Trump has America embracing a dangerous future

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In George Orwell’s Animal Farm, the animals initially embrace the slogan “four legs good, two legs bad.” But, when the pigs take over and re-establish relations with humans, they modify the slogan to “four legs good, two legs better.”

Something similar is happening in the US. A decade ago, conservatives bleated in unison “markets good, state bad.” Now they bleat “markets good, the state better.” Under President Donald Trump, America is embracing a new form of state capitalism, with huge consequences not just for the economy but the health of the republic.

The Trump administration has acquired equity stakes or a “golden share” in companies ranging from Intel Corporation and US Steel to Westinghouse nuclear reactors and Lithium Americas. In a direct echo of China’s civil-military fusion, the US Department of Defence is set to invest $US1 billion ($1.45 billion) in L3Harris Technologies. While the collective value of these equity stakes is now in the low tens of billions, Bloomberg Intelligence expects that the administration will continue to tap into the hundreds of billions in federal funding meant for loans and grants to instead secure equity in public and private companies.

The administration has also wielded its grip over the state’s regulatory apparatus to shape the economy in remarkable ways: For example, it predicated Nvidia’s sales to China of its H200 advanced chip on a payment of a 25 per cent export fee to the US government and forced Apple and Taiwan Semiconductor Manufacturing to pledge more investment in the US if they wanted to continue doing business with China.

Donald Trump has also taken to bossing companies around with the relish of a Soviet central planner — telling pharmaceutical and credit card companies to lower their prices and instructing defence companies to halt dividends and share........

© The Sydney Morning Herald