Tuesday, April 12, 2011

Jonathan Hoenig: Donald Trump is No Capitalist

By Gary P Jackson

Jonathan Hoenig, Managing Member of Capitalistpig Asset Management LLC, has some harsh words for "The Donald" in an op-ed for the Wall Street Journal's Smart Money blog: [emphasis mine]

Successful businessmen are oftentimes the worst defenders of capitalism. Recent financial interventions began not with President Obama , for example, but with the $30 billion bailout of Bear Stearns under the supposedly fiscally conservative Bush Administration and then-Treasury Secretary Henry Paulson, former head of Goldman Sachs ( GS: 160.42, -1.05, -0.65% ) . The TARP slush fund , onerous Sarbanes-Oxley regulation and prescription drug entitlement were all their handiwork too.

Both Warren Buffett of Berkshire Hathaway ( BRK.B: 81.68, -0.58, -0.70% ) and speculator/philanthropist George Soros are successful businessmen with extremely anti-capitalist ideals. Buffett proudly advocates for a highly progressive income tax where earnings are looted from one segment of the population and transferred to another . Soros has long supported centralized planning and heavy government intervention in the free market.

Yet because of their great individual wealth, their ideas are championed as business-savvy proposals which would lead to a stronger, more prosperous economy.

They would not – and neither would those of Donald Trump.

For example, Trump professes to support free trade, yet proposes a 25% tax on imported goods from China to level what he sees as trade imbalances in the global economy. It's a contemptuous proposal which would immediately punish Americans by raising the price on virtually everything we buy.

He has also called for regulators to stop European stock operator Deutsche Börse's ( DBOEY ) planned $9.5 billion buyout of the NYSE Euronext ( NYX: 37.85, +0.26, +0.69% ) , telling Fox Business Network, "I don't want foreign countries owning the New York Stock Exchange." If he was the president, he added, he "wouldn't even have allowed the discussions to take place." In a capitalist country, shareholders make that kind of decision, not regulators . Trump sees a clear role for government picking winners and losers in the economy, just the same as the previous presidents he claims to critique.

On top of that, he has pushed for a one-time 14.25% tax on the rich as a means of supplementing funding for Social Security and Medicaid, along with universal health care .

Philosophically, those positions are indistinguishable from the anti-capitalist political establishment now in power.

Trump, of course, is free to run and support whatever platform he wishes, as are his many fans across the country. But despite his personal fortune, they should know his proposals and political philosophy are far from capitalist. Punitive and redistributionist taxes, centralized planning, barriers to trade and an entitlement "social safety net" are all ideas straight out of Karl Marx , not John Galt .

"You need a person like me to run this country for a while because we have to get this country back so that we're respected again." Trump told CNN recently.

A businessman whose proposals seek to destroy capitalism? There's nothing to respect about that.

Read more here.

The old saying "buyer beware" has never been more appropriate. Donald Trump is not what he seems.

Voters were hoodwinked by Obama and his rhetoric. Trumps record and ideas are more in line with Barack Obama [and Karl Marx] than any Conservative or Tea party member.

Trump is simply playing his supporters for fools, just like Obama did to his in 2008.

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