This so-called “free market” orthodoxy isn’t what it was five or twenty years ago. The rules and accepted practices have changed, and pretending otherwise is delusional.
The government now plays a central role in corporate profitability. As Washington’s taxpayer-backed spending reaches absurd levels, income inequality becomes a growing systemic risk — and what’s fueling that systemic risk are the too-big-to-fail banks and mega-cap companies intertwined with it.
This isn't just AI; look at SNAP spending at Walmart and how that flows to Tyson or Cargill.
The more taxpayer support a company receives or the more strategically Washington treats a company, the greater its responsibility to society. Right now, CEOs are getting the best of both worlds at the taxpayer’s expense.
It is effectively a new Biden/Trump (and whoever comes next) Peronism, aka welfare-for-the-rich. We found out during the Dot Com and then bank bailouts of 2008, that these leaders will not behave responsibly when the taxpayer is on the hook.
Boards will 100% become compromised (no different than a Lukoil or Rosneft) if this model is allowed to flourish.
I apologize if I came off as snarky, but this is the conversation government and financial leaders should be having, yet they are lining their pockets by refusing to do the right thing. We have seen this movie and we know how it ends.
If you tell me we have free markets today as we did in the 1980s, I will know you are lying. A 5% setback in the S&P and we need a rate cut, a single bank failure (SVB) and we need to bail out some of the wealthiest in America. Dennis Kozlowski went to jail for greed after 2001 and the board claimed ignorance. Now the more fantastical and stupid the business proposal (Bitcoin Treasury companies), the more CEOs are rewarded up front (sh*t SPAC companies sponsored by Cantor).
We can admit we need to do the right thing or people can sell me some pretend free market snake oil that we know is dishonest. Unfortunately, we can no longer do both.