President Trump has recently endorsed a policy that is arguably as socialist as anything proposed by New York mayoral candidate Zohran Mamdani or Sen. Bernie Sanders — partial government ownership of private corporations.
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Government Ownership Dealings
00:02:03
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| Hello, everybody, and thank you for tuning in to the weekly report, Making Corporatism Great Again. | |
| President Trump has recently endorsed a policy that is arguably as socialist as anything proposed by New York mayoral candidate Zorhan Mamdani or Senator Bernie Sanders, partial government ownership of private corporations. | |
| Earlier this year, as a condition of approving Nippon Steel's purchase of U.S. Steel, President Trump demanded Nippon give the U.S. government a golden share in U.S. steel. | |
| This golden share allows the U.S. government to overrule Nippon's management if the government determines Nippon is acting against U.S. national security, which means the government can overrule many decisions made by Nippon's management. | |
| Unfortunately, Nippon was not a one-and-done excursion into corporatism. | |
| President Trump recently struck a deal with computer chip manufacturer Intel to give the company $8.9 billion in government subsidies in exchange for 10% of Intel's stock. | |
| This deal makes the U.S. government Intel's largest stockholder. | |
| The Trump administration has promised that it will not use its position to undermine Intel's board. | |
| However, the administration is reserving the right to counter Intel's board if the administration determines the board is taking an action that would adversely impact the relationship of the company or its subsidiaries with the U.S. government. | |
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Government Ownership and Power
00:03:17
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| So, the Trump administration is yet again giving itself power to manage a nominally private company. | |
| Enabling the government to control a private company, even if the government does not actually exercise its power, means the company's management will base its decision on what will please those currently in power rather than on the desires of the consumers. | |
| Government investment in corporations will cause politicians to make decisions based on what will profit the companies that government has invested in, while those companies' competitors will seek to attract government investment in order to win special privileges for themselves. | |
| A corporation partially owned by government will be considered too big to fail, since its failure would cause the government to lose the money invested in the businesses. | |
| So the argument will be that a bailout will save the taxpayers' money. | |
| According to a 2024 analysis by the World Bank, an organization not known as a supporter of free market economics, companies of which government owns 10% or more are 6% less profitable and have workforces that are 32% less productive. | |
| Some members of the Trump administration have suggested that the federal government take a partial ownership interest in defense contractors like Lockheed, Martin, and Boeing. | |
| Commerce Secretary Howard Lutnick has pointed out that big defense contractor Lockheed Martin, for example, is basically an arm of the U.S. government, since almost all its revenue comes from the U.S. government. | |
| Secretary Luttnick has a point, but the closeness between the Pentagon and big corporations is an argument for restoring a non-interventionist foreign policy. | |
| Given the government ownership of interest in defense contractors, it would allow the War Party to argue that militarism is good for the taxpayers because it boosts the value of the government's investments. | |
| Government investment in private businesses will only worsen the twin plagues of corporatism and cronyism that afflicts our political and economic systems. | |
| Instead of further entangling government and business, those seeking to make America great again should work to end the welfare warfare regulatory state and the fiat monetary system that makes it possible. | |
| The only path to prosperity is through a true free market, limited government, and a foreign policy of peace and free trade. | |