Yves here. A terse but cogent description of how executive grifting has moved on to the deeper pockets of government.<\/p>\n
By Lynn Parramore, Senior Research Analyst at the Institute for New Economic Thinking. Originally published at Institute for New Economic Thinking website<\/a><\/strong><\/em><\/p>\n There\u2019s a familiar myth in American politics: that of the no-nonsense business leader who cuts through red tape and gets results. It fuels the belief that running a country is just like running a company \u2014 and that executives, with their boardroom instincts and bottom-line mindset, are exactly what government needs.<\/p>\n But that myth collapses under the weight of what corporate leadership has actually become \u2014 and what happens when it migrates into public office.<\/p>\n Economist William Lazonick has spent decades analyzing that transformation. He argues that corporate America has abandoned its commitment to innovation and productive investment, replacing it with a laser focus on cost-cutting, price gouging, and tax dodging to boost profits so they can do more stock buybacks\u2014all in the name of maximizing shareholder value<\/a>. Most executives are no longer rewarded for building durable businesses or contributing to the real economy\u2014they\u2019re rewarded for how efficiently they extract value from the companies that they control.<\/p>\n Lazonick calls this model a \u201cscourge,\u201d blaming it for weakening U.S. technological leadership, driving massive inequality, and destabilizing the broader economy. Now, he warns, this same extractive logic is infiltrating the federal government.<\/p>\n The ongoing 2025 budget debates are a case in point. Under the guise of \u201cefficiency\u201d and \u201cfiscal responsibility,\u201d the Trump administration has proposed slashing $163 billion from federal spending \u2014 cuts that would gut education, housing, and medical research\u2014all of which are essential for value creation. The language mirrors what executives have long used to justify layoffs, offshoring, and disinvestment. But in this case, it\u2019s not a corporation being hollowed out. It\u2019s the state itself.<\/p>\n Lazonick argues that this shouldn\u2019t surprise anyone. \u201cBecause these people have gotten away with looting corporations, they\u2019ve come to believe it\u2019s their right to loot the state,\u201d he says. Even among tech figures who\u2019ve built or have led the building of real products\u2014like Elon Musk, Jeff Bezos, and Mark Zuckerberg\u2014Lazonick notes a mindset of entitlement: \u201cThey treat the resulting wealth as entirely their own, as if they alone earned it.\u201d That thinking now shapes public policy, where deregulation and budget cuts benefit the wealthy while dismantling protections for workers and consumers.<\/p>\n Take Musk, for example. As head of the Department of Government Efficiency (DOGE), he\u2019s worked to weaken regulatory agencies like the Consumer Financial Protection Bureau and the National Labor Relations Board\u2014both of which would typically oversee parts of his business empire. At the same time, his companies continue securing massive federal contracts, including a potential $2 billion FAA deal, raising serious concerns about conflicts of interest. As Lazonick and colleague Matt Hopkins argue in a recent piece for the Institute for New Economic Thinking<\/a>, Musk has advanced through a \u201cperilous system of corporate governance\u201d driven by shareholder primacy\u2014fueling inequality and eroding America\u2019s technological leadership. His tenure at DOGE is simply more of the same: dismantling oversight, channeling public resources into private ventures, and treating government as just another asset to extract.<\/p>\n Musk\u2019s corporate empire\u2014Tesla, SpaceX, and Neuralink\u2014owes much of its success to taxpayer-funded research and government support. Tesla was launched with the help of federal loans and electric vehicle subsidies. SpaceX builds on decades of NASA-funded R&D and now depends on billion-dollar public contracts. Even Neuralink draws heavily on publicly funded neuroscience work. Despite the mythology of private-sector genius, these companies are deeply rooted in public investment. Yet the public sees little return.<\/p>\n And the mindset isn\u2019t limited to Musk. President Trump and his family are taking the corporate model Lazonick describes to new heights, using government as a platform for private enrichment. Eric Trump recently promoted the family\u2019s latest crypto venture, making the president a major crypto player while shaping federal policy toward that very industry. The Trump family\u2019s 60% stake in World Liberty Financial, now attracting major investment, has intensified concerns over conflicts of interest. Meanwhile, under Eric\u2019s leadership, the Trump Organization has struck a controversial $5.5 billion deal with a Qatari state firm to build a luxury golf resort\u2014despite Trump\u2019s previous pledge to avoid foreign deals while in office.<\/p>\n Trump has also issued executive orders to \u201cstreamline\u201d federal procurement and contract reviews. While marketed as anti-waste measures, critics see them as a backdoor for directing government business to favored contractors, including those with family ties. The line between public service and private gain has rarely been thinner.<\/p>\n Lazonick warns that the stakes are high. When corporations prioritize shareholder payouts over real investment, society loses\u2014but when governments adopt the same model, the consequences are compounded. We\u2019re not just talking about fragile companies. We\u2019re talking about the erosion of public institutions, rising inequality, and a democracy that serves fewer and fewer people.<\/p>\n To reverse course, Lazonick argues we need deep structural reform in how corporations\u2014and by extension, governments\u2014operate. That means banning stock buybacks, reining in executive compensation tied to manipulated stock performance, and reinvesting profits in innovation, workers, and communities. It means embracing a stakeholder model of governance that sees corporations not just as wealth machines, but as stewards of social value.<\/p>\n Because if we don\u2019t fix these systemic flaws, the looting won\u2019t stop. It\u2019ll only deepen\u2014and spread.<\/p>\n
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