Trump likes the idea of the government buying stocks and corporate bonds:
“Asked if he would support the federal government moving to take an equity stake in some companies, Trump said: ‘I do. I really do.’
“Trump, speaking at a news conference at the White House, added: ‘We will be helping the airline industry. We will be helping the cruise ship industry. We probably will be helping the hotel industry.'”
Hotels? Isn’t that Trump’s line of business?
Is Trump emulating China, which has hundreds of state-owned companies?
Is Trump emulating all those many countries that own airlines, railroads and mines? Aren’t these some of the same countries he has spoken of with a derogatory epithet?
Is Trump taking a chapter out of the Sanders and Warren book?
State ownership of stock is not state capitalism. It’s not even remotely capitalism. It’s the opposite. It’s not private ownership of the property. It’s government ownership, which means “public” ownership. This means the state is financing the company. Taxpayers are supplying resources, but they have no direct control over their money’s uses. Taxpayers are definitely not shareholders and they definitely do not have shareholder rights.
State ownership of companies (their stocks and bonds) is straight-out socialism, but because the socialists are so fond of forming and naming their own sects and often denying that they are this or that kind of socialist, I’ll call it neo-socialism.
The next election provides a choice between two neo-socialists. How’s that? Forget the “neo” if you like. It doesn’t change a thing.
Trump and his coterie reveal for all the world to see their limited and flawed understanding of freedom and free markets, of property and liberty, of what makes an economy prosperous and what does not.
Where do investors fit in? Why is their influence on businesses to be shoved aside and thwarted? Why do they lose their say? Why aren’t investors allowed to gain control of beleagured companies, if they think it wise and profitable? Why aren’t overly indebted companies allowed to fail? What ever happened to the “loss” part of profit and loss? What happened to unhampered securities markets? What happened to free enterprise? Why Trump’s headlong rush to socialism or whatever appellation applies to these prodigious anti-capitalism and anti-freedom proposals?
An election nears. Trump wants to rescue his “accomplishments”. He doesn’t want to be accused of causing a 20% unemployment rate. He doesn’t want to be blamed for a severe market crash. He wants to be seen as the government helper and protector of the economy. He is making himself the CEO of the government as total insurer against all risks and all blunders. The only problem is that it’s unsound insurance with impossible loss coverage and laden with moral hazard.
In this endeavor, it does not matter if Trump is motivated by sympathy, empathy or good-heartedness to failing businesses and those who may suffer during a depression or recession. It doesn’t matter if he is acting purely with non-political motives. He’s still dumping capitalism and free markets into the ash can, and that is utterly the wrong thing to do. It’s the wrong precedent or reinforcement of earlier precedents. It’s basically a LIE, a set of policies that are supposed to rescue the free-market system, such as it is, but by means that must destroy it. The truth in this situation is that years of FED and government wrong policies have brought us to this pass. Bailouts and money-printing won’t cure our problems. They have caused worse problems. Politicians find it impossible to tell these truths because they have nothing to offer in their place. They cannot advocate going cold turkey without being widely excoriated.
The government cannot insure a whole people against every contingency. Only a people comprised of hard-working and thrifty individuals can arrange themselves by themselves so as to do their best to insure against future risks and uncertainties. The government cannot insure against their mistakes, costly as they may be, without undermining their incentives to discover better ways of doing things. The best that any government can ever do is tend to a very limited set of activities, such as justice and protection. It cannot even do these “best” and “limited” jobs, however. It can’t handle public health. That’s for certain. It can’t handle and shouldn’t handle public education. It has shown itself incapable of handling military defense, instead transforming protection against clear threats that may have visibly emerged into constant warfare based on false imaginary threats and hopes of re-making the world.
Too many Democrats are applauding Trump’s proposals, which represent capitulation to the socialist agenda. That’s why some of these Democrats are getting openly on board; and they now want to expand upon any giveaways. They want to be re-elected too. They cannot let Trump take all the credit. If Trump refuses to expand his proposals, they’ll blame him for not doing enough and allowing a recession to occur.
Everything gets twisted into knots. This kind of behavior cannot go on. The politics are so intertwined with false ideas about economics and economic history that any rational discussion is out of the question. There can be no right reason based upon false axioms and premises. The country is being led by politicians who have built upon flawed foundations for way too many years. You cannot build on lies and false ideas. The result is that the house is sinking and showing signs of collapsing.9:27 pm on March 19, 2020 Email Michael S. Rozeff