Hedge Fund Titan & US Treasury Secretary Embraces Socialism Through Government "Investing."

Conservative anti-reality machine strikes again!

Hey Scott, investing borrowed money isn’t “sovereign” wealth.

Conservatives backpedalling on "free market" religion?

Here at LiteralMayhem we’re fascinated by storytelling because, as our tagline says, “Spin has consequences.”

Yesterday we got a bit gust of hot air in the face as Donald Trump and his Treasury Secretary, Scott Bessent, championed the idea of a “sovereign wealth fund” for America. (Reuters) With the money, Trump floated the idea of buying TikTok.

Hard to say whether it’s another “flood the zone with shit” moment to distract from Elon Musk’s techno-coup in process, but it’s interesting nonetheless for what it shows about the lackeys now surrounding the president.

It’s actually a funny idea because as Reuters reports, sovereign wealth funds, of which there are many, typically “rely on a country’s budget surplus to make investments, but the U.S. operates at a deficit.”

That means America’s “sovereign” wealth fund would be created by borrowing money from China, the Saudis, or whoever else is buying U.S. Treasury Bonds. (By contrast, Norway’s fund, which is the largest in the world, invests money from the country’s oil and gas revenues.)

Any money going into a U.S. “sovereign” wealth fund wouldn’t be “sovereign” money. It would be borrowed money, from a lot of the countries Trump hates.

Backpedalling on “Free Market” Religion

But the most amusing part of the announcement was Bessent’s roaring endorsement of the idea. Lest we not forget, Republicans absolutely hate anything they see as government intrusion into “free markets.”

But Bessent, a hedge fund guy worth half a billion (who, incidentally, used to be a partner in the fund management firm of Trump’s nemesis George Soros), wasted no breath chiding Trump for an injudicious application of public monies to co-opt private sector assets.

No, Bessent was all in…

“We're going to monetize the asset side of the U.S. balance sheet for the American people. There’ll be a combination of liquid assets, assets that we have in this country as we work to bring them out for the American people.” (Reuters)

“The extraordinary size and scale of the U.S. government and the business it does with companies ... should create value for American citizens… If we are going to buy 2 billion Covid vaccines, maybe we should have some warrants and some equity in these companies and have that grow for the help of the American people.” (NBC)

Pause here for a quick second and let’s jump into the Way Back; it was only back in 2008 in the full grip of the Great Financial Crisis that conservatives were raging against the government’s auto bailout as interfering with free market discipline. The Cato Institute went so far as to label GM as “Government Motors” and eviscerate the whole bailout project. A project that, by the way, ended profitably for “American citizens,” per the lefty NY Times.

“Free market” business religion is part of the whole conservative sales pitch, and has been for 100 years. Lefty intellectuals Naomi Oreskes and Erik M. Conway penned a super-excellent piece of narrative history on conservative’s love of business fundamentalism for the Washington Post back in 2023. The GOP has used that line of attack against the Affordable Care Act, and emissions standards for cars, and subsidies for green electricity (but subsidies for nuclear are A-ok), and a bunch of other stuff.

So, why is Bessent so Elon-nerd-jumpingly keen on using an enormous government slush fund to grab ownership of private enterprises?

Taking Rather Than “Investing”

The bit about demanding equity in U.S. companies because the government bought a bunch of COVID vaccines is particularly confusing. For example, the GOP resisted giving Medicare drug-price negotiating power for decades (back to 2007). That was too much of a strong-arm tactic for free market loving conservatives.

But now Bessent seems to love the idea that any company making money selling things to the government should be forced to give the Feds “a taste,” as they say in crime circles. The idea is as ridiculous as it is frightening. When you go to CVS to buy shampoo and razor blades, you don’t get to demand that CVS hand over stock in the company along with your six-foot-long receipt.

In the auto bailout example, government funding was structured as a loan: the government got nothing except a promise of paying back the principal plus interest, just like any other LENDER. By contrast, insisting that as a PURCHASER you have the right to demand part ownership of the company… why the very idea of consumers asserting a privilege of common ownership is downright Marxist.

A true conservative would understand that you got your product, the company got its money: that’s how capitalism works.

And yet, here we are firmly caught in the grip of the conservative anti-reality machine. It’s hard to know whether Bessent is dumb enough to believe this BS, or whether he’s just riffing to stay onboard the Leader’s hot air balloon ride, hoping he doesn’t get shoved overboard in an act of Scaramucci-ing.

After all Bessent is the guy who said about inflation…

“Tariffs can’t be inflationary because if the price of one thing goes up, unless you give people more money, then they have less money to spend on the other thing, so there is no inflation.”

Oh… man oh man. Dude, if someone used to be able to afford two things, but now can only afford one thing because prices on everything are higher, that’s the very definition of “inflation.” I can’t even believe that it’s necessary to fact check the word “inflation,” but here we are: “a general increase in prices and fall in the purchasing value of money.” (Google/Oxford: search it)

This is where we are: inflation is not “inflation,” and borrowed money is “sovereign” wealth, and “investing” is now a demand for equity in private businesses in exchange for the privilege of selling to the government.

In the CNN piece covering Bessent’s nomination, he was called “reasonable and pragmatic” by Jeffrey Sonnenfeld, founder and president of the Yale Chief Executive Institute. At this point, it’s anyone’s guess what those words mean.

But this spin is not consequence free. This idea of an American “sovereign wealth fund,” as rhetorically dumb as it is, could very well manifest into a trillion-dollar personal piggy bank for Trump and his cronies. History shows that when Trump decides he wants something bad enough, and spins a yard about it publicly, there’s no limit to the number of lackeys who will weave his manifestly insane stories into personal gold.