OPINION:
The Trump administration announced a somewhat unusual deal in which it seems as if cash derived from Venezuelan oil fields would flow to oil companies and the United States before it would flow to the Venezuelans themselves.
If that order of operations is an accurate reflection of reality, it seems likely that the Venezuelans might object.
Beyond that, the deal with Venezuela may have to survive a Democratic administration, one that would almost certainly have some well-developed ideas about what kinds of policies and giveaways Venezuelan crude oil might pay for.
You see, the left has been diligently learning from Team Trump’s efforts to own chunks of companies, especially those in key sectors of the economy.
Although President Trump might have sought those stakes as a matter of national security, economic supremacy or simply personal aggrandizement, the left is clearly thinking about them as a pathway to drive its agenda, irrespective of what the companies in question might have in mind.
The Biden refugees at the Roosevelt Institute were kind enough to put it all in a report issued in July. The report focused mostly on what sorts of progress could be made on climate change in the event of a Democratic administration (net zero for everyone!), but it is easy to imagine that ownership of companies, especially in key economic sectors and especially in key economic sectors and especially with political hacks occupying board seats with voting rights, could be conducive to realizing all sorts of collectivist agenda items.
Diversity, equity and inclusion? Absolutely. Getting rid of personal automobiles? Yep. Increased government spending for its allies on the left? You betcha.
Don’t take my word for it; read the report: “While the Trump administration did not use climate rationale to justify these interventions, they represent important precedents for clean energy policymaking. Many of the companies produce minerals and goods that can help decarbonization. Moreover, some of the deals involve board seats that give the government eyes, ears and voice on setting corporate priorities. … While this power can be bad in the wrong hands, it can be useful in the right ones … to mandate faster decarbonization, recognizing labor unions, ‘buying American,’ or banning stock buybacks. The companies themselves recognize this in their securities filings, noting that government equity stakes create the potential that future governments will look to change deal terms or project priorities.”
Yes, companies in bed with the federal government certainly recognize that a new administration will mean new masters.
Such government ownership bypasses all the processes and difficulties associated with tax policy or federal loans and grants. That does not count the liberal use of the Defense Production Act and other statutes to extend favorable treatment to favored companies (think Sable Oil in California). Keep in mind that Sen. Bernard Sanders, Vermont independent, has already called for 50% government ownership of artificial intelligence companies.
Since the start of its second term, the Trump administration has announced nearly 40 arrangements with corporations in which the government has received or will receive an equity stake in the enterprise. Those include companies that touch steel and quantum computing.
This sort of thing has happened before. President George W. Bush and President Obama handed out a bunch of cash to their cronies through the Troubled Asset Relief Program, but that cash was designed to get the companies through the 2007-2008 financial meltdown.
As bad as that program was — and it was an inexcusable example of government caring much more about its wealthy constituents than about the rest of us — it was understood to be temporary.
One of the most difficult lessons to learn while working in and around the federal government is that precedents, no matter how well-intentioned, will always be used against you.
Team Trump’s enthusiasm for owning parts of companies, while understandable, has led us down a bad path. You can bet all your cash that the next president — whoever he or she is and whichever party he or she represents — will expand the precedent and creep us all closer to becoming socialists.
• Michael McKenna is a contributing editor at The Washington Times.
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