Trump’s “Sovereign Wealth Fund” Is a Terrible Idea

Plus, Harvard's new “no public accountability for antisemitism” policy

President Trump in New York City talking to the Economic Club, September 5, 2024

President Trump was effective in his remarks today to the Economic Club of New York. He offered a slashing defund-the-police-open-borders-ban-fracking defining attack on his opponent— “She will seek an unrealized capital gains tax…She’s a Marxist who destroyed, almost singlehandedly, San Francisco….communist price controls…wealth confiscation.” He said his own administration would eliminate ten old regulations for every one new one, and he announced that Elon Musk has agreed to head a “government efficiency task force” that Trump will create. Trump mostly stuck to his prepared remarks, and perhaps as a result he kept them reasonably brief. Even just appearing in the respectable company of Rodgin Cohen, Sander Gerber, David Malpass, Larry Kudlow, and Reshma Soujani, rather than the MAGA masses of outdoor rallies in rural Pennsylvania or Michigan, made Trump seem more conventionally plausible, less “weird.” 

The major misstep, though, came in a new policy rollout from Trump. “We’ll have a sovereign wealth fund,” he said. “We’ll have the greatest sovereign wealth fund of them all.”

That’s catnip for the crowd of New York money managers, who will be happy to be hired to earn hefty fees for managing money for the sovereign wealth fund. Maybe Trump will allocate some of the money to private equity managers who will repay him by reporting non-volatile and ever-higher valuations.

But it’s terrible policy. Trump promised to use the wealth fund for “extraordinary national development projects—everything from highways to airports.”

This a retread of a decade-old John Kerry proposal for a federal infrastructure bank. It’s an end run to permit federal spending outside of Congress’s constitutional powers to tax, borrow, and appropriate. Instead, Trump or some future president would be spending notional profits—perhaps based on inflated venture or private equity valuations—on projects that might not muster congressional support.

The last thing the American economy needs is another huge politically controlled slush fund. The Federal Reserve balance sheet and the regular federal budget are already big enough. In a Democratic administration, pressure will mount to divest the sovereign wealth fund from fossil fuel companies and military weapons manufacturers. 

Every cent in the “sovereign wealth fund” is money that could be sitting in the bank accounts or on the brokerage statements of American companies and taxpayers, who are much better investors of it and allocators of capital than the politicians would be.

America already has state pension funds launching sketchy shareholder lawsuits and putting political pressure on corporate managers to cave in to labor or other demands. A sovereign wealth fund would be that on steroids. Imagine a Biden-Harris administration, or Senator Schumer, or President Alexandia Ocasio-Cortez, controlling a sovereign wealth fund as a significant voter in proxy elections, electing corporate directors with shareholder votes. It’d be Calpers on steroids.

Trump is doing a good job denouncing Harris as a Marxist and a communist, but a proposal for a sovereign wealth fund that would dramatically increase government ownership and power over the private economy is the sort of thing that a socialist would love. It also won’t allay doubts about his supposed tendency toward authoritarianism. America’s true greatness lies not in some huge pot of money controlled by politicians in Washington, but in the decentralized wealth deployed by individual Americans.

Harvard rolls out a vague and restrictive new policy against “doxing”: Harvard today released new “Guidance on Online Harassment” that defines “doxing” as “when a community member publicly shares an individual’s personal information without their permission with the intention and effect of intense harassment.” It defines sharing as “publishing it, posting or reposting it on social media, emailing it, hyperlinking it, or making it available for download.” And it defines personal information as “a community member’s (or their immediate family member’s) personal or business address, email, cell or telephone number, class schedule, photo or video likeness, or similar information.”

So if I hyperlink to a Harvard professor or administrator’s publicly available on the internet faculty profile page that includes their business address and business email address, that counts as some of the elements of “doxing”?

The “class schedule” and “photo or video likeness” and “posting on social media” combination got an immediate test case example today from pro-Israel students at Columbia, who posted screenshots of a class schedule showing that an anti-Israel encampment leader—the one who demanded “humanitarian aid” after protesters broke into and occupied Hamilton Hall—will be teaching a section of Columbia’s core class on Western Civilization. The Harvard policy might forbid such free speech, which in my view should be protected.

The new “guidance” is signed not only by President Garber but by a politburo of 17 other Harvard administrators and is described as having been “endorsed by the Harvard Corporation.” It’s ironic, because the guidance pays lip service to “vigorous debate and dialogue” and “different backgrounds, perspectives, and lived experiences,” but there appears to be no dissent in the Harvard hierarchy from a policy that says you can be in trouble merely for linking to an already public website listing a business address and email.

These long lists of signers onto statements are not a sign of confident leadership or of a healthy consensus. It’s not the Declaration of Independence we’re talking about, it’s an acronym-laden university policy. The list of signers is a sign of insecurity, like some bully on a playground who isn’t comfortable going anywhere unless surrounded by a handful of fellow thugs. Claudine Gay’s disastrous post-October 7 “word salad” has a similar list of signers.

What’s really going on here is that the anti-Israel activists and their enablers in the Harvard administration are terrified of being held accountable for their actions by students with phones filming antisemitic violence and vandalism on the Harvard campus. Since Harvard won’t enforce its own rules or protect its Jewish students, no wonder the Jewish students and campus rabbis and parents are turning to cellphones and social media to bring transparency and accountability. The policy gives no examples. Instead of “guidance on online harassment,” it might have been labeled “no public accountability for antisemitism policy.”

Garber and the Corporation may see this as some kind of grand bargain—we’ll throw the anti-Israel faction new guidance on “doxing,”’ we’ll throw the Jews more kosher dining and no divestment from companies helping Israel in the Gaza War, and both sides will be equally happy, or unhappy. 

The guidance is bureaucratese: “School-based processes for enforcing the USRR or contact their local designated resources responsible for enforcing the NDAB in a School or administrative unit.” Do none of the 18 Harvard administrators know how to write in language that is accessible and understandable to a wide audience? Or are they just taking dictation from Harvard’s losing WilmerHale lawyers, or, worse, outside advocacy groups such as Palestine Legal?

At least there is a germ of wisdom: “we must acknowledge that policies alone cannot eliminate digital and other harassment or the harms they inflict. To be the Harvard we aspire to be, we must create an academic and work environment that cultivates not only vigorous debate and dialogue but also mutual respect.” That common sense contradicts much of the rest of the guidance. If patterns hold, Harvard students and faculty will ignore the guidance, and the administrators won’t enforce the policy.

Meanwhile, Harvard dropped below Babson, Yale, and Claremont-McKenna in the Wall Street Journal’s college rankings, and is again last on FIRE’s free speech rankings. I have concerns about the methodology of both rankings, and I have reservations about ranking colleges generally since it depends on the fit for an individual student. But directionally, it tells you the recent story of Harvard. It’s not entirely hopeless, and there are plenty of positive signs, too, about which more soon. But it’s a turnaround situation, and much of the leadership team that created the original problems remains in place.

Why Gallagher quit Congress: Rep. Mike Gallagher of Wisconsin, who had been a rising Republican star, resigned and went to work for Palantir as head of its defense business, David Ignatius reports in the Washington Post. “He sees his work at Palantir as an extension of what he was doing on Capitol Hill, working with people from different political perspectives for a strong defense.” It’s a good hire for Palantir and a loss for Congress, though Ignatius predicts Gallagher will return to politics sometime in the future.

Comment of the Day: Michael Segal (note the correct spelling, which was wrong in the newsletter yesterday) writes in response to yesterday’s item about Harvard’s chalking policy: 

On the chalking issue we should be inspired by the dictum that the best response to bad speech is more speech. We should also be inspired by the similar philosophy that led to the addition of community notes to posts on X.

Harvard’s policy should not be to ban chalking. It should be to ban anyone from preventing counter-chalking.

With the Harvard Crimson having eliminated comments on articles, chalking is the new front in campus interactions. The Harvard Crimson today has 3 different articles on its homepage with photos of chalking. One chalked message says "let gaza live", which should be expanded to "let gaza live without killing gay people".

Harvard students are likely to be excellent at clever counter-chalking. However, their efforts could benefit from suggestions from this community.

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