LIVE MARKETS-Careful, is that the Federal bureaucracy, or Pandora's Box?

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CAREFUL, IS THAT THE FEDERAL BUREAUCRACY, OR PANDORA'S BOX?

Tariff talk dominated the headlines on Monday.

However, Mike O'Rourke, chief market strategist at JonesTrading, is noting that there were two other key policy stories out of the White House yesterday.

One was the merging of the U.S. Agency for International Development (USAID) into the State Department.

The other policy development of note he says is that President Donald Trump signed an executive order for the creation of a U.S. sovereign wealth fund.

"In short, the President is rooting out established bureaucracies within the government and is arguably replacing them with his own," writes O'Rourke in a note.

As O'Rourke sees it, even if the President's team is "the best that ever graced the West Wing, he is creating a powerful new Federal bureaucracy over which, someday, less capable individuals will wield power."

According to O'Rourke, the move should be even more alarming when the president floats the idea of the sovereign wealth fund acquiring TikTok.

In O'Rourke's view, it would be a would be a dangerous precedent for the federal government using taxpayer funds to acquire control over one of the most influential social media platforms in the world.

O'Rourke's concern is that even if one has the most altruistic of motives, such power will eventually fall into dangerous hands. He also says an idea was floated that companies that do business with the government should provide warrants or equity - which he sees as another dangerous proposition.

"The last thing our well established private sector wants is to be competing with or crowded out by the Federal government. The goal should be smaller government that allows the private sector to work, not replacing bureaucratic establishment with an even more powerful one," writes O'Rourke.

(Terence Gabriel)

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