Trump prides himself on being a free marketeer, but is proving to be a clumsy central planner
Rita Trichur Globe and Mail
There was once a Republican president who believed in the separation of the U.S. government and private enterprise.
Back in November of 1925, then-president Calvin Coolidge gave a speech to the Chamber of Commerce of the State of New York, in which he explained why it was desirable to maintain “the largest possible independence” between government and business.
“Each ought to be sovereign in its own sphere. When government comes unduly under the influence of business, the tendency is to develop an administration which closes the door of opportunity, becomes narrow and selfish in its outlook, and results in an oligarchy,” Coolidge said at the time.
“When government enters the field of business with its great resources, it has a tendency to extravagance and inefficiency, but, having the power to crush all competitors, likewise closes the door of opportunity and results in monopoly.”
Coolidge argued that political life and industrial life ought to flow “side by side” because joining the two would result in “enormous power, autocratic and uncontrolled.”
Almost a hundred years later, there’s another tariff-loving Republican president in power whose policies risk creating economic ruin. But unlike Coolidge, Donald Trump ([url]https://www.theglobeandmail.com/topics/donald-trump/[/url]), it seems, no longer believes in the virtues of capitalism. Nor is he attuned to the lessons of history.
Sure, Mr. Trump likes to bill himself as a free marketeer who loathes regulation. But now that his love-in with corporate America appears to be over (bye-bye, Elon!), he is increasingly flexing the long arm of the state to meddle with businesses on Wall Street and beyond.
Mr. Trump’s political interference spans everything from seeking state ownership stakes in companies to inappropriate pronouncements about corporate personnel and muscling in on commercial transactions.
On Tuesday, for instance, Commerce Secretary Howard Lutnick confirmed the U.S. government is eyeing an unspecified “non-voting” equity stake in struggling chipmaker Intel Corp. ([url]https://www.theglobeandmail.com/business/article-government-seeking-equity-stake-in-intel-us-commerce-secretary-says/)as[/url] a quid pro quo for cash grants approved before Mr. Trump’s second presidency.
“The Biden administration literally was giving Intel money for free . . . and Donald Trump turned it into saying, ’Hey, we want equity for the money. If we’re going to give you the money, we want a piece of the action for the American taxpayer,’” Mr. Lutnick was reported as telling CNBC.
Earlier this week, Bloomberg News reported the government was in negotiations to take a 10-per-cent stake in Intel.
Mr. Trump has previously called for the resignation of Intel chief executive officer ([url]https://www.theglobeandmail.com/business/article-trump-intel-ceo-lip-bu-tan-resign-china-ties/[/url]) Lip-Bu Tan, ostensibly over his previous business dealings in China’s technology sector.
An act of patriotism, to be sure.
Mr. Tan, of course, is part of a growing list of business bigwigs targeted by Mr. Trump.
The President has also made comments calling for the firing of Jan Hatzius, the long-serving chief economist of Goldman Sachs, for having the temerity to predict that U.S. tariffs would fuel inflation and frustrate economic growth.
Mr. Trump also tossed a barb at Goldman CEO David Solomon, suggesting that he should stick to his hobby of being a DJ.
Earlier this year, he publicly accused the CEOs of Bank of America and JPMorgan Chase – Brian Moynihan and Jamie Dimon, respectively – of discriminating against conservatives.
“I hope you start opening your bank to conservatives because many conservatives complain that the banks are not allowing them to do business within the bank, and that included a place called Bank of America,” Mr. Trump told the World Economic Forum.
“You and Jamie and everybody, I hope you’re going to open your banks to conservatives because what you’re doing is wrong.”
The Trump administration is also horning on business transactions.
Nvidia Corp. and Advanced Micro Devices Inc. recently agreed to give the U.S. Treasury a 15-per-cent cut of the sales of their artificial intelligence ([url]https://www.theglobeandmail.com/topics/artificial-intelligence/[/url]) chips to China in return for export licences – a cash grab that is stirring controversy.
Nippon Steel Corp.’s US$14.9-billion acquisition of U.S. Steel Corp., meanwhile, hinged on another out-there tactic justified on national-security grounds. Mr. Trump was given the power to name a corporate director, and the U.S. government was granted a “golden share” (including veto powers over key corporate decisions).
At the very least, Mr. Trump appears to be clumsily adopting the Chinese practice of guanxi, which involves using personal connections to forge business ties.
Some observers, including The Wall Street Journal’s Greg Ip, have argued that Mr. Trump is emulating the Chinese Communist Party by expanding government control over the economy, including by waging a global trade war.
Indeed, an article in Fortune asked: “Is MAGA going Marxist and Maoist?”
?
But unlike the CCP, Mr. Trump lacks discipline. As a result, he is proving to be both a lapsed capitalist and a poor central planner.
Mr. Trump and his comrades in Washington should pay particular attention to the successes and failures of Coolidge, whose policies have since been criticized for aggravating the Great Depression.
As Coolidge once said: “It is notorious that where the government is bad, business is bad.”
Ain’t that the truth.
?
[url]https://www.theglobeandmail.com/business/commentary/article-trump-free-marketeer-clumsy-central-planner/[/url]
Rita Trichur Globe and Mail
There was once a Republican president who believed in the separation of the U.S. government and private enterprise.
Back in November of 1925, then-president Calvin Coolidge gave a speech to the Chamber of Commerce of the State of New York, in which he explained why it was desirable to maintain “the largest possible independence” between government and business.
“Each ought to be sovereign in its own sphere. When government comes unduly under the influence of business, the tendency is to develop an administration which closes the door of opportunity, becomes narrow and selfish in its outlook, and results in an oligarchy,” Coolidge said at the time.
“When government enters the field of business with its great resources, it has a tendency to extravagance and inefficiency, but, having the power to crush all competitors, likewise closes the door of opportunity and results in monopoly.”
Coolidge argued that political life and industrial life ought to flow “side by side” because joining the two would result in “enormous power, autocratic and uncontrolled.”
Almost a hundred years later, there’s another tariff-loving Republican president in power whose policies risk creating economic ruin. But unlike Coolidge, Donald Trump ([url]https://www.theglobeandmail.com/topics/donald-trump/[/url]), it seems, no longer believes in the virtues of capitalism. Nor is he attuned to the lessons of history.
Sure, Mr. Trump likes to bill himself as a free marketeer who loathes regulation. But now that his love-in with corporate America appears to be over (bye-bye, Elon!), he is increasingly flexing the long arm of the state to meddle with businesses on Wall Street and beyond.
Mr. Trump’s political interference spans everything from seeking state ownership stakes in companies to inappropriate pronouncements about corporate personnel and muscling in on commercial transactions.
On Tuesday, for instance, Commerce Secretary Howard Lutnick confirmed the U.S. government is eyeing an unspecified “non-voting” equity stake in struggling chipmaker Intel Corp. ([url]https://www.theglobeandmail.com/business/article-government-seeking-equity-stake-in-intel-us-commerce-secretary-says/)as[/url] a quid pro quo for cash grants approved before Mr. Trump’s second presidency.
“The Biden administration literally was giving Intel money for free . . . and Donald Trump turned it into saying, ’Hey, we want equity for the money. If we’re going to give you the money, we want a piece of the action for the American taxpayer,’” Mr. Lutnick was reported as telling CNBC.
Earlier this week, Bloomberg News reported the government was in negotiations to take a 10-per-cent stake in Intel.
Mr. Trump has previously called for the resignation of Intel chief executive officer ([url]https://www.theglobeandmail.com/business/article-trump-intel-ceo-lip-bu-tan-resign-china-ties/[/url]) Lip-Bu Tan, ostensibly over his previous business dealings in China’s technology sector.
An act of patriotism, to be sure.
Mr. Tan, of course, is part of a growing list of business bigwigs targeted by Mr. Trump.
The President has also made comments calling for the firing of Jan Hatzius, the long-serving chief economist of Goldman Sachs, for having the temerity to predict that U.S. tariffs would fuel inflation and frustrate economic growth.
Mr. Trump also tossed a barb at Goldman CEO David Solomon, suggesting that he should stick to his hobby of being a DJ.
Earlier this year, he publicly accused the CEOs of Bank of America and JPMorgan Chase – Brian Moynihan and Jamie Dimon, respectively – of discriminating against conservatives.
“I hope you start opening your bank to conservatives because many conservatives complain that the banks are not allowing them to do business within the bank, and that included a place called Bank of America,” Mr. Trump told the World Economic Forum.
“You and Jamie and everybody, I hope you’re going to open your banks to conservatives because what you’re doing is wrong.”
The Trump administration is also horning on business transactions.
Nvidia Corp. and Advanced Micro Devices Inc. recently agreed to give the U.S. Treasury a 15-per-cent cut of the sales of their artificial intelligence ([url]https://www.theglobeandmail.com/topics/artificial-intelligence/[/url]) chips to China in return for export licences – a cash grab that is stirring controversy.
Nippon Steel Corp.’s US$14.9-billion acquisition of U.S. Steel Corp., meanwhile, hinged on another out-there tactic justified on national-security grounds. Mr. Trump was given the power to name a corporate director, and the U.S. government was granted a “golden share” (including veto powers over key corporate decisions).
At the very least, Mr. Trump appears to be clumsily adopting the Chinese practice of guanxi, which involves using personal connections to forge business ties.
Some observers, including The Wall Street Journal’s Greg Ip, have argued that Mr. Trump is emulating the Chinese Communist Party by expanding government control over the economy, including by waging a global trade war.
Indeed, an article in Fortune asked: “Is MAGA going Marxist and Maoist?”
?
But unlike the CCP, Mr. Trump lacks discipline. As a result, he is proving to be both a lapsed capitalist and a poor central planner.
Mr. Trump and his comrades in Washington should pay particular attention to the successes and failures of Coolidge, whose policies have since been criticized for aggravating the Great Depression.
As Coolidge once said: “It is notorious that where the government is bad, business is bad.”
Ain’t that the truth.
?
[url]https://www.theglobeandmail.com/business/commentary/article-trump-free-marketeer-clumsy-central-planner/[/url]
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