"The intellectual groundwork for a government financial splurge was laid by a once-fringe economic school of thought known as modern monetary theory. Covid put it into practice -- quite rightly, given the disastrous state of the economy. Central banks have turned from inflation hawks into advocates of more spending, and are willing to finance it. More spending brings with it the need to prevent abuse of the money, easing the politics of new regulations.
Executives who have been frantically greenwashing their companies to appeal to environmental and socially minded investors will find it harder to lobby against government restrictions designed to protect workers or combat climate change. It will be doubly hard if they were beneficiaries of government lockdown handouts.
Already the European Union has broken the German taboo on centralized borrowing to launch a massive spending program, as well as moving to define sustainable investing. Europe led the way on antitrust action against Big Tech, now under way in the U.S., too, although trust busting is something a free-marketeer (if not a self-interested shareholder in a monopoly) should support.
U.S. society isn't overwhelmingly in favor of Big Government. Joe Biden didn't win the presidency with the sort of landslide that allowed Franklin Delano Roosevelt to shake up capitalism. But polls show that the population is broadly in favor of more spending, and the modern Republican Party thought nothing of running record peacetime deficits, albeit to finance tax cuts.
The next 10 years could easily see the words of the past 10 years turned into action, both from governments becoming more interventionist and companies doing more to try to head off political involvement in their businesses. Shareholders should brace for change." [1]
1. Outlook 2021 (A Special Report) --- Will Covid-19 Shake Up Capitalism? --- The pandemic sped up demands for changes in the economic system. Shareholders might want to brace for change.
Mackintosh, James. Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]19 Jan 2021: R.10.
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