In a late-October campaign speech, Donald Trump inveighed against AT&T’s proposed takeover of Time Warner in no uncertain terms.

“As an example of the power structure I'm fighting,” Trump said, “AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration because it's too much concentration of power in the hands of too few.”

The deal itself was controversial along both regulatory and business dimensions. But one thing was very clear: It was excellent news for Time Warner shareholders who were being offered a premium price for their company’s assets. Hillary Clinton’s campaign also signaled skepticism of the deal, though in less strident and absolute terms. Either way, it added up to political trouble for the merger — especially in the event of a Trump win.

Except maybe not. After winning the election, Trump’s team swiftly dispatched a merger-friendly veteran of the Bush-era Federal Trade Commission to work on FTC issues. By November 28, industry analyses were forecasting a sharp deregulatory tilt from a Trump Federal Communications Commission. And by December 6, AT&T’s CEO was talking confidently that the merger is going to be approved despite Trump’s explicit commitment to do the opposite on the campaign trail.

Also on December 6, Time Warner’s CEO dismissed allegations that Trump poses a threat to free speech and said “the real threat to the First Amendment came from the Democrats' side more.”

A flip-flop is a flip-flop, but a turnabout this dramatic is something more than a simple changing of minds. A look at the emerging pattern suggests troubling things about what lies ahead in Trump’s approach to governance — a tendency to intermingle regulatory issues with his political interests in a way that risks building a system of entrenched corruption different from what we’re accustomed to. Businesses seeking regulatory approvals from the government need to make concessions not in the public interest but in the narrow interest of Trump.

A mysterious Trump deal sent Sprint shares soaring

Later on the same day Masayoshi Son, CEO of a Japanese company called SoftBank, paid a visit to Trump Tower. He emerged to be hailed by a couple of Trump tweets outlining a vague deal to create jobs.

Masa said he would never do this had we (Trump) not won the election! — Donald J. Trump (@realDonaldTrump) December 6, 2016

It turns out that Softbank didn’t actually agree to do anything new. They simply reframed existing investment plans as a big new win for Trump. What did Trump agree to do for them in exchange? Nobody’s sure. But SoftBank is the main owner of Sprint, and following the announcement the price of Sprint’s stock shot up about 2 percent.

It’s hard to say why that happened, exactly. But Sprint has been talking for a couple of years now about how it would like to buy T-Mobile, which the Obama administration’s FCC has been blocking on the theory that shifting from four national mobile phone carriers to three would lead to less choice and higher prices. At the exact same time Sprint shares were taking off, T-Mobile shares also soared.

Investors, in short, appear to believe that Son and Trump have reached an understanding to allow a merger to go forward next year. In exchange, Son agrees to frame some SoftBank’s investment in the United States as a result of Trump’s leadership.

The risk of systematic corruption

Donald Trump’s sprawling business empire creates an almost infinite number of opportunities for routine acts of venal corruption. He can direct government money toward enterprises he owns, use the halo of the presidency to get expedited permits for Trump-branded projects abroad, and know that foreign government and companies seeking his favor will try to patronize his hotels and other properties.

The larger threat, however, is what economist John Joseph Wallis calls “systematic corruption,” the kind of corruption 18th-century figures worried about. During the Revolutionary Era, authors and activists didn’t worry that the king was profiting personally from his rule. Instead they “worried much more that the king and his ministers were manipulating grants of economic privileges to secure political support for a corrupt and unconstitutional usurpation of government powers.”

Many American administrations have featured acts of venal corruption, and Trump’s will likely feature more than most. The larger risk, however, is that Trump’s lack of grounding in ideological principles or party networks will create a systemically corrupt government. Such governments, Wallis writes, “are rent creating, not rent seeking, governments” that operate by “limiting access to markets and resources in order to create rents that bind the interests of the ruling coalition together.”

This is how Vladimir Putin governs Russia, and how the Mubarak/Sisi regime rules Egypt. To be a successful businessman in a systemically corrupt regime and to be a close supporter of the regime are one and the same thing.

Those who support the regime will receive favorable treatment from regulators, and those who oppose it will not. Because businesses do business with each other, the network becomes self-reinforcing. Regime-friendly banks receive a light regulatory touch while their rivals are crushed. In exchange, they offer friendly lending terms to regime-friendly businesses while choking capital to rivals. Such a system, once in place, is extremely difficult to dislodge precisely because, unlike a fascist or communist regime, it is glued together by no ideology beyond basic human greed, insecurity, and love of family.

Early signs are mixed

Of course for this to happen, Trump would need to subvert the rule of law by installing cronies and personal loyalists in key regulatory positions. America’s regulatory agencies have enough independence from the White House that it would be difficult to subvert their basic purpose simply through off-hand meetings and occasional tweets.

But while Trump hasn’t appointed key regulators yet, the early signs from his administration are not encouraging.

Alabama Sen. Jeff Sessions, Trump’s designated attorney general, is best known for his history of racial controversies, but he also stands out as the only member of the Senate GOP caucus to come out as an early Trump backer. Hedge fund titan Steve Mnuchin, Trump’s designated Treasury secretary, has very little record of stated policy positions. When asked during the campaign why he was backing Trump, he said: “Nobody’s going to be like, ‘Well, why did he do this?’ if I end up in the administration.”

Now he’s in the administration. HUD Secretary Ben Carson presides over a much less significant agency, but similarly reflects a triumph of personal loyalty over conventional notions of competence or qualifications.

Of course, not every Trump Cabinet member named thus far fits that bill. Tom Price at HHS, Elaine Chao at Transportation, and Betsy Devos at Education are all well-known orthodox conservatives with reputations separate from Trump. They’re the kind of people one could imagine serving in a Ted Cruz or Jeb Bush Cabinet. If jobs at the SEC, FTC, FCC, CFTC, or Antitrust Division end up in the hands of people like Devos and Price, we should be in for an era of fairly orthodox conservative government. But if those posts are filled by Mnuchins and Carsons, swaps like regulatory favors for political support that financial markets seem to think they are seeing from SoftBank could become routine.