Trump's Plan to Control Businesses and Ditch the Dollar
More publications are chiming in about Trump's rapacious reach for ownership of major US corporations, and we get a glimpse of his plans to kill the dollar by seizing control of the Fed.
I’m going to keep it short today because all-day training at work prevented any of the usual time my position has built in for writing. So, I’ll just point out four stories that back what I wrote about Trump changing the way the US does business and the way the US functions in the world.
Buying up businesses left and right, US becomes the stockholder of first resort
In the first article on the subject (in boldface in the headlines below), Trump advisor Kevin Hassett call’s Trump’s deal to take partial ownership of companies the “downpayment on a sovereign wealth fund,” revealing just how serious they are about building the American Treasury up with ownership in corporations (and crypto-currencies).
With its brazen new move into fascist economics—the bastard son of socialism and capitalism—the Trump administration apparently plans to acquire ownership in a lot more US corporations—ownership funded by taxpayers and the national debt that taxpayers are on the hook for, but mostly ownership that gives Trump a lot more control over businesses.
The federal government has taken ownership stakes in private companies before, but only under extraordinary circumstances, such as during the global financial crisis of 2008….
“I’m sure that at some point there’ll be more transactions, if not in this industry, in other industries…." [Hassett said]
He has also said, "We're absolutely not in the business of picking winners and losers." However, the United States is now Intel's largest single shareholder. The administration has also taken a "golden share" in U.S. Steel as part of approving its merger with Japan's Nippon Steel. Trump also said he negotiated with Nvidia CEO Jensen Huang to take a 15% cut of the chipmaker's revenue from some chips sold in China. He also has a similar deal with rival chipmaker AMD.
On and on the new policy, which is the kind of direct government involvement in businesses that conservatives once loathed as utterly repugnant socialism, will assume more control in more companies by making the US the “largest shareholder.” Hassett’s claim that the government is not picking winners and losers is a case of “me thinks he doth protest to much.” He’s saying it because he knows that is how this works, and he knows it is the first thing on many conservative minds. You’re not going to buy 10% of a major corporation and not seek to make it the big winner.
It is impossible to believe the government will acquire largest-shareholder status in numerous companies, and Trump won’t use it to exercise control, given how many times he has already tried to control the action of corporations through threats of direct sanctions on their businesses (as opposed to tariffs on nations) and loss of licenses and just bludgeoning their reputations from the bully pulpit. Plus we all know Trump hates losers, so he certainly won’t be picking losers because he only picks winners. With the US Treasury and increasing control over the Fed to back him, he can now throw massive amounts of money into taking control of winners as he sees fit.
Revealing his lust for more of these kinds of great New Deals, Trump said on Monday, “I hope I'm going to have many more cases like" the Intel stake.
Of course he does, because he always seeks more presidential power.
Conservatives are dead
The next article lays out the points I made in my last:
Protectionism, industrial policy and government ownership — all once conservative boogeymen — have become official doctrine.
The foxes have seized control of the hen house. All of these things were the antithesis of conservative beliefs about healthy economics back in my more youthful days and of their views about big, intrusive government. It’s different if they, rather than Democrats, gain power by making government bigger.
Conservative orthodoxy once held that the free market was the key to America’s economic success. In this view, Milton Friedman was a laissez-faire prophet. The Soviet Union was the sclerotic alternative. Ronald Reagan captured Republican sentiment when he said, “The nine most terrifying words in the English language are: I’m from the government, and I’m here to help.”
That’s not how President Trump — or his party — feels. The president wields tariffs to boost American companies. Populist Republicans in Congress back government subsidies to juice manufacturing. The United States is taking a 10 percent stake in Intel and a 15 percent cut of sales by Nvidia, both chipmakers. And Trump wants to replace the people who run the independent Federal Reserve with more compliant appointees. Protectionism, industrial policy and government ownership — all once conservative boogeymen — are now official doctrine.
There are several helpful paragraphs of commentary about Trump’s pole-shift in government-business relations in the article.
The dollar gets Trumped
American conservatives used to believe in the power of a strong dollar. The other two articles lay open the ways in which Trump wants to rewrite American policy by taking over the Fed to use it to help the government afford its bloated debt so the government can keep up its profligate spending and take down the dollar in the process—not as a side effect but as a goal, especially when you own the latest new crypto that you envision as possibly replacing the dollar and have the power to seize control of the Federal Reserve.
As I’ve noted before, while I was never concerned about the BRICS nations taking down the dollar, it can certainly be taken down quickly by an inside monetary coup that seizes control of the central bank, which creates and manages the national currency.
Trump has already done an astounding job of dropping the dollar’s international value by a little over 10%, just since the start of the year. That can be attributed to tariffs, which I predicted would rapidly erode the dollar’s value as the global trade currency. Get enough control over the Fed, and you also control the levers that can crash the dollar directly via intentional gross mismanagement.
One of Trump’s key economic advisors, who may be nominated to replace the current Fed chair, already wrote out a plan to diminish the dollar as a national currency, known as the Mar-a-Lago Accord. Since the dollar is purchased by buying US Treasuries, you can’t diminish demand for the dollar without blowing up the national debt with enormous interest increases as you kill global demand for the dollar as purchased via Treasuries—that is, UNLESS you control the Fed enough to get it to just monetize the debt by plunging interest permanently back to the floor, which really means buying up all the government’s bonds with the intention of permanently keeping them out of the market.
That’s all for today. Hope to be back on a more regular work schedule tomorrow.