By Pam Martens and Russ Martens: September 9, 2024 ~

Last Thursday, Republican presidential candidate Donald Trump spoke before the Economic Club of New York. During the speech, Trump revealed that if he wins the election he will create a U.S. Sovereign Wealth Fund.

Sovereign Wealth Funds are what countries that are rich from oil exports create with their surplus budget balances in order to diversify their nation’s investments. (Countries such as Norway, Saudi Arabia, Abu Dhabi, Kuwait, and numerous other countries have Sovereign Wealth Funds.) Not only does the U.S. not have any budget surpluses to invest but it is projected to have a $1.9 trillion budget deficit this fiscal year as well as having an existing national debt of $35.4 trillion.

Trump explained his plan as follows in his speech at the Economic Club of New York:

“We’ll create America’s own sovereign wealth fund to invest in great national endeavors for the benefit of all of the American people. Why don’t we have a wealth fund? Other countries have wealth funds. We have nothing. We have nothing.

“We’re going to have a sovereign wealth fund, or we can name it something different. I’ll talk about it with Mr. Paulson, who’s in the audience, and a lot of other friends of mine. And we’ll name it something that’s appropriate. Perhaps sovereign wealth fund wouldn’t be appropriate, but it’s going to be the same thing. We’ll put tremendous amounts of money through all this money that will be taken in through tariffs and other intelligent things, and we’ll have the greatest sovereign wealth fund of them all. And we should have.

“And that will be used to do things that will be great for our country, including to invest and wisely invest and build it up bigger and stronger and better than any place on earth. We will build extraordinary national development projects, and everything from highways to airports and to transportation, infrastructure, all of the future. We’ll be able to invest in state-of-the-art manufacturing hubs, advanced defense capabilities, cutting-edge medical research, and help save billions of dollars in preventing disease in the first place…

“And it is many of the people in this room who will be helping to advise and recommend investments for this fund….”

Not to put too fine a point on it, but most people who believe in capitalism also believe that it’s the job of efficient markets to allocate capital to the most critical areas — not the job of government.

The “Mr. Paulson” that Trump referred to in his speech is the billionaire hedge fund titan, John Paulson. Bloomberg News reported that Paulson is advising Trump on the Sovereign Wealth Fund plan and his name is being floated as Trump’s Treasury Secretary should Trump win in the November election. Paulson has hosted multiple fundraising events for Trump in the current election cycle and in Trump’s failed run for reelection in 2020.

John Paulson became infamous for his role in the Goldman Sachs’ ripoff known as Abacus, where he was allowed by Goldman to pick subprime debt he thought would default in order for him to take short bets. The SEC charged that Paulson made $1 billion on the deal while defrauded investors to whom Goldman Sachs sold the deal as a good investment lost an equal amount.

The Securities and Exchange Commission failed to bring charges against Paulson. On July 15, 2010, the SEC announced that Goldman Sachs would pay $550 million to settle its Abacus charges. Fabrice Tourre, a young Goldman investment banker involved in the deal, was the only person to face a civil trial. No one was criminally prosecuted in the matter.

More recently, Paulson has been making salacious headlines for being engaged to another woman who is pregnant with his child while he is still legally married. He and his wife, Jenny Paulson, have been engaged in a high profile, nasty divorce for three years, where she has charged that he hid billions of dollars from her in trusts.

Trump’s previous Treasury Secretary, Steve Mnuchin, had similar warts on his character and set up a giant slush fund. (See 75% of the $454 Billion CARES Act Money Never Went to the Fed; It Was Invested by a Mnuchin Slush Fund Called the ESF.)

In addition, Mnuchin battled the media for months in an effort to keep secret the names of the businesses that received funds under the Paycheck Protection Program (PPP), a Trump administration program ostensibly to help small businesses survive during the economic downturn caused by the COVID-19 pandemic. ProPublica reported the following when the Trump administration finally relented and released some of the details:

“Businesses tied to President Donald Trump’s family and associates stand to receive as much as $21 million in government loans designed to shore up payroll expenses for companies struggling amid the coronavirus pandemic, according to federal data released Monday…

“Several companies connected to the president’s son-in-law and White House adviser, Jared Kushner, could get upward of $6 million…

“Monday’s list included a Manhattan law firm whose marquee attorney has fiercely defended Trump for almost two decades. Kasowitz Benson Torres LLP — whose managing partner, Marc Kasowitz, was at one point the president’s top lawyer in the special counsel’s Russia investigation — was set to receive between $5 million and $10 million….”

Wall Street On Parade also reported extensively on the dodgy details underlying the PPP program and its sister operation, the Paycheck Protection Program Liquidity Facility. See, for example, Jay Sekulow, Trump’s Impeachment Lawyer, Collected $1-2 Million in a PPP Loan for his Scandal-Ridden Charity; and The Fed’s Paycheck Protection Program Gave a Tiny NJ Bank $5.3 Billion – 9 Percent of all the Money It’s Spent Thus Far.

During his speech last Thursday, Trump kept to his trademark brand of grossly distorting facts in favor of his imaginary alternative reality. Paulson was one of only four people allowed to ask questions of Trump during the Q&A that followed his speech at the Economic Club last Thursday. Paulson asked him about the $2 trillion deficit under President Biden. Trump answered as follows:

“Well, we just hit record highs at numbers that nobody ever thought possible. You’re right, over $2 trillion. Nobody thought that was a number that was – I mean, you could go back four years. Nobody thought a number like that would be possible. It’s crazy. It’s like – it’s just horrible, actually.”

According to the U.S. Treasury’s data, the budget deficit in Trump’s fourth year in office, 2020, was $3.13 trillion.

As for allowing Donald Trump to get anywhere near investing large sums of money for the future of the United States of America, this is what Trump said during his speech last Thursday regarding the impact of climate change: (You can hear the remark at 1:08 on the C-SPAN video here.)

“When people talk about global warming, I say the ocean is going to go down one hundredth of an inch within the next 400 years. That’s not our problem. Our problem is nuclear warming.”

Trump has used the phrase “nuclear warming” in previous interviews. Scientists have no clue as to what he is talking about. Credible climate change scientists also do not believe the ocean “is going to go down.” They have concluded that “Global warming is causing global mean sea level to rise in two ways. First, glaciers and ice sheets worldwide are melting and adding water to the ocean. Second, the volume of the ocean is expanding as the water warms….”

The Economic Club of New York did its own reputation no favors by hosting Trump at last Thursday’s event.