Why some conservatives oppose a sovereign wealth fund
When President Trump signed an executive order on Monday calling for the creation of a U.S. sovereign wealth fund, it contradicted years of conservative thought.
The big picture: Trump wants the ability to invest public resources, using the type of fund that is more commonly deployed by countries with huge surpluses (frequently due to oil wealth) that need to be directed somewhere productive.
Conservative and libertarian thinkers have traditionally been hostile to the idea of the government taking on such a role.
What they're saying: "The potential for cronyism with a sovereign wealth fund is dizzying, and the record of current government efforts to direct investment should not give anyone confidence that it would be competently or fairly managed," wrote Dominic Pino in National Review yesterday.
"The United States has a ton of wealth," he adds. "The federal government is a poor steward of the chunk of it that it already controls. It should control less, not more."
Flashback: In 2005, the George W. Bush administration sought to add private accounts to Social Security that would allow individuals to invest their program contributions in the stock market.
But it did not propose the government simply invest some of the Social Security trust fund in stocks, reflecting concern about government meddling in the private sector.
In 2001, Federal Reserve chair Alan Greenspan endorsed tax cuts on the logic that then-forecast budget surpluses meant the United States was at risk of paying off the national debt and then investing surpluses in the private sector.
"I believe, as I have noted in the past, that the federal government should eschew private asset accumulation because it would be exceptionally difficult to insulate the government's investment decisions from political pressures," Greenspan said.
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