Senator Elizabeth Warren of Massachusetts has one-upped socialists Bernie Sanders and Alexandria Ocasio-Cortez: She proposes to nationalize every major business in the United States of America. If successful, it would constitute the largest seizure of private property in human history.
Warren's proposal is dishonestly called the Accountable Capitalism Act. Accountable to whom? The answer is--as always --to politicians, who desire to put the assets and productivity of private businesses under political discipline for selfish ends.
Under the proposal, no business with more than $1 billion in revenue would be permitted to legally operate without permission from the federal government. It would then dictate to these businesses the composition of their boards, the details of internal corporate governance, compensation practices, personnel policies, and much more. Their political activities
would be restricted too.
Senator Warren's proposal entails the wholesale expropriation of private enterprise in the United States, It is unconstitutional, unethical, immoral, irresponsible, and utterly bonkers.
It is also cynical. Senator Warren is a crass opportunist, intellectually bankrupt, and personally vapid. But she is not stupid. She knows that this is a go-nowhere proposition, that she will be spared by the Republican legislative majority from the ignominy that would ensue from the wholehearted pursuit of this daft program.
It is only a means of staking out for strategic reasons the most radical corner for her 2020 run at the Democratic presidential nomination. The Democratic party in 2018, like the Republican primary electorate in 2016, is out for blood and desirous of confrontation. So Senator Warren is running this red flag up the flagpole to see who salutes.
To propose such a thing for sincere reasons would be ghastly stupidity. To propose this program for narrowly self-serving political reasons is the sort of thing that would end a political career in a sane and self-respecting state, which Massachusetts plainly is not.
When the owners of Apple wish to hold on to their after-tax earnings, they are denounced as greedy. When Elizabeth Warren wants to seize those earnings for her own use, it is covetousness, which is what you get when you have greed compounded with envy.
To those on the left who think that giving the government a stronger whip hand over American businesses is just the ticket, I would like to present four questions: Who is the president? Who is the majority leader in the Senate? Who is the speaker of the House? How would you evaluate the composition of the Supreme Court, either as it stands or after President Donald Trump has the opportunity to nominate another justice or two?
The power you give the federal government will be there during Republican administrations too. Any future populist demagogue who finds his way into the White House will have access to the same power. No one should be trusted with that kind of power.
And nobody who seeks that kind of power should be trusted with any power at all.
Another thing about these kinds of proposals: They are acts of cowardice. There are politicians who wish to provide benefits to certain constituents and who would like those benefits to be paid for by other parties who are politically disfavored. There is an easy way to do that: Tax X to subsidize Y. The problem with doing that is embarrassment. Politicians such as Senator Warren lack the courage to go to the American electorate and say: "We wish to provide these benefits, and they will cost an extra $3 trillion a year, which we will pay for by doubling taxes."
Why spend the money to subsidize, say, health insurance, when you can just pass rules that make businesses do the subsidizing for you? It's a way to spend money without putting the expenditures on a budget line.
One wonders why American businesses put up with it. They do not have to.
It is easy for an established American business to move its corporate domicile to some other country, as with all those corporate inversions in the pharmaceutical industry that gave the Obama administration the willies a few years ago. It is also easy for a new business being founded by Americans to incorporate in some other country from the beginning.
Nearly half of the total sales of the S&P 500 businesses come from overseas customers. Many big U.S. manufacturers such as Caterpillar get more than half of their sales from abroad. Exxon, the target of a political jihad being conducted by Senator Warren's party, gets more than half of its revenue from overseas sales. Watching American cities scurry around to prostrate themselves before Jeff Bezos in the hopes of attracting the new Amazon campus has been amusing. Imagine Apple or Google doing that in a global search for a new home. Fanciful? Yes. Fanciful today.
Businesses historically have chosen to locate in the United States for a number of reasons: It was long the world's largest market, and businesses had faith in American law and the American dollar. It's still a big market, and the dollar is still the world's favorite currency. But if American law or American lawmakers are going to treat profit-seeking enterprises as an enemy of the people, Zurich is pretty nice. There are a lot of big American businesses with targets painted on their backs, and those that do not already have a Plan B are doing their shareholders a disservice.
Editorial on 09/02/2018