Retirements And Businesses Face Risk From Administration Actions

Forbes

6 hours ago

The topic of regulation often sits in the penumbra of companies. Many executives hate them. Some regulation is overdone. Much of it isn't, being instead expressions of restraint when corporations behave recklessly, damaging the public and the balance of the economic system. Large regulatory packages have often enabled greater trust, attention to operations, and ultimately higher profitability overall.
As often as regulation is necessary for companies, it is also required through laws and constitutional guarantees for government entities and officials who otherwise would misuse their powers over businesses and the many millions of retirement accounts that require economic success to thrive.
Tech Companies And Law Firms Under Attack
Donald Trump has established a practice of singling out both individuals and particular companies. Criticism on the part of the nation's chief executives, whether publicly or privately expressed, isn't new. They are people and will act as people do.
However, the newest expression of it is unusual. Trump reportedly demanded that U.S. chip companies, Nvidia and AMD, pay the government a percentage of their revenue from sales to China, according to the Financial Times. The two companies agreed so they could get the export licenses necessary to ship products, reportedly admitting it to the newspaper.
Also, according to the story, unnamed expert sources said that this type of arrangement was 'unprecedented.' Companies have never before paid commissions for permissions.
On August 7y, 20205, Trump called on Intel CEO Lip-Bu Tan to resign because a Republican senator was concerned about Tan's reported investments in Chinese companies, Business Insider reported. Holding shares in Chinese companies is a common part of investment portfolio diversity. Days later, Trump praised Tan's 'success' online, Business Insider separately wrote.
However, in a broader sense, this is not the first attempt by Trump at deals following economic threats. In April, Trump announced a deal with five major law firms for $600 million in free legal work, as The Hill and others reported. The payoff for the firms was that the Equal Employment Opportunity Commission would withdraw letters asking about hiring practices in an alleged attempt to target diversity, equity, and inclusion programs.
'The EEOC is prepared to root out discrimination anywhere it may rear its head, including in our nation's elite law firms,' acting EEOC Chair Andrea Lucas said in a statement, as The Hill reported in a separate article. Trump had also chosen law firms for their past clients and cases.
Banks And Pharma Join The Ranks
Trump accused banks in early August of political discrimination, wrote The Wall Street Journal. He wrote an executive order claiming that banks 'have engaged in unacceptable practices to restrict law-abiding individuals' and businesses' access to financial services on the basis of political or religious beliefs or lawful business activities.'
According to the Equal Credit Opportunity Act, there can be illegal discrimination if based on 'race, color, religion, national origin, sex or marital status, or age.' Political beliefs are not a protected category.
Last week, Trump told major pharmaceutical to lower prices or face punishment, as Agence France-Presse wrote. He wanted the companies to work with the administration to make changes within two months, including a 'most favored nation' policy that would require the companies to sell at the lowest price paid by other countries.
Foundational Problems For Commerce And Retirement
The efforts to force companies in multiple industries to act one way or another remain highly unusual and speak to the reason why such actions are considered so unusual and undesired. A president can exert enormous power from the bully pulpit alone.
Extend efforts to the powers of the state and what a president can do is terrible. It harkens back to Richard Nixon's famous enemies list and his willingness to use such agencies as the IRS and FBI to attack political adversaries.
In the present, the actions the Trump administration has taken show the reasons why such activities have been either illegal or considered unacceptable as norms. They can unbalance industries, upend commerce, and disturb complex social and financial mechanisms without consideration of the extent of damage that might happen.
All these perturbations, as tariffs on GM profits showed, can effectively become taxes on everyone's retirement funds. With a large aging segment of the population, this ultimately is not good for anyone.