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Saving Capitalism. By Seizing Businesses

Senator Elizabeth Warren of Massachusetts kicked off her 2020 presidential campaign last month. While she hasn’t officially announced a presidential run, her latest proposal could have no other purpose than to solidify her socialist bona fides with the hardcore left in the Democratic Party. She calls it the Accountable Capitalism Act, which is ironic since there is nothing capitalist about her plan.

Warren is taking a page from the playbook of Hugo Chavez in Venezuela and proposing that the government seize control over every business with more than $1 billion in revenue.

The euphemistically dubbed “Accountable Capitalism Act” would place all businesses with more than $1 billion in revenue under complete and total federal control. The feds would dictate to these businesses the composition of their boards, the details of internal corporate governance, compensation practices, personnel policies, and much more. Control of these businesses would shift from those who actually built them to politicians and bureaucrats who would no doubt use them for entirely philanthropic, non-self-serving ends. This is a non-starter in a Republican-controlled Congress. It won’t even go up for a vote. But as Kevin D. Williamson notes over at the National Review, Warren is playing the long game. She’s floating this idea in preparation for her presidential run, and if she wins she’ll no doubt push policies just like this in a Congress that may or may not be under Republican control.

If government seizure of businesses sounds familiar, just think Venezuela. Under Hugo Chavez’s brand of socialism, his government seized control of hundreds of businesses, purportedly ‘for the people.’ And with inflation in Venezuela on track to hit 1,000,000 percent earlier this year, how are those businesses doing? Of the 511 businesses owned by the government, more than 70 percent of them are losing money, just adding to the economic devastation in Venezuela.

Now, to be fair, Warren is not proposing a total government seizure, such as the ones that took place in Venezuela. But it amounts to the same thing. Nothing can be done without government approval. The government would dictate every detail of corporate leadership, policy, personnel practices, and everything else that makes or breaks a company.

If such a plan were to ever come to fruition, Kevin Williamson writes in his piece for National Review what the result would be.

Nearly half of the total sales of the S&P 500 businesses come from overseas customers. Many big U.S. manufacturers such as Caterpillar get more than half of their sales from abroad. Exxon, the target of a political jihad being conducted by Senator Warren’s party, gets more than half of its revenue from overseas sales. You can serve the growing Asian markets as easily from Singapore as from California or Virginia. Businesses historically have chosen to locate in the United States for a number of reasons: It was long the world’s largest market, and businesses had faith in American law and the American dollar. It’s still a big market, and the dollar is still the world’s favorite currency. But if American law or American lawmakers are going to treat profit-seeking enterprises as an Enemy of the People — Zurich is pretty nice. Lots of places are. There are a lot of big American businesses with targets painted on their backs, and those that do not already have a Plan B are doing their shareholders a disservice.

One needs to look no further than California to see what happens when government messes with profits. In the last ten years, more than 1,687 California companies closed up shop and moved to a more business-friendly state. It isn’t a stretch to see that the same thing would happen nationally if Warren’s plan was ever given serious consideration.

Fortunately, her proposal is nothing more than a campaign ploy, designed to signal to the hardcore left that she is a candidate who can out-socialist Bernie Sanders. But if she were to actually become president and the Democrats had control of Congress, this wacko plan that would devastate the American economy might actually get some traction.

I’ve no doubt that millions who ‘felt the Bern’ in 2016 would love to see government begin seizures of businesses. The one thing they wouldn’t consider, though, is that businesses such as Facebook, Twitter, Google, Apple, Amazon, and others that have typically supported leftist policies would suddenly become conservative if Republicans were running the federal government and had control of all these businesses.

Williamson sums up Warren’s plan rather succinctly, writing that, “It is unconstitutional, unethical, immoral, irresponsible, and — not to put too fine a point on it — utterly bonkers.”

In other words, it is a perfect campaign plan for Warren. And all the utterly bonkers lefties who will support her.

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