What A Day Three Signs Of The Trumpification Of The Economy
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Aug 27, 2025 Scott Lincicome, Vice President of General Economics at the Cato Institute, dives into the intriguing intersection of government intervention and capitalism. He discusses the implications of the U.S. taking a stake in Intel and how this reflects a trend towards state-sponsored capitalism. The conversation explores 'Trumpification' in economic policies, highlighting risks of populism and reckless monetary actions. Lincicome also critiques the Federal Reserve's independence and the government's growing role in corporate America, raising concerns about market efficiency.
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Government Taking Stakes In Private Firms
- The federal government has recently intervened directly in private firms, taking equity or golden shares in companies like Intel and U.S. Steel.
- Scott Lincicome warns this politicizes markets and replaces market decisions with political calculations that harm growth.
Politics Drives Bad Corporate Decisions
- Politicians making corporate decisions choose for electoral reasons rather than long-term company health.
- Lincicome says this leads to less innovation, slower growth, and poor economic outcomes.
Tariffs Will Leak Into Prices Later
- Tariffs' full impact often shows up later as consumer prices and business strain.
- Lincicome notes firms have been absorbing costs so far, but economists expect consumer-price effects this fall and winter.
