There has been a flurry of presidential activity since Donald Trump took office once again. Using a sports analogy, all these presidential decrees are meant to Flood the Zone, throwing a ton of stuff on the wall to see what sticks. A less charitable interpretation would be that Donald Trump and his administration might be trying to distract us with some of his more outlandish proposals in order to slip something seemingly less obnoxious in. If that is the case, I propose that the fox in the hen house of presidential decrees is the Sovereign Wealth Fund.
A Sovereign Wealth Fund would be a slush fund of ready cash (our tax dollars) to be used at the whim of the president, in this case, Donald Trump. Mr. Trump has talked about buying an interest in Tik Tok, but, if established, he could use it for anything he wants.
Aside from diverting a large sum of money out of the economy for an unspecified period of time, the merits of the fund would depend on its ultimate use.
Kuwait has had massive oil revenue profits in a fund since 1953, the Kuwait Investment Authority (KIA).
The most egregious misuse of a Sovereign Wealth Fund occurred in Malaysia. Four and a half billion was diverted through shell companies and off-shore bank accounts. The money was used to purchase luxury items, including properties, artworks, a superyacht named Equanimity, and to finance Hollywood films, such as “The Wolf of Wall Street.” The repercussions are ongoing.
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