaking of Maduro: Following the dramatic arrest and extradition of Venezuela’s president over the weekend, Trump announced Tuesday the U.S. would take control of roughly 50 million barrels of Venezuelan crude oil. By Wednesday, the White House revealed the deal would operate under tightly controlled terms set directly by the president.

Under the arrangement, proceeds from the oil would be placed into an account Trump said was “controlled by me,” with Venezuela required to spend the funds exclusively on American-made goods. By taking control of the 50 million barrels of crude—valued at roughly $3.5 billion—and dictating the exact flow of the resulting capital, the administration has effectively turned another nation’s energy supply into a direct stimulus for the American manufacturing industry, a “closed-loop” system. 

Instead of Venezuela choosing its partners based on price or quality, the state has created a captive customer. While this “closed-loop” arrangement mirrors the 1980s Voluntary Export Restraints (VERs) used by the Reagan administration to protect Detroit from Japanese auto imports, the new Venezuela mandate marks a far more direct evolution of “managed trade.” Reagan’s VERs were, technically, negotiated concessions intended to preserve at least the idea of a free market while yielding to domestic protectionist pressure. By contrast, Trump’s deal explicitly subordinates market demand to a state-controlled barter system. 

Instead of allowing markets to allocate capital and determine winners, the administration is increasingly dictating outcomes: who can buy homes, how executives are paid and how trade itself is conducted. The cumulative effect, Sonnenfeld argued, is not just policy volatility, but also a structural shift in how American capitalism functions, and how we subjectively experience it.

“It’s hard to keep up with the constant shiny new object or wall of sound and distracting things that President Trump does to divert attention from the last fiasco,” Sonnefeld said. “He is always creating a new one.”