For years, we have been regaled with stories from the conservative movement about the dangers of Socialism (and its authoritarian cousin, Communism). And they are correct – government ownership and management of the means of capital is a mess. But saying Socialism is wrong and following through on that ideal is another matter. We have a Republican (supposedly conservative) Congress and a Republican (supposedly conservative) President – so why is the US government buying private companies? Aren’t conservatives supposed to be for free markets and ensuring that the government doesn’t play favorites between American companies (we do play favorites when it comes to American companies vs foreign companies – just ask Boeing)?

In less that 18 months of Republican Party majorities in government we have witnessed the quite visible hand of the government sticking it’s finger into private enterprise. The US government started by taking a ‘golden share’ in US Steel as a precondition to approve its sale to Nippon Steel – the US has a board member and can veto economic decisions of the company (ie production levels, plant relocations/closures). Congress said nothing regarding this supposedly ‘national security’ action. Having had a taste of the Chinese version of capitalism, the Trump administration then converted the appropriated investments in the CHIPS Act into an equity position in Intel (nearly 10%). While a great investment, this infusion of capital into a US chip maker was not offered to every other chip maker in the US. In fact, Nvidia was restricted from making sales to China of some of its chips unless they paid the government 15% of the sales revenue (so clearly this wasn’t about national security – just a government shakedown). Once again, Congress did nothing.

This week, the Trump Administration is back at it. Spirit Airlines, the no-frills airline that has filed for bankruptcy twice in the past two years, is seeking a bailout from the government to the tune of $500M (that’s less than 10 months of cash flow for them). Ironically, one of the current reasons for their rapid financial demise is the high cost of jet fuel that comes from the Iran war. So the Trump solution is to have the government finance this failing airline through the end of their bankruptcy and for the US to own 90% of the airline when (or if) they emerge from bankruptcy (assuming they survive at all, or survive after this bankruptcy). Mind you, they were failing before the Iran war and jet fuel prices will not be coming down any time soon.

Congresspeople are speaking out. Ted Cruz calls it “a terrible idea”. Josh Hawley calls it “not the best use of taxpayer dollars” (really a use of taxpayer debt, since each dollar of additional spend simply bloats the deficit more). Even Trump’s Transportation secretary doesn’t think its a good idea. And really, what does the US government know about successfully operating an airline? Amtrak operates at a loss. The US Postal Service operates at a loss. The Trumps can’t even keep their own businesses afloat (with Trump Media failing, and its World Liberty Financial being sued for extortion).

But speaking is not the same as legislating. If Congress doesn’t like the President using the US piggy bank to speculate in the private equity market, then they simply need to pass a law that says the President may not use US Treasury assets to lend funds in excess of some amount (that exceeds what we typically give as small business loans) to US or foreign businesses, and may not enter into agreements that result in the United States owning equity positions in US companies. If they want to be more flexible, they could say that these actions are prohibited without specific approval from Congress. Anything short of this is simply posturing.

In the meantime, the President continues to use the US Treasury to manipulate the stock market and favor some businesses over others. President Trump may not have liked Nicolas Maduro in Venezuela, but he sure does appear to like emulating their socialist ways.

And the national disgrace continues…