"So what will the Trump administration do in the event that the stock market starts going down. Well, the first thing that will happen is everything that they criticized previous administrations for doing, both Fed and Treasury, you'll see them doing them because in a crisis, you do all sorts of things that you'd rather not do in terms of buying assets or lending to certain parts of the economy."
"Second, though, I worry about the government is directly inserting itself into the sector in advance. They're buying equity stakes in these companies, or getting things that are almost like the equivalent of an equity stake, where they get a fraction of all of Nvidia's export revenue. And that, in some sense, says to me they are more willing to do things for individual companies than you've seen in the past."
In a market downturn the administration is likely to adopt crisis measures previously criticized, including buying assets and lending to parts of the economy. The government appears willing to insert itself into the A.I. sector ahead of a crash by acquiring equity stakes or revenue-linked claims from specific firms. Such targeted interventions suggest greater readiness to support favored companies than in past events. Past bailouts, like the auto industry rescue, were justified by crisis conditions and partially repaid. The 2000 approach of letting firms like Global Crossing fail represents a contrasting, less interventionist path.
Read at www.nytimes.com
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