This framing conveniently ignores the question of whether the president should have the authority to single-handedly withhold funding for universities, broadly considered to be one of the foundational pillars of America's strength in the 20th century. While I think it's interesting and answers the specific question it raises, it's wild that the economist has just accepted that the president has dictatorial powers.
This is a fair question, but it's being asked a lot already. Let's imagine that completely legitimate circumstances lead to the US Government stopping the stream of grants to the Ivy League universities. How would they cope, given their enormous endowments that generate significant interest? This question is asked much less, and the answer is much less obvious. Hence the value of TFA.
Additionally, the follow-on questions are irrelevant. There are a million better questions to ask on the other side of this as well, before we ask why someone can't live without the money that they've been acquiring entirely above board and legally. "Why does the gov't think it has the authority to do this?"
Why do we need to have theoretical debates about legitimate circumstances, when there are real debates about illegitimate circumstances happening? having this irrelevant follow-on discussion is doing the gov't's work for them.
In a different setting I can see asking this question, but there is no need to ask this question while the circumstances are clearly illegitimate.